Electricity from wind power in Austrailia is already less costly than either coal or natural gas, according to Bloomberg New energy Finance. Solar and other forms of alternative energy are quickly gaining ground, also. Older coal fired plants are still generating energy at lower prices, but only because the construction costs from years ago have been completely depreciated. New costs of coal or natural gas development would now be greater than the cost of new wind farms.
Here is a portiion of the article from Bloomberg New Energy Finance:
Renewable energy now cheaper than new fossil fuels in Australia
“The perception that fossil fuels are cheap and renewables are expensive is now out of date”, said Michael Liebreich, chief executive of Bloomberg New Energy Finance. “The fact that wind power is now cheaper than coal and gas in a country with some of the world’s best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head,” he said.
Bloomberg New Energy Finance’s research on Australia shows that since 2011, the cost of wind generation has fallen by 10% and the cost of solar photovoltaics by 29%. In contrast, the cost of energy from new fossil-fuelled plants is high and rising. New coal is made expensive by high financing costs. The study surveyed Australia’s four largest banks and found that lenders are unlikely to finance new coal without a substantial risk premium due to the reputational damage of emissions-intensive investments – if they are to finance coal at all. New gas-fired generation is expensive as the massive expansion of Australia’s liquefied natural gas (LNG) export market forces local prices upwards. The carbon price adds further costs to new coal- and gas-fired plant and is forecast to increase substantially over the lifetime of a new facility.
BNEF’s analysts conclude that by 2020, large-scale solar PV will also be cheaper than coal and gas, when carbon prices are factored in. By 2030, dispatchable renewable generating technologies such as biomass and solar thermal could also be cost-competitive.
Austrailia is leading the way in alternative energies. It didn’t happen without government involvement and leadership. They serve as a model for all other nations to begin to move to renewable energy.
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