Solar In Australia Will Be Competitive With Gas In 2015 or 2016

Australia’s exports of gas will push up domestic prices, says New Energy Finances (BNEF). Wind energy is already cheaper than new gas for electricity generation – and solar isn’t far behind.
   
In February, Bloomberg’s Sydney analysis team determined electricity can be supplied from a new wind farm at a cost of  $80/MWh; far cheaper than new gas and coal.
   
At that point, Bloomberg figured solar would also be competitive or cheaper than gas by around 2020. In a statement released yesterday, the firm has predicted solar power in Australia will be competitive with gas in 2015 or 2016.
    
It seems Australia’s gas export projects are set to push up domestic prices later this decade to double the current price – to around $10 a gigajoule.
     
“With high, LNG-driven domestic gas prices, renewable energy is the cheapest source of new electricity generation,” says Bloomberg analyst Kobad Bhavnagri. “It is quite conceivable that we could leapfrog straight from coal to renewables to reduce emissions as carbon prices rise.”
    
Global investment bank Citi says large scale solar will be competitive with baseload gas by 2017 in Australia and may already be cheaper than peaking gas fired plants.
     
AGL Energy chief Michael Fraser says Australia’s gas woes also have their roots in policy changes from state and federal governments with regard to getting the gas out of the ground. For example, according to an article in The Australian, Mr Fraser believes limiting CSG production to areas away from residential areas and certain industries such as wineries and horse studs was “short-sighted”.
     
Gas has worn a black eye in recent years due to environmental concerns. It appears gas is not quite the green energy source some of its supporters make it out to be and the controversial practice of fracking has come under increasing scrutiny.