Fact sheet

Fact Check: Malcolm Turnbull says renewables plus storage are cheaper than coal and nuclear for new power generation. Is he correct?

Publisher
Liberal Party of Australia Renewable energy Energy demand
Description

Amid debate over climate change, former prime minister Malcolm Turnbull claims that renewables plus storage are cheaper than new coal and nuclear power for new power generation. Mr Turnbull's claim is a fair call. Under current policy settings and economic conditions, it is generally cheaper to produce electricity from wind or solar sources than it would be using a new coal or nuclear plant, with or without "storage". However, the issue is complex. As energy experts consulted by Fact Check said, the extent to which variable power generated from renewable sources requires back-up (or "firming" as it is technically known) to deal with intermittency depends on the proportion of our power being generated from such sources. the greater the reliance on renewables, the greater the need to spend additional money providing back-up sources of energy to safeguard supply. In turn, this would be expected to add to the cost of renewables over time. Also, new coal-fired power plants would most likely be required to accept a "risk premium" when obtaining finance, reflecting uncertainty over international and domestic climate and energy policy, future clean-up costs, and higher construction risks. According to some estimates, interest rates faced by new coal projects as a consequence would be twice those applying to wind or solar projects. Factoring this in makes new coal an even less attractive proposition. The best available data suggests that under current conditions, nuclear energy would not be a cheaper source of electricity than renewables, as Mr Turnbull points out.
Verdict: Fair call

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