Renewable energy is now Australia’s cheapest energy option, even when the cost of storage to make the intermittent power sources reliable is added.
At the same time so-called clean coal, using Carbon Capture and Storage (CCS) technology, will not be commercially viable until 2030 at the earliest, meaning it will not help Australia meet its Paris Agreement emissions reduction obligations, energy market analyst RepuTex has said.
AAP Newsagency reports RepuTex finds in a major study just released that while there are many opportunities to cut emissions, carbon capture and storage is not among the cheapest.
Traditionally, gas power has been Australia’s cheapest source of reliable power.
However, with gas prices rising and the cost of storage technologies falling, RepuTex said the ‘true cost’ of renewable energy, generation plus storage, was now cheaper.
This means new renewable energy with storage, whether batteries, pumped hydro or something else, would be able to provide reliable, cheap energy even if there was no wind or sunshine.
“Based on the economics at this point the race has been run and won with (renewable energy plus) storage well ahead of CCS and it looks like we’ll stay that way all the way through to 2030,” RepuTex energy and carbon market chief Hugh Grossman told AAP.
However, a clear, longer-term market signal is needed to let investors decide where to put their money over the next few decades.
“Are we aiming for a 26 per cent emissions reduction target by 2030, or 100 per cent clean energy by 2050?” RepuTex research head Bret Harper said.
“Each of those targets has different least-cost pathways but the same investment timeframe.
“Identifying a long-term target, with a clear signal on the rate and pace of change, will therefore help to guide the correct investment in the sector.”
C
CS is lauded by the resources industry as a vital part of the future energy mix because it could drastically reduce emissions from coal-fired power stations.
However, Mr Grossman said it was very expensive technology that is ‘arguably still in the development stage’.
By the time it is commercially viable, Australia’s energy mix may well have changed so CCS will not be needed.
“As the cost of solar or wind or general storage comes down, that will make it even more difficult for carbon capture and storage to compete,” Mr Grossman told AAP.
The analysis finds costs for CCS could drop to about $100 a megawatt hour by 2030, making a large-scale project feasible then if there is still any appetite for building base-load-only generators.
AAP reports Mr Harper said base-load-only power was likely to be too inflexible to compete in the future electricity system because it can’t easily ramp up or down.
‘That is not good news for coal generation, irrespective of how clean it is,’ he said.
Congrats, Australians!
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