Discussion paper

Australia should transition quickly to a 100% renewable electricity grid, as it is cheaper and less risky than the alternative of building new coal-fired power stations. This can be achieved by 2030.

The Alternative Technology Association (ATA) is a not-for-profit organisation that enables, represents and inspires people to live sustainably in their homes and communities. Established in 1980, the ATA provides expert, independent advice on sustainable solutions for the home to households, government, industry and corporate clients.

Based on recent research by the Australian National University (ANU), we forecast likely progress towards a fully-renewable grid in the National Electricity Market (NEM). We considered recent trends and developments in projects such as Snowy Hydro 2.0. Fully-renewable operation of the National Electricity Market requires 93,300 megawatts (MW) of renewable generation capacity, according to the ANU. If construction of wind and solar generation continues at the 2017 rate, this level will be attained in 2040. To reach this milestone by 2030 would require an acceleration of 80% from the 2017 rate. This is illustrated in the following chart.

The following chart forecasts the construction of energy storage facilities by project category in the National Electricity Market. Energy storage capacity is shown in megawatt-hours (MWh), and also as a percentage of the 490,000 MWh required for a 100% renewable grid. “PH” is an abbreviation for “pumped hydro”. The category “Other” includes Cultana, Kidston, Aurora and the Jamestown and Vic batteries. “Hilltop PH” represents 21 small, off-river facilities as proposed by the ANU.

Based on this forecast, energy storage will be sufficient to support a fully-renewable grid by 2030. Electricity from new-build coal-fired power stations would likely cost between $81 and $182 per MWh. This becomes a range of $102 to $203 once we allow for hidden health impacts ($13/MWh) and climate impacts ($8/MWh). In a fully-renewable electricity grid, electricity would cost about $93 per MWh. This includes the cost of building energy storage and extra transmission to manage intermittency. The cost of renewable electricity is already in the lower range of the cost estimates for new-build coal-fired generation, even if coal’s hidden costs are ignored. And renewable costs will fall further in the future. Retail electricity prices from the 1990s are unlikely to return, regardless of the option chosen. Consumers are advised to shop around for a good deal, work on reducing their energy consumption and install rooftop solar if possible. Energy efficiency must not be neglected. Although this paper’s focus is on electricity generation, Australia has massive opportunities to save money and help the environment by getting smarter about how we use energy.

Australia should prepare a proper plan for 100% renewable energy, and implement it. Decisions should not be left to separate companies driven by short-term profits, as this may lead to a poor overall system. Until Snowy Hydro 2.0 is built, wind and solar should focus on NSW and QLD as their total level of renewables is low, so they can easily accommodate more. This will avoid the operational problems that see the market operator ordering South Australian wind farms to reduce their output, burning expensive gas instead of using free wind. Authorities should also address how to manage a high-renewable grid – the energy market must ensure that energy stores can be conserved for use at the end of a cloudy, calm week.

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