All episodes Episode 7 of 26
Will PV and Wind crush traditional generation?
Clean Energy Week: Bloomberg says wind and solar are already the cheapest new build, Reuters calls the market “unhelpful”. Both can't be right.
This week is Clean Energy Week.
That fact alone explains all the talk I’ve been hearing about wind and solar becoming cheaper to build than traditional power plant. Giles Parkinson had a good write up at Reneweconomy. He notes that with generation replacement becoming a real issue over the next decade, that wind and solar will be the lowest cost alternative to replace them.
I wanted to talk about the reducing cost of wind and solar in the context of the recent reuters article that called the electricity market “unhelpful”.
On the one hand, we have Giles Parkinson backed by Bloomberg New Energy Finance’s research that says wind and solar plant are becoming increasingly cost competitive. In fact, they claim that soon wind farms and solar plant will be built without the need for a power purchase agreement, something I spoke about last week.
Meanwhile Edward Hadas, an editor at Reuters contends that the price of electricity being so low as it covers the marginal costs would not adequately incentivise new generation entrants. And he claims that market prices alone cannot signal to our aims at preventing damage to the environment or to act as emergency reserve.
Hadas says that:
The market veneer confuses policy debates. Experts, not the market, will have to decide whether nuclear power is a good option, and whether the advantages of renewable energy sources justify their perhaps temporary additional cost.
I think this quote highlights the viewpoint. Hadas sees the market through a lens where large centralised stations provide the backbone of power. He talks about a natural monopoly in the poles and wires. Giles Parkinson’s analysis points to a new tomorrow. Where power is produced in a distributed manner, through a network of smaller PV and wind plant. Already we’ve got more rooftop PV installed than Victoria’s brown coal fired Loy Yang Power station. And the analysis points to 17GW total installation in 2030. That’s two and a half times more than all the brown coal in Victoria combined.
So has the market done it’s job? What do you think?
Mentioned in this podcast:
- Giles Parkinson: Bugger the utilities: wind and solar will be built anyway
- Edward Hadas: Static in the electricity market
The top wind farms
- Macathur: $1.1M
- North Brown Hill: $847k
Read the transcript
Transcribed from the recording by machine, then edited for punctuation and paragraphing. Names, figures and misheard words have been corrected where the original show notes or the rest of the series settle them; anything they could not settle is left as spoken, rough patches and all.
Hi there, I’m Jervis Whitley. Today is Friday, 26th of July, and you are listening to WindFront. Weekly roundup of the wind industry from Australia and around the world. Today, I’ll cover the weekly top three earners, and PV and wind crush traditional electricity plant.
Well, this week is Clean Energy Week, and that fact alone explains all the talk I’ve been hearing that wind and solar becoming cheaper to build than traditional power plant. Giles Parkinson had a good write up at Renew Economy. He notes that with generation replacement becoming a real issue over the next decade, that wind and solar will be the lowest cost alternative to replace them. I wanted to talk about reducing the cost of wind and solar in the context of the recent Reuters article that called the electricity market unhelpful.
On the one hand, we have Giles Parkinson backed by Bloomberg New Energy Finance’s research, that says that wind and solar plant are becoming increasingly cost competitive. In fact, they claim that soon wind farms and solar plant will be built without the need for a power purchase agreement, and as something I spoke about last week in the context of the energy market reform in the UK. Meanwhile, Edward Hadas, the editor at Reuters, he contends that the price of electricity is so low, that it barely covers the marginal costs and does not adequately incentivize new generation entrants. He claims that market prices alone cannot signal to our aims at preventing damage to the environment, or to act as emergency reserve. Here’s a quote from Hadas. He says that the market veneer confuses policy debates. Experts, not the market, will have to decide whether nuclear power is a good option and whether the advantages of renewable energy sources justify it, they’re perhaps temporary additional cost.
Now, I think this quote highlights the viewpoint. Hadas sees the market through a lens where large centralised stations provide the backbone of power. Talks about a natural monopoly in the poles and wires, which is true, but not really central to the debate. Giles Parkinson’s analysis points to a new tomorrow, where power is produced in a distributed manner, through a network of smaller PV and wind plant. Already we’ve got more rooftop PV installed than Victoria’s brown coal fired Loy Yang power station. And their analysis points to 17 gigawatts total installation by 2030. That’s 2.5 times more than all the brown coal in Victoria combined. So has the market done its job? What do you think?
Finally, let’s have a look at who earned the most in wind this week. But before I do, can you guess? And if you guessed Macarthur, you’d be right, it’s Australia’s largest wind farm and it topped $1.1 million this week, just as high as last week in fact. North Brown Hill had a huge week this week with over $800,000 earned.
So that’s it for me this week, until I see you next time, keep buying those green electrons.