100% renewables for Australia – not so costly after all
Giles Parkinson on 29 April 2013
An exploratory study into 100% renewable energy scenarios for Australia has concluded that its impact on consumer electricity prices over the next few decades may be no more than the increases in the last few years to support much criticised network upgrades and the introduction of the carbon price.
The report by the Australian Energy Market Operator (AEMO) – you can access the executive summary here and the draft report here - canvasses the potential costs and practicality of transforming Australia’s coal-dependent electricity system to 100 per cent renewables, by either 2030 or 2050. It creates two scenarios – depending on the pace of falls in the cost of renewable and storage technologies – but both are considered conservative.
It concludes that the cost could range between $219 and $338 billion and would require wholesale electricity prices of $111-$133/MWh (more than double the current price). Unfortunately, and somewhat controversially, AEMO was not asked to compare these forecasts with “business as usual”, but it does provide one interesting set of data that does put it into some perspective.
The first is the impact on retail prices. See the table below (excuse the draft stamp):
It shows that the impact on consumer electricity costs from a 100% renewables scenario could be as little as 6.6c/kWh, assuming a reasonably optimistic view of technology costs. That compares to the forecast national average increases in retail costs made by the Australian Energy Market Commission from 2011/12 to 2014/15 of 5.4c/kWh.Taking in the two earlier years of increases, the jump in retail prices has been higher.
This should not come as a surprise. The AEMO study is almost unique in the world in not taking into account BAU. The International Energy Agency, for instance, last year estimated that the world needs to spend an
It is a terrible mistake to go 100% renuables until it can prove itself in the real world. Studies are usually full of optimistic outlooks and assumptions. Also, doubling someones electricity rates can be very hard on people. We should put more efforts into better scrubbers etc instead of burning our food for energy and driving up the cost of food and energy at the same time for everyone.