Solar, wind, landfill to make cheapest power by 2030
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Solar and wind technologies will be the cheapest way to make electricity by 2030, according to a new Australian Energy Technology Assessment from the Australia’s Bureau of Resources and Energy Economics.
The report, penned with help from consultancy WorleyParsons and the CSIRO, considered 40 different generation technologies and calculated a “Levelised Cost of Energy” (LCOE), “the minimum cost of energy at which a generator must sell the produced electricity in order to achieve its desired economic return” per megawatt hour.
LCOE is calculated with a fiendishly complicated equation that is explained on pages 20 to 25 of the Assessment (PDF). It’s also worth noting that Australia’s government promotes its unpopular Carbon Tax package as delivering a “clean energy future,” which may lead some Reg readers to recall Yes, Minister’s observation that one only conducts an inquiry if one knows the result in advance.
With those caveats in mind, the report’s fondness for solar bears up well as the explanation for the sun’s ascent is declining prices for photovoltaic cells. Manufacturing capacity for such devices has apparently already increased and will likely do so again and again between now and 2030, when LCEO of AUD$116 will be achievable.
Larger and more efficient wind turbines will help to blow away costs for wind generators. Wind farms will also benefit from cheap Chinese wind turbines hitting the market. Generators relying on the breeze also have low maintenance costs, as most of their installations are new and few are near end-of-life. New entrants, of which the Assessment expects to see over 100 operating at megawatt scale, will have even fewer depreciation-related problems. The result is LCOE of AUD$93.
Splitting the two between the two is landfill gas power, which will hit LCEO of AUD$99 in 2030.
Brown coal would remain cheaper than wind by 2030 – with an LCOE of AUD$92 – were it not for Australia’s carbon tax. With the tax and projected future carbon prices factored in, brown coal will hit $157. Indeed, prices for all forms of coal generation will rise, with carbon pricing a very significant factor in expected increases.
Intriguingly, the report sees little success for geothermal energy, a resource Australia possesses in considerable quantities and also one that has generated some stock market excitement. Costs for that source aren’t projected as falling significantly even in the 2050s.
The Assessment is full of caveats about future technology developments and assumptions about maintenance costs, but we feel certain it will generate a lot of hot air in days to come. ®
COMMENTS
Re: Exchange agreements
I believe Denmark (lots of windpower) and Norway (lots of hydro) have an exchange agreement.
The UK has similar arrangements with France and Russia. They give the UK nuke power and oil and the UK gives them vast piles of money.
Re: Gas? @JetSetJim
"I agree that there's no current experience of decommissioning outside of disasters, so it's difficult to put a price tag on it, but it's misleading to the overall results to at least not try to factor it in."
There might be no Australian decomissioning experience, but actually there'a a wealth of global experience in decommissioning nuclear power plants. UK's NDA are doing a sterling job getting to grip with the old British nukes albeit very,very slowly, Germany's already getting rid of its older plants (pre-dating the nuclear exit decision), Italy likewise, but in particular the Americans have a whole host of nukes in decommissioning, with a number of these now back to greenfield status with completion costs for all but ongoing long term waste storage.
One of the interesting things (courtesy of Wikipedia) is that the US Yankee Rowe and Maine Yankee reactors were taken back to greenfield in only 8-11 years and for around USD 600m each, and the Fort St Vrain plant looks to have been even quicker and cheaper. Convention elsewhere is to leave the reactor in situ to cool down for up to 40 years, which (from the commanding heights of ignorance) seems unreasonably slow and expensive to me. Ballpark numbers of around €3.5bn per reactor are being quoted by EdF. UK NDA figures are between the Yankee and EdF numbers, but there's a suggestion that the NDA are leaving the sites for so long before site clearance that economic discounting is a bigger contributor to the final cost than the engineering. You do of course have long term spent fuel storage/disposal, but that's just the very long term cost of puting it in a pit and keeping people out.
You do have to ask why the Americans can have a site returned to greenfield eight yeras after generation finished, but the UK NDA will be decommissioning the Wlfa plant that ceased generation this year, and expect to finish site clearance in 2101 (yes, twenty one oh one).
Re: A small question
[Disclosure: one of my customers is a large wind turbine manufacturer]
> When the wind blows hard you make hydrogen and oxygen.
Actually, when the wind blows hard, you shut down.
Wind turbines have a range over which they are useful - too little wind, and they don't turn. Too much, and you risk mechanical failure. Only inbetween these extremes is the tubine at all viable.
But even if you're in the right windspeed range - how are you going to *store* that hydrogen? It takes a fair amount of power to run a cryo setup (which would need to run whether the turbine is operational or not), and a compressor - although simpler to operate - is unlikely to be a sufficiently reliable and effective means of energy storage. Hydrogen just isn't that good as a long-term storage medium. It's unlikely that you'll end up with a net energy contribution outside of a spreadsheet model...
> Keeping the oxygen means that higher thermal efficiencies can be achieved when burning the hydrogen.
Burning it *in what*?
Raising Th for the same Tc will always improve the peak thermodynamic efficiency - but you still need a combustion chamber that will function at such temperatures. Have you seen a NASA launch?
> General cost can be reduced enormously by taking away subsidies
That is probably true of the wind energy market: take away the subsidy, and the market would vanish. The cost is dramatically reduced (to zero) - but this doesn't actually help at all.
> With payback times of less than five years
Such payback times are possible only because of the way the FIT is structured. This takes money from those that cannot afford generation systems and passes it to those that can. If the FITs were abolished tomorrow[1], you can wave goodbye to that payback period...
Vic.
[1] Yes, I know there are "guarantees" that they won't be. But they've already been halved once.
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