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Feb 8, 2013

‘Game changer’: renewables now cheaper than coal, gas

New analysis from Bloomberg New Energy Finance concludes that renewables are already cheaper than new-build coal and gas in Australia. And gas may not even be needed.

New analysis from research firm Bloomberg New Energy Finance has concluded that electricity from unsubsidised renewable energy is already cheaper than electricity from new-build coal and gas-fired power stations in Australia. The modeling from the BNEF team in Sydney found that new wind farms could supply electricity at a cost of $80/MWh -- compared with $143/MWh for new build coal and $116/MWh for new-build gas-fired generation. These figures include the cost of carbon emissions, but BNEF said even without a carbon price wind energy remained 14% cheaper than new coal and 18% cheaper than new gas. "The perception that fossil fuels are cheap and renewables are expensive is now out of date," said Michael Liebreich, chief executive of Bloomberg New Energy Finance. "The fact that wind power is now cheaper than coal and gas in a country with some of the world's best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head," he said.

2012-30 levelised cost of energy in Australia (real 2012 AUD/MWh)

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10 comments

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10 thoughts on “‘Game changer’: renewables now cheaper than coal, gas

  1. MJPC

    The beginning of the end for carbon based economies
    http://www.smh.com.au/business/china-flags-plan-to-cut-coal-use-20130206-2dyq5.html
    Of course this country will contiue to hold onto outdated technology and business model, and suffer as a result.

  2. kakadu

    This should have happened 10 years ago

  3. Recalcitrant.Rick

    And the stupidity of those missing the boat of the new Capitalism, still insisting renewables are a left-wing plot. Early adapters are the real entrepeneurs.

  4. Andybob

    Until intermittency is actually solved, gas turbines will remain the “least worse” source of reliable base load power. Failing to construct reliable base load and peaking capacity risks blackouts. Blackouts risk electoral oblivion for governments.

  5. John Bennetts

    Two problems.
    1. Intermittency results in a need for tremendous overbuilds, which is not taken into account by LCOE calcs.
    2. Wind power, on average, must be conveyed a greater distance than more reliable sources, such as coal or gas fired power. This involves energy losses and requires greatly augmented HV transmission systems. The Germans are still wrestling with the cost of their as-yet non-existent transmission lines to connect renewables to their loads.

    I write this in sadness, not anger. If only renewables could do all that they claim and at least cost, then the great and continuing argument about climate change would not be necessary. But they cannot, at least not yet or any time soon.

  6. Electric Lardyland

    Of course, the cost analysis would be even more in favour of renewables, if you were able to calculate the cost of climate change and add that into the equation.

  7. Mark Duffett

    Must-read counterpoint to this piece: decarbonisesa.com/2013/02/08/ask-the-right-question/

  8. John Bennetts

    @Electriclardyland:

    Not only renewables.

    If your goal is to avoid the costs of climate change, then you must also consider nuclear power as a component of your rational response.

    BTW, storage solutions may be closer than is commonly believed. Batteries and pumped hydro may be limited and expensive, but the US Navy recently estimated the cost of jet fuel from electricity and seawater at about $1.50 per US gallon using available technologies.

  9. Roger Clifton

    Then let us pray for a technical breakthrough in storage. We desperately need similarly cost-effective storage to balance this apparently cheap wind and solar. Without power during adverse weather, power for our vehicles, power for industry, these environmentally-expensive doodads will be about as much protection from an angry climate as a rabbit’s foot on every front door.

  10. toby robertson

    You can not be serious if you believe this? wind does not create base load power, no power stations will be shut down. have you seen the facts that wind towers work at on average 25-30 % of their rated capacity? this makes a mockery of these numbers. We have now some of the most expensive electricity in the world. For what? co2 emmissions continue to climb exponentially and yet temp has not incresed for 16 or so years?

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