Australia Is Cheapest In Asia For New Wind And Solar Projects

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Originally published on RenewEconomy.

New research put out by Bloomberg New Energy Finance shows that new wind and solar projects in Australia are cheaper than in any other Asia country, yet new coal plants are 50 per cent more expensive and would be the most expensive in Asia.

As major companies such as AGL Energy and ANZ Banking Group hedge their bets about new coal fired plants, saying they would not finance new coal unless it had (even more expensive) carbon capture and storage, and the Coalition government continues to entertain thoughts of a government-financed coal fired plant in northern Australia, the new research from BNEF shows that renewables are a much cheaper option.

This is particularly important, given that many of Australia’s coal fired generators are already operating beyond their nominated life, and new capacity will be required over the next decade.

First for solar, BNEF says that Australia can build large scale solar plants at an average levellised cost of electricity of $US88/MWh (about $A123/MWh), cheaper even than in China.

BNEF puts this down to a combination of high capacity factors and low finance costs, with the proviso that they can secure long term off-take contracts, something that has so far eluded Australian developers due to the uncertainty over policies and the “capital strike” by major utilities.


On wind, Australia also has the lowest costs in Asia, with an LCOE of $US71/MWh, compared to China’s $US77/MWh respectively. It says Australia’s strong wind resource makes the technology cheaper than China despite lower capital costs there. Some recent contracts have pointed to even lower costs in Australia, below $A80/MWh.


On coal, BNEF says new coal fired generators would cost $US123/MWh – the highest LCOE for new coal capacity in Asia.

It says this is due to the fact that it would have most expensive project costs and financing costs in the region. “Investors are reluctant to finance new coal projects due to concerns over reputation damage, carbon and long-term market risk,” it says.

Still, the Coalition government is still considering putting money from the Northern Australia Infrastructure Fund into new coal fired generation in northern Queensland, and many existing coal generators are running beyond their lifetimes.

Many are hanging on, hoping for a payment to help exit and rehabilitation costs. Environment minister Greg Hunt, however, has ruled that out, saying that the renewable energy target will act as a market mechanism to force the closure of coal fired power stations.

In the UK, however, there are media reports that the conservative government will go even further, mandating the closure of the last coal fired generators, currently accounting for 28 per cent of energy demand, by 2023. This is despite the fact that it has not yet been able to restart its nuclear industry, despite promising outrageously high tariffs to the proposed $50 billion Hinkley C nuclear plant that even conservative media is describing as possibly the greatest “white elephant” in UK history.

Reprinted with permission.

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Giles Parkinson

is the founding editor of, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.

Giles Parkinson has 596 posts and counting. See all posts by Giles Parkinson

7 thoughts on “Australia Is Cheapest In Asia For New Wind And Solar Projects

    • Australia is part of Asia when it suits it. Basically we have realised that world leaders are for the most part really bad at geography and often will believe anything you tell them. For example we managed to get into the East Asian Summit. Of course, that’s not so impressive given that the United States did as well, probably on the basis that the former Governor of Alaska could see Asia from her house.

      • It’s not easy being so isolated with mostly water and tiny islands around you so I understand the need to go trans-continental and “hang” with Asian countries at times.
        Just like the Asian country of Israel often do, like being part of the Euros in football or the Eurovision Song Contest (but then again we even invited Australia this year to be honorary European for a night :P).

    • Germany & Denmark are Europe.

  • $A80/MWh is just about double the going (unsubsidised) rate in the US Midwest. It would be much less if it weren’t for the damage done by the Abbott government’s unremitting and stupid hostility. Australia can’t match Wyoming wind of course, but German prices should be attainable with reasonable policy.

    • Oh yes we can , shove all wind turbines in Canberra I believe it’s very windy when the politicians are in town.

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