Key role of energy storage ignored in power debate

Par Conroy
28 Sep 2017, 9 p.m.

Robert Monteath’s opinion piece (NH 27/9) is based on out-of-date statistics and does not acknowledge the important role of energy storage. 

Nineteen per cent of Australia’s electricity production is already coming from renewable energy. Bloomberg predicts renewable energy will provide 42 per cent of electricity generated in 2030 and 59 per cent in 2040.

This trend is also occurring globally; according to the International Energy Agency 23 per cent of global electricity production is from renewable energy and they project it to be 37 per cent in 2040.

Australia’s fundamental challenge is that its power stations are getting very old, 70 per cent of Australian coal-fired power stations are operating beyond their planned plant life and need a flexible and reliable replacement. The most cost-effective replacement is a combination of solar, wind, storage and gas peaking plants.

Bloomberg New Energy Finance is the global leader in estimating the cost of new power plants. Its research puts the Levelised Cost of Energy (LCOE) (which accounts for the fact that the wind doesn’t always blow nor the sun shine) of a new ultra-supercritical coal-fired power station at $A133 per megawatt hour (MWh); significantly higher than the LCOE of new-build wind at $A57/MWh, solar $A71/MWh or combined-cycle gas at $A74/MWh. Wind farms are being built in Australia with an unsubsidised LCOE below $55/MWh. Optimally located solar farms produce electricity 30 per cent of the time and the windfarms 40 per cent of the time. Due to the size of our continent, we have great geographical diversity. With sensible transmission planning and investment we can have solar farms in South Australia producing electricity as the sun is setting on the east coast and we can have wind farms in Tasmania producing when Queensland has no wind. This increases the reliability of renewable energy.

We also need to couple renewable energy generation with either storage, in the form of pumped hydro and batteries, or gas peaking plants to ‘firm’ up their energy production. Energy experts, including the Australian Renewable Energy Agency and AGL, place the cost of firming (the cost of adding peaking gas and storage to make renewable energy available when it is needed) as an extra $20-$40 MW/h. Even when you include the additional cost of firming to the cost of renewables, right now dispatchable, completely reliable wind and solar power is cheaper than new coal-fired power plants. 

It is economics, not the environment, that is killing off the concept of new coal-fired power stations.

Not a single new coal-fired power station will be built without massive government subsidies. The ideological obsession is by those pushing for new coal-fired power stations against all the evidence.

Coal has a good future in this country. Metallurgical coal will be in demand for decades to come; thermal coal will continue to be exported to nations without our renewable energy options. And our existing coal-fired power stations will be needed.

But we need to be honest with energy workers and coalminers, change is coming. We must make the transition with sensible planning from all levels of government.

Above all, the debate must be based on facts and hard evidence, not out-of-date assertions made by those with an ideological axe to grind.