New research has shown that electricity from unsubsidized renewable energy is now cheaper than new-build coal and gas-fired power station electricity in Australia.
Bloomberg New Energy Finance has found that energy produced from wind farms is around $80 per megawatt hour, compared to $143/MWh for new-build coal and $116 for new-build gas-fired energy generation. This does include carbon costs, but even without it, wind is about 14% cheaper than gas.
“The fact that wind power is now cheaper than coal and gas in a country with some of the world’s biggest fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head,” said Bloomberg New Energy Finance’s chief executive Michael Liebreich.
Another interesting point from the study is that some of Australia’s largest banks and lenders are unlikely to finance new coal projects for fear of their reputation, meaning fewer and fewer investments are headed toward increasingly controversial coal. Carbon prices are also hiking the cost for new coal and gas plants. BNEF believes that by 2020, large-scale solar photovoltaic projects will also be cheaper than coal and gas, even when factoring in carbon prices.
Australia relies on coal as much, if not more, than most other countries, despite also having some of the best renewable resources on the planet. Either way, this research does show that new coal plants are highly unlikely to come around, which is encouraging not just for Australia, but for the rest of the world.
Image CC licensed by Lawrence Murray: Windfarm in Albany, Western Australia