Should the argument really be about the daily cost to the consumer or should it be about the long term cost to the community and environment?
That answer clearly depends on who is doing the arguing and who you ask. A preponderance of voters will answer with their wallets while academics/environmentalists will answer as advised by their expertise.
Politics is the art of the possible, and what is possible often has no connection with what is needed.
That’s what the Hard-Right have made it. The Soft-Right (Labor) have had little choice but to follow.
The politics has been in manipulation of perceptions. Which costs most? Even a cursory glance at the trends shows that old-style centralised generation carries highest long-term costs. That’s difficult for the average voter to see through the fog of FUD stirred up by the COALition.
It is all and more. For a good decision-making, financial (consumer cost) impacts, environmental impacts as well as the social impacts needs to be considered. Each option requires a assessment considering these three aspects and then try and provide a balanced outcome (or compromise somewhere in the middle). This would most likely cause a incremental step change. The same process can be repeated after a number of years and other smaller incremental changes can also be made. The smaller incremental steps when added up over time can create a significant change (a big step).
Most of the arguments about our energy future are polar and ideological. They include things like it is Australia’s role to save the planet at all costs, reduce cost of electricity ignoring any impacts or people will die because of heating cooling affordability.
Until all three are consider and balanced, the Australian (‘political’) debate will remain stagnant.
Those at the polar ends of the debate also need to realise that their position may not be palatable to others and they also may need to compromise to allow long term change. Not doing so and being obstructionist, they become part of the problem and not part of the solution.
There’s obstructionist and then there’s obstructionist. I reckon it’s time to stop pandering to those who would endlessly flog dead horses, decide what we need to do and (as Zibelman said) get on with it. We’ve delayed too long to allow ourselves to be delayed any further by their obstructionism.
What are the upfront capital,costs of renewables? One example.
Some relevant debate and numbers re the not so dirty coal alternatives.
So a new coal fired 1gW of generation will cost just shy of $4b Aussie.
If we turn this into residential solar PV it would need up to another 1.5M new residential installs providing 16kWh each per day. It would require per residence between 4kW and 6kW of installed solar. This is allowing for rooftop orientation variations, seasonal movements and cloudy days.
So around 22.5 million new 330W solar panels. That’s a really big number.
Without STC’s or rebates the install cost could be around $9b. That’s also a big number. Or simplistically more than twice the cost of a lower carbon coal fired power station, and three times the cost of a gas fired or old style coal generation.
Without storage such a solution is very limiting. If you add in battery storage this cost estimate goes up to somewhere between $30b and $50b. The lower guesstimate assumes a 5 year battery life, while the second assumes higher capacity storage leading to a 10year battery life.
In respect of the government budgets - Federal or NSW state it would seem unlikely they will commit $9b to a solution that does not provide storage, and even less likely the $30b -$50b needed for residential battery storage. It would be as big a project as the NBN, and that is to replace only one power station!
Notably Solar PV preferably with battery storage is something we could start tomorrow and complete in a number of years. In simple political terms it comes down to what is affordable.
One answer is it is privately funded by 1.5M house holders taking out a further $35,000 mortgage on the family home. This is against a saving of approx 20c kWh assuming they all stay grid connected. Or $1,200 per year per household as the payback. Might take a few years?
If government invests in the solution directly all it will save is 5-6c of generation costs. The balance of the saving is approx $2b of lost revenue to the likes of AGL, Ergon etc. That’s a $20b hit over ten years to big business and state govt revenues.
Which ever way it is funded solar PV in this example will not bring down the cost of electricity. It will simply take 1.5 million customers out of the system, as notionally all power generated is stored and used to power each residence. It’s an easy householder decision. Would you having invested $35,000 on the rooftop use all your stored power at home to save 20c per kWh or sell it back to the grid at 6c.
Solar PV estimate based on approx $1,200 per kW installed, or $6,000 for a 5kW nominal capacity. No offsets, subsidies or STC.
One also need to consider the costs to augment the distribution and potentially transmission networks to allow two way flow as most of the current network is a one way flow (from the major generators to the end consumer). Such exercise will not be cheap (many potentially 10s bilions) and would be ultimately paid by the consumer, pushing up electricity prices. This is also why small scale highly dispersed generation has limitations and is possibly not the best long term avenue to take. Having large scale renewable generators not only produce per unit of electricity cheaper, but requires less network augmentation (cost).
These costs will also be offset, if and when the non-renewable industry factors in environmental costs associated with non-renewable electricity generation. These costs could include things like carbon and capture/carbon emission controls, legislative financial penalties either through taxes, ETS or licencing to emit CO2 etc.
Losses in the network also need to be considered as well as additional redundancy in the network (for any type of generation) to ensure reliability of the network including continuous supply when there is partial system or generation loss.
Also talking about losses, listening to one of the BCC environment reporters on BBC World early this morning, it was discussed some of the challenges facing renewable energy. One such challenge using China as an example, is transmission losses from generation to the consumer. China is spending a significant amount of money developing, particularly solar farms, in NW China. NW China has been selected for a number of reasons, including it has the highest solar/light intensity rates in the country and also to minimise land use conflict (in the east of China it is highly developed and any solar farms would compete directly with farming and/or the limited areas containing environmental values that remain). While the NW China option seems logical solution, it has proven to be a headache for the government as they, using best technologies available today, have 85% losses from NW China to the high demand areas in eastern China. The Chinese government is spending money to see if technologies can be developed to reduce these losses (which arise due to transmission distance)…
While renewable generation costs such as solar are becoming similar to say non-renewable generation at the generator, the China example shows that considering the generation costs is not number to use when comparing renewable with non-renewable. In the case of China, costs of transmission losses make the per unit of energy cost delivered to the consumer about 6 times that of their non-renewable counterparts.
Many countries will also face the same dilemma. Is say prime farming used for solar farming to reduce energy costs or does farming continue to ensure that there is sufficient food supply to feed the population. It is an interesting dilemma as it is often thought that food is more critical than energy, but will this remain the same in the future and will government sacrifice food production (potentially increasing food costs through reduced supply but same demand) to ensure cheaper electricity prices?
Large scale solar farms may provide cost benefits due a number of factors including cheaper land as may be more remote than suburban housing, cheaper panel cost due to the bulk nature of the purchases, a single “to grid” solution rather than a lot of household units, use of existing High Voltage transmission infrastructure, & commercial credit arrangements for better loan terms.
Qld has started some of these larger farms and I guess with time will either show them to be a better investment or not. One benefit most likely will be the lower lifetime carbon cost and that weighed up against carbon burning sources may be the really only important thing we all do ie reduce our carbon consumption and atmospheric release.
All other considerations may pale into insignificance as time progresses.
Most people try to point of the cost of households doing it, and households certainly took up the installs in the shadow of relatively poor Government action in moving to less carbon intensive power generation and the rising cost to consumers of using the carbon burning generation. This however fails to look at the opportunity of large scale renewable energy production particularly as much of Australia benefits from high solar energy radiation per square metre and large coastlines and wind sources near where a great deal of the population reside.
Those who say our carbon generation is only minor to others also fail to look at the amount of coal which we do not burn ourselves but that we supply to overseas countries who then do burn it. We as a country are as culpable as any other in the high emissions of carbon.
This is very much a catch 22. If Australia didn’t export its coal, would this prevent or result in the shift from coal generation to renewable generation sources.
While we may feel good, such a proposition was highlighted in relation to the Adani mine and its need.
Adani/Indian government indicated that it prefers Australian coal for a number or reasons, including historical low sovereign risk, stable politically, stable and reliable workforce, high calorific content etc. They also indicated that should Adani Galilee mine not proceed, it does not mean that India would be forced to invest in renewable generation. The resulting outcome most likely would be that India/Adani sources it coal from elsewhere in the world where the risk profile is higher. It is also likely that such coal could result in higher CO2 emissions per unit of coal fired electricity.
If we could control what other countries chose to do, then restricting coal exports would be an option to reduce world CO2 emissions, but since Australia has not ability to force the hand of over countries, restricting Australian coal supply may result in long term higher CO2 emissions.
I suppose it is a bit of which is the ‘lesser evil’. At this stage it appears that Australian coal may fall into this category.
Sorry the use of our coal is not the lesser evil. Adani/India may like our coal exports because of less risk of supply but this is no excuse for the selling of it, perhaps if their supply was more risky they are likely to look at alternative means of getting power and this likely means a move to more sovereign generation eg solar, wind, tidal, geo-thermal on their own soil using their own natural resources.
I grasp the idea of lower emission coal but the reality is that regardless of which type it is there is a higher rate of carbon emission than many alternative sources. It seems the “easy answer” is generally let’s burn more carbon because we don’t want to spend on research, adaption, renewables. Australia’s answer is typically let’s sell our coal because other countries like how we do it and that some of our coal is more carbon energy rich than others and finally we (corporate) make money.
Possibly one future.
Consider if the cost of a large scale solar scheme (capital investment, operating costs and profit) could provide wholesale electricity at 1c per kWh, the consumer would still pay around 15c per kWh plus the daily connection service charge of around $1.00 to access the effectively free source?
If in going to rooftop residential solar with storage you install enough capacity to not normally import any power a residence you save at least the current full retail charges of 20c per kWh or more because you cut out the grid charges. True you could also export back, however there is no point if you have residential storage unless your batteries are full and you are generating a surplus. Under that scenario the future market is likely to price the export at wholesale rates. There is no need to upgrade any of the grid. Functionally it reduces the demand or draw as when you start to run out of stored power you can trickle feed power instead of drawing off a heavy peak.
Large scale solar will save on PV panel costs, better site locations and lower cost invertors. These savings may be reduced due to the associated engineering, design, project construction and supporting infrastructure costs of putting it all in one location.
What ever the long term cost reductions might be from solar PV generation or wind power, the crushing defeat for renewables on economic grounds remains how to fund the massive investment required upfront compared to current technology and grubbier carbon based generation.
My semi educated guess is Australia would need to invest the equivalent of more than $50b annually over ten years in renewable generation and storage to go to a total low carbon electricity sector. And that excludes any uptake in electric vehicle needs.
This is ten fold the NBN. How wrong could we go with a $500b investment?
And how could you ensure the political stability to support the program. It appears unlikely in the current political climate?
That would a nice outcome, but in reality, if Australia chose to no export to coal to any other country, there would be many others immediately on the phone offering to supply the shortfall…or they would ramp up their own domestic production.
Unfortunately Australia is only one player in the export market and a coal fire power station does not really care where rhe coal comes from (http://www.worldstopexports.com/coal-exports-country/).
The refusal to export would create unnecessary conflict with another country for our own domestic political gain…without potentially changing the amount of coal consumed and not reducing the amount of CO2s emitted.
Maybe, maybe not?
Should the consequences be considered at all?
Leaving the easy question of how you get this through our parliament aside.
Do we need to get all the steel and electrical machinery and solar panels we import before we stop selling coal to the countries that make them?
Mining is 40% of our current GDP so we might wisely need a plan to transition all of this investment and workforce to something else. Perhaps we could invest in Making PV panels and transformers and semiconductors and generators and high power gear heads with airfoils. It would be a bold move!
At the same time do we also stop exporting our other carbon based fuel LNG? There is a bit of an oversupply currently which is driving down the returns for exports. And it was putting pressure on domestic low cost supply which has been a big concern. LNG is also a great halfway house to reducing carbon so keeping it all for home might just work?
The one big positive for me is if we did stop exporting carbon based fuels and some of our customers stopped doing business with us - if the list includes India and the Philippines it will also put an end to talking to their call centres!
There’s so much misinformation about that practically anything can be “proved”. Bearing in mind that we’ll need to spend money anyway; to maintain what we have, increase capacity and replace what’s reaching end-of-life, what matters is what’s most cost-effective in the long-run. To me, it seems more likely that the net cost of going 100% renewable will be some multiple of of the net cost of meeting our Paris commitments:
Given the cost trends, maybe less.
Meanwhile, has the private sector proved so untrustworthy that we need to consider nationalising the entire grid; poles & wires, generators and all?
More likely that nothing can be proved because it is still to happen?
The suggestion that taking just the residential portion of the grid to 100% renewables is a funding commitment of $500B Aussie order of magnitude investment in the future is intended to ask the question. Do we really know the full scale and scope of what we are contemplating?
Irrespective of the long term outlook and payback, there needs to be a definitive plan and cost assessment with cash flows the same as any other business case. We also might find having one such option costed spurs others on to find a better and cheaper way.
My dumb view is to properly fund what Australia needs to do we will need to shut down the building and construction industry for the next ten years so that we can divert the funds instead to creating the renewable low carbon future. And until such time as the Federal Govt has a properly costed and accepted plan my guess of $500B of funding for the residential electricity component of greenhouse gas emissions is as good as any other.
And in reality the solution has been left 99% to the poor old consumer as the Government in comparison has done very little and spent much less than all the consumers who have put solar on their roofs. Turnbull understood that when discussing the Snowy mk3 plan. What plan?
One small step:
More barriers fall:
“Longstanding obstacles to greater deployment of renewables have lifted, thanks to the three enablers: rapidly approaching grid parity, cost-effective and reliable grid integration, and technological innovation. Once dismissed as too expensive to expand beyond niche markets, solar and wind can now beat conventional sources on price while increasingly matching their performance. The idea that renewables present many integration problems in need of solutions has reversed: The integration of solar and wind is beginning to help solve grid problems. Finally, renewables are no longer waiting for supporting technologies to mature, but instead seizing cutting-edge technologies to pull ahead of conventional sources.”
“Wholesale prices - which are one component of what households and businesses pay for power - were lowest last month in South Australia at $72 per megawatt-hour. The state sourced 55 per cent of electricity from renewables and 58 per cent when rooftop solar was added, Hugh Saddler, an analyst with The Australia Institute, said.”
“Victoria’s price of $79 per MW-hour was next lowest among mainland states. Renewable projects are surging in that state, with their share of supply jumping by a half in three years from 12.3 per cent to 18.9 per cent.”
"NSW had the most expensive wholesale power last month at $82 per MW-hour. Clean energy - including hydro running hard - reached only 14 per cent of supply in the state. NSW sources 12 per cent of its power from Victoria or Queensland, "
I wonder how this relates to the statement today in question time by the Federal Member for Calare The Hon Andrew Gee that South Australia has the most expensive electricity in the country at 50c kWhr? The high cost was attributable to the high renewable component of the SA supply.
I’m not agreeing with the statement by the member. I don’t live in SA. Our cost is half that in Qld. Something is not making sense here?
SA is at the $0.428816 per KWH area, high by any comparison, and any 'Honourable" Nationals MP trying to score a political point and support his coal donors would feel happy to round up. Why that round up would be necessary considering the $0.428816 only he knows. Instead of showing honesty in the number, some might think he went for partisanship, ideology, or just ROI for his donors.