Antinuclear

As we reported earlier this month, after the release of the Australian Energy Market Operator’s 100% renewables scenario, the estimated wholesale cost of electricity from a system based largely around wind, solar, geothermal and biomass would cost around $110/MWh and $130/MWh between 2030 and 2050 – depending on the speed of that transition.

A “community summary” posted on the Department of Climate Change website, highlights the fact that the various scenarios painted by Treasury, the CSIRO, the UNSW, and now the AEMO modeling suggests that wholesale prices – whatever the scenario – will fall in a generally narrow range of around $100/MWh to $130/MWh in 2030, and $110/MWh to $150/MWh in 2050.

Here is the relevant piece from the document:

A number of other studies have looked at generation and wholesale electricity prices in 2030 and 2050: the Treasury’s Strong Growth Low Pollution (SGLP) modelling from September 2011, the CSIRO’s eFuture modelling tool, and the University of New South Wales’ least cost 100 per cent renewable electricity scenarios in the Australian NEM study.

Importantly, each model has a specific purpose and each has significantly different assumptions, methodologies and cost inputs. Furthermore, each model emphasises different aspects of the electricity system and simplifies others according to purpose. For example, the study’s cost numbers are based on a total revenue requirement (average costs) while others (such as CSRIO) are marginal costs. Average costs are likely to be lower than marginal costs.

As a result, differences in the models, the exclusion of some costs and the framework which does not build the system incrementally means that is it not possible to accurately predict the quantum of additional costs that would result from any new policies to achieve 100 per cent renewable energy.

Nonetheless, despite the differences between the modelling exercises, indicative wholesale electricity prices generally fall within a reasonably narrow range of around 100 – 130 dollars per MWh in 2030 and around 110 – 150 dollars per MWh in 2050.

So it seems that Canberra bureaucrats, if not the politicians, are conceding that there is little difference in costs between the relatively modest climate and clean energy goals proposed by the current government, and the more ambitious targets proposed by The Greens, and environmental groups.

This should not be a surprise to anyone who has properly considered the costs of new generation – as ACT minister Simon Corbell has – and their likely progress in coming years. Wind, and then solar, clearly offer the cheapest options.

New coal and gas plants will be priced out of the market, an important consideration when taking into account that most current generation needs to be replaced in coming decades. (Some pro-nuclear web-sites and commentators like to say that nuclear energy will be within the same cost bracket, but that is only if the cost of capital is ignored.)…. http://reneweconomy.com.au/2013/renewables-future-no-more-costly-than-fossil-fuels-55338