Great news for solar power aficionados! It looks like fossil fuel dinosaurs will only play a teeny-tiny role in Australia’s future energy system. 7GW of new wind and solar projects are set to hit the grid within 2 years. Plus, according to analyst firm, Reputex, 60GW of renewable energy is slated to 2040.

For this to happen, 13GW black and 1.4GW of brown clean coal power stations *cough* need to exit the market by 2025.

Is that cool with you, Boomer?

Natural Gas share will also fall as low as 1% share.

Reputex echoes the Energy Security Board chair Kerry Schott. Both predict Australia will have a 90 per cent renewable energy mix by 2040. This is despite our federal government’s addiction to fossil fuel and sluggish investment in renewable infrastructure.

To this end, some state governments are picking up the slack. For example, NSW already has plans to establish renewable energy zones and new network infrastructure. Reputex goes on to say that growth in low-cost wind and solar will drag electricity prices down to around $40 to $50 per megawatt-hour.

“Although utility-scale solar and wind projects are being built at an impressive rate in the NEM, the final step of delivering electricity into the grid is still experiencing major delays due to inadequate grid infrastructure”, Harper (Director of Research, Reputex) said.

[The NSW government] plans to accelerate new transmission infrastructure is now likely to release the long-term handbrake on renewable energy investment, resulting in a significant change to the speed of the transition from coal to renewables under our forecast scenarios. As this occurs, a tsunami of large-scale renewable energy is likely to enter the market over the next decade, increasing competition for dispatch, reducing the influence of gas prices, and maintaining lower wholesale prices over the forecast period.

Bret Harper
Director of Research at RepuTex Energy

Falling cost of clean energy technologies = less gas

The rapidly falling cost of clean energy and battery storage projects is squeezing gas-fuelled generators out of the electricity market. While the Morrison government has sought to champion gas as a transition fuel, Reputex says gas is likely to have little by way of competitive advantage, particularly compared to batteries.

Although the timing is uncertain, gas generators have little competitive advantage in the spot market, where batteries are emerging as the most economical way to trade, helping to shave peak pricing and reduce ancillary costs such as frequency control . . .

This suggests some other form of energy storage will eventually beat out gas for the role of balancing variable renewable energy and bridging our way to a clean energy future.

Bret Harper, Reputex

Coal gets dirty

Australia’s coal generators have warned that the exit of coal generators is about to get messy unless actively managed and planned for, as generators battle to remain in the market and attempt to avoid being the first one to close.

Origin Energy has spoken openly about the potential need for coal generators to operate flexibly. CEO Frank Calabria told shareholders that the company is preparing to operate the 2,880MW Eraring power station more flexibly. The increasing supply of solar electricity during the day is putting pressure on the profitability of inflexible plants. Failure to exit the grid gracefully means that coal force electricity prices up, particularly if new network infrastructure becomes a roadblock to wind, solar and battery storage.

With no NEM-wide coordination plan to guide large coal-fired generation retirements and inform new investment in energy storage and firm capacity, investment in new capacity is again expected to slow.

Bret Harper

“This scenario cold result in much higher wholesale electricity prices in the 2020s, with new investment reactive to higher prices, rather than proactively committing to investment ahead coal-fired facility.”

This is a shotened version of an article by Michael Mazengarb for Renew Economy

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