Thursday, 30 May 2013

Oh Look at this: Unsubsidized renewables cheaper than fossil fuel in Australia

So one of the many whines we hear from naysayers and doomers is that renewables can never be cost competitive with fossil fuels and thus what's the point of doing them.

I've always begged to differ as it's obvious that with falling renewables prices it would be inevitable that at some point a line would be crossed where it just made economic sense to replace fossil fuel power with renewables. That line has been crossed in Australia (and likely in other areas as well).

Bloomerg New Energy Finance has this to say:
A study conducted by BNEF’s Sydney analysis team, who painstakingly priced the various different sources of electricity by Australian Dollar per Megawatt hour for new builds shows that electricity produced from a new wind farm costs AUD 80/MWh whereas a new coal plant is AUD 90/MWh and a new baseload gas plant is AUD 95 /MWh.

It's important to note that these are unsubsidized costs.

If carbon pricing were included the cost of a new coal plant goes up to AUD 143/MWh and that of a new gas plant to AUD 116/MWh.

Most of the naysayers are operating on a mix of outdated information and hearsay. Michael Liebreich the CEO of Bloomberg New Energy Finance says “The perception that fossil fuels are cheap and renewables are expensive is now out of date”.

“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."

Doomers: sit up and take notice.