Debate over the cost of renewable energy generation versus coal-fired power stations is shaping up as a prime issue ahead of the federal election in May.
The Coalition is under siege as pro-coal National MPs fight for regional coal projects over Liberals keen to hang on to key city seats where coal is out of favour. Meanwhile, Labor has set a target of 50 per cent renewables by 2030.
Renewables versus coal: Which is cheapest?
Liberal MP Craig Kelly and former Nationals leader Barnaby Joyce seized on key statistics to back up their claim that coal-fired generation is cheaper than renewables.
They typically use figures based on the cost of existing coal-fired plants. According to the Australian National University (ANU), existing coal power stations can generate energy at less than $40 MWh.
Wind turbine power costs between $60 and $70 MWh. Yet ANU forecasts also show that the cost of renewables will fall to around $50 MWh in the 2020s.
While that is still higher than the figure quoted for coal, there’s an important point to make about coal. Existing coal-fired plants are reaching the end of their working life, and have already paid for themselves.
The cost of refurbishing ageing plants or building new ones will dramatically hike the future cost of coal-fired energy.
New-build renewables beat coal in cost stakes
The 2018 inaugural GenCost report showed renewable energy will provide the cheapest form of Australian power over the coming decades.
National science agency CSIRO and the Australian Energy Market Operator provided the data. It shows wind and solar power technologies are the lowest-cost way to generate electricity, including new coal-fired stations.
So, renewables emerge as clear winner in the cost stakes going forward. However, additional technology may be needed if renewables exceed 50 per cent of market share.
These include energy storage, demand management and peaking gas plants. This is a break with the traditional model of electricity generation.
Libs/Nats Coalition split over renewables versus coal power
A split has emerged in the Coalition over the relative importance of coal powered plants and clean energy like solar power.
The Nationals want new coal-fired power stations to please regional voters. Yet the Liberals are now stepping back from coal as they realise many city voters want clean energy.