Solar & Wind Slash Cost Of Electricity In Australia, Power Indigenous Communities

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Electricity in Australia is some of the most expensive in the world. The cost of electricity from solar and wind is dropping so rapidly that renewables are pricing coal and natural gas out of the utility market and creating a pathway forward that will allow Australia to enjoy wide access to zero-emission power by the year 2033.

A recent report by REN21 shows that, worldwide, more solar and wind power facilities are being installed than those powered by all other sources combined. Nowhere is that trend having a more dramatic effect than in Australia.

At the current pace, Australia could derive 50% of its electricity from renewables by 2030, which would meet the target it set for itself at the Paris climate summit in December 2015.

100% Renewable Electricity by 2033?

But if prices continue to drop and that pace increases to 6 gigawatts annually from about 3 gigawatts today, the nation could reach 100% by as early as 2033, according to RenewEconomy. That would result in a 55% decrease in Australia’s national carbon emissions.

Right now, the cost of renewables in Australia is between A$65 and A$78 per MWh, which is less than the average wholesale price at the grid level. The government of South Australia has just entered into an agreement with SolarReserve to build a 150 MW concentrated solar power facility at A$78 per MWh — considerably cheaper than the cost of electricity from natural gas.

There are anecdotal indications prices have fallen even more, to A$60 to A$70 per megawatt-hour recently. Within a few years, they could dip below A$50 per megawatt-hour, according to some analysts.

Renewables For Indigenous Communities

Renewables are particularly well suited to the needs of Australians, many of whom live in remote areas far from the country’s principal cities that dot the shoreline. Wind and solar can supply the needs of residents without the expense of extending the grid. Many indigenous communities now rely on diesel generators for electricity, but the country’s Solar Energy Transformation Program funded by the  Australian Renewable Energy Authority is replacing the generators with solar farms.

The off-grid projects will see 10,000 solar panels installed near 10 indigenous communities, with a total of 3.325 MW of capacity. The PV installations will save more than one million liters of diesel fuel every year. Plans are in the works to extend the program to a total of 28 such communities.

One such installation at Daly River in the Northern Territories will include a 2 MWh battery storage component, making that project a true microgrid capable of generating and storing its own electricity independently of the grid, according to PV Tech.

The Case For Pumped Hydro

Energy storage is a hot topic of conversation in Australia, with Tesla’s Elon Musk promising to build what will be the world’s largest grid-scale battery storage system in South Australia this year. But RenewEconomy argues that pumped hydro systems are uniquely suited to the terrain found in the country and will cost less to develop and build than battery storage.

It claims there are more than “5,000 sites in South Australia, Queensland, Tasmania, the Canberra district, and the Alice Springs district that are potentially suitable for pumped hydro storage. Each of these sites has between 7 and 1,000 times the storage potential of the Tesla battery [system] What’s more, pumped hydro has a lifetime of 50 years, compared with 8-15 years for batteries.”

There’s another reason to consider pumped hydro. “Most of the prospective … sites are located near where people live and where new PV and wind farms are being constructed.”

Smashing The Opposition

Politically, Australia’s utility industries and some key government leaders have been fighting tooth and claw to preserve traditional generating facilities, but economics makes for an implacable foe. Arguments based on ethics and global warming can always be subverted if people like the Koch brothers spread enough cash around. A lie repeated often enough becomes the truth for large segments of the population.

But numbers don’t lie. The entire global economic system is set up to seek out the lowest price for goods and services. Renewables are already cheaper than coal, natural gas, or any other source of power and getting cheaper all the time. Australia, which has abundant coal reserves, will leave those resources in the ground, to the great relief of the planet. It is quickly becoming a beacon for renewables for the rest of the world to follow.