Cheaper Power???

Who would have thought? Nations with more renewables have more expensive electricity

The Mystery: The most resource rich nation on Earth has the highest electricity prices?!

Ask anyone and get confused: It’s poles and wires, gaming of the system by capitalist pigs, excessive taxes, privatization, and record gas prices. The CleanEnergy Council  tells us that Australia has one of the longest electricity networks in the world — we need lots of poles! And so we do. But once upon a time Australia had the cheapest electricity in the world and we still had lots of poles. Not only were miles of poles and wires, there were also capitalist pigs, excessive taxes, and privatized generators. There were wild gas price spikes too, (during which we probably just burned more coal).
Evidently, something else has changed. Something seismic that wiped out all the bids below $50/MWh. 
Perhaps it has something to do with the 2,106 turbines in 79 wind farms that on random windy days might make 4,325MW that didn’t exist in Australia in 1999 when electricity was cheap and our total national wind power was 2.3 megawatts?
Another clue might be the 1.8 million new solar PV installations, which theoretically generate 7 gigawatts of electricity at noon on cloudless days if all the panels have been cleaned. Back in 2007, we had 14MW.
But of course, cause and effect are devilishly difficult. The one thing we know for sure is that even though sunlight and moving air is free, there is no country on Earth with lots of solar and wind power and cheap electricity.
Any day now, renewables are going to make electricity cheap, but when that happens, it’ll be a world first.
See the graph: the more renewables we have the more we pay…

….
Source: Paul Homewood at NotalotofpeopleKnowthat inspired graphs by Johnathon Drake, and Willis Eschenbach, and Dave Rutledge, similar to this one. This particular graph came via Judith Sloan in The Australian, though I can’t seem to find the exact link.

 We’re high achievers price-wise

Australia is far above the trend-line.  Our electricity is even more expensive than it should be for the amount of renewables we have. At a guess this might be because other nations have more “hydro” in their renewable mix and less wind and solar.  Or they have access to nuclear power (like all the EU countries). It may be made worse by the way our energy markets are managed, the profusion of bureaucracies, the subsidies and rebates, the renewable energy target, or the overlapping state and federal green aims. It also may be that in our smaller market we have a few big players gaming a volatile, complicated market. Stability may cost more here, due to the fragility of our network.

Don’t blame wind and solar… oh, wait

To isolate the effect, this graph from Euan Mearns takes out the “hydropower” and biomass aspect and just looks at wind and solar. Spot the trend:
(Note that “Aust” means Austria, not Australia)

Figure 1 The Y-axis shows residential electricity prices for the second half of 2014 from Eurostat. The X-axis installed wind + solar capacity for 2014 as reported in the 2015 BP statistical review normalised to W per capita using population data for 2014 as reported by the UN.
As Euarn Mearns says, there’s more than one variable at work here, but the inescapable conclusion is the countries with the highest levels of renewables pay the highest prices.    h/t Don B.

Is that another 10 cent price rise coming?

According to wikipedia our wind power capacity is set rise 250% or something crazy (I’m skeptical):
From wiki wind power in Australia–  As of May 2017 a further 12328 MW of capacity was proposed or committed.^{[2] “AEMO Planning and Forecasting – General Information Page”. Retrieved 7 June 2017.}
For a population of 24 million that means we would add another 500 watts/capita. Eyeballing the trendline in the graph,  prices would rise by another 10c/KWhr. (Don’t try to unpack the x and y units exactly and calculate it. That’s another story.)
Say it again: there is no country on Earth with lots of solar and wind power and cheap electricity.

REFERENCES

Moran, Alan (2017) The Finkel Report’s Recommendations on the Future Security of the National Electricity Market:
Impacts on the Australian Economy and Australian Consumers, Regulation Economics.

Claim: Renewables ARE the Cheapest Form of Power

Eric Worrall / October 11, 2017


Guest essay by Eric Worrall
Simple economics is now driving the unstoppable rise of renewables, according to advocates – or would be, except for a mystery political obstacle.

Quote :

The Myth About Coal Being Cheaper And More Reliable Than Renewables
Renewable energy is now the cheapest form of new power.
04/10/2017 11:51 PM AEDT
Anthony Sharwood
Nope, nope and nope again. There’s yet more proof this Friday that coal is neither cheaper nor more reliable than renewables as an energy source, and that coal is only going to get more expensive in the future.
We were given excellent evidence of this in April, when the CSIRO and Energy Networks Australia report told us that renewables could save households $414 a year by 2050.
Further proof arrived in June when the Independent Review into the Future Security of the National Electricity Market (aka the Finkel Report) told us that ramping up renewables would lead to lower power prices.
And now the Climate Council has weighed in, showing that we really can have our energy cake and eat it too — if by energy cake you mean cleaner, cheaper power, and by eating it, you mean reliability of supply.
The Council’s new report is entitled ‘Powering a 21st Century Economy: Secure, Clean, Affordable Electricity’ and you can find it here.
…
So if technology’s not holding us back, and cost is not the issue, what on earth is stopping us from transitioning as quickly as possible to cleaner, more affordable renewables?
One word: Politics.
“Politics is the only factor standing in the way of Australia’s transition to a modern electricity network, powered by renewable energy and storage technology,” Climate Council CEO Amanda McKenzie said.
…

Read more: http://www.huffingtonpost.com.au/2017/10/04/the-myth-about-coal-being-cheaper-and-more-reliable_a_23231954/
What is the “politics” which seems to be such an impediment to a cheaper renewable future? One clue might be the conclusion of the report referenced by The Huffington Post. The report prepared by the Climate Council, the body led by our old friend Chief Councillor Tim Flannery;

Quote :

… Importantly, while we may use some existing gas plants during this transition, we do not need new gas or coal plants built. Persisting with existing coal plants beyond their technical design lives will lead to unreliable power and higher electricity prices and continued high levels of pollution from Australia’s electricity sector.
This transition requires shifting away from obsolete “baseload” concepts and inflexible old coal power generators to a modern, flexible, 21st Century grid powered by a diverse mix of renewable energy and storage technologies. …

Read more: Climate Council Report Available Here
Is the political obstacle an outmoded adherence to the concept of baseload power? Maybe. But I’m not convinced we’ve fully explored this “politics” obstacle, so I decided to delve deeper;

Quote :

Politics preventing Australia’s switch to 21st Century energy
BY CLIMATE COUNCIL
04.10.2017
Politics is the only factor standing in the way of Australia’s transition to a modern electricity network, powered by renewable energy and storage technology, according to a new report released by the Climate Council today.
…
Climate Councillor and energy sector expert Andrew Stock also pointed to states and territories across the nation pushing ahead with the transition to renewables and storage technology, in a bid to achieve secure and reliable power, while also tackling climate change.
“South Australia is a global leader and is investing in solar PV, solar thermal, pumped hydro storage, and the world’s largest lithium ion battery. Others like the ACT, followed by Victoria and Queensland, are now rolling out large-scale renewables such as wind and solar,” he said.
“There’s no disputing it – fossil fuel technology is obsolete, expensive and unreliable. In fact, Within 10 years, over two thirds of our coal plants will be over 50 years old. It’s time to look to the future with an energy system fit for the 21st Century.”
…

Read more: https://www.climatecouncil.org.au/politics-preventing-australia-s-switch-to-21st-century-energy
Do Greens think the political obstacle is a failure by governments to invest in renewables? But if renewables are cheaper, why is government investment required? Why aren’t private investors rushing to fund cheap renewables even without government help, to make a huge profit driving their obsolete fossil fuel rivals out of business?
If cheaper renewables are skyrocketing even without government help, why is politics still seen as such an obstacle?
I don’t want to jump to conclusions. Maybe I have misunderstood something. I’m genuinely interested in understanding what political obstacles greens think are preventing the realisation of a low cost energy future powered by renewables.
Because we all want cheaper power, right?