Could Solar And Wind Replace Fossil Fuels In Australia By 2040?

July 28, 2013 by  
Filed under Green Energy News

Clean Power
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Published on July 28th, 2013
by Giles Parkinson

30

This article was originally published on RenewEconomy

Solar and wind energy could replace all fossil fuels in Australia by 2040 if their recent rate of deployment is maintained and slightly increased over the next 27 years – delivering the country with a 100% renewable electricity grid “by default” as early as 2040.

The stunning conclusions come from research from Andrew Blakers, the director of the Australian National University’s Centre for Sustainable Energy Systems. It notes that nearly all new electricity generation capacity in recent years has been wind and solar photovoltaics (PV), and demand has also ben falling since 2008.

Blakers says that if this situation continues then Australia will achieve renewable electricity system by 2040, as existing fossil fuel power stations retire at the end of their service lives and are replaced with renewables.

And the cost will be no greater than having fossil fuels because, as Bloomberg New Energy Finance notes, wind is already cheaper than new coal or gas-fired generation and solar soon will be. These are the critical points – because renewables are often painted as expensive when compared to fully-depreciated, 40 years fossil fuel plants. But not compared with the new capacity required to replace ageing fossil fuel fleet.

Blakers says his scenario works even using the more conservative technology cost forecasts prepared by the Bureau of Resource and Energy Economics. These forecasts are being updated, but they came to similar conclusions as BNEF on technology cost trends, just not quite as quickly.

The 100% by 2040 scenario is probably not that much different in scope to current trends. Australia was sitting at around 10 per cent renewables in 2010, and will probably end up with at least 25 per cent by 2020, given current trends on rooftop solar and the fixed 41,000GWh target for large scale renewables.

BNEF this week suggested that could jump to 46% by 2030 as wind and solar replace retiring fossil fuel plant, and the rate of those retirements would likely increase in the following decade. Some retirements could be accelerated as inflexible fossil fuel generation found itself squeezed out of the market by renewables and the emergence of storage options.


The scenario painted by Blakers includes:

  • The currently-declining consumption of electricity stabilises at 2013 levels
  • New capacity to replace retiring fossil fuel power stations at end of system life is exclusively wind and solar i.e. no new gas or coal plant.
  • All existing fossil fuel power stations have retired by 2040
  • Existing hydro and other renewables is maintained but not increased
  • Capacity factors typical of good sites are achieved for wind (35%) and solar (20%). System lifetimes of 30 years are assumed.
  • Wind and PV installation rates of 1 gigawatt (GW) per year each are sufficient to meet the Government’s 2020 renewable energy target. Note that about 1 GW of PV was installed in 2012 and about 1 GW of wind will be installed in 2013.
  • In order to reach 100% renewables by 2040 the following installation rates are needed:

    • Wind: 1 GW per year until 2040; AND
    • Solar: 1 GW per year until 2020, then growing by 10% per year thereafter.

Blakers notes that South Australia already gets 29% of its electricity from wind and PV, and Tasmania gets almost all of its from hydro. ACT plans to get to 90% renewables by 2020.

This graph shows the rate of deployment out to 2040, with solar increasing by 10 per cent per year from 2020.

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While this shows total generating capacity as it grows – in the case of wind and solar – and shrinks in the case of fossil fuels. Note the accelerated decline after 2030.

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About the Author

Giles is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.


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  • Australia has over 2.4GW of solar pv installed with 1,000MW coming in the last year alone. They’ve pasted the inflection point, politics may influence the short term, but in the long term, fossil fuels have already lost in that market.

  • There is a fundamental difference between fossil and wind/solar energy. Wind and solar are available less than 50% of the time and not necessarily when you need it. So you need storage devices to get your through those times when to wind is not blowing and the sun isn’t shining.
    Nuclear is a green option that gives power 24-7 and It would appear that this should be part of the mix.

    • You are correct, Mike. There is an enormous difference between fossil and wind/solar energy.

      Wind and solar are available somewhat more than 50% of the time and will require storage and dispatchable fill-in in order to give us power when we need it. (Nothing is available 24/365. Every generation method requires fill-in and backup.)

      But wind and solar won’t wreck our climate, put our coastal cities under water, make much of our farmland unusable like fossil fuels are doing.

      Nuclear would be a decent option if it were cheaper, quicker to build and didn’t create hazardous wastes.

      Since we have renewables and storage which are cheaper, faster to bring on line and safer than nuclear we’re giving nuclear a pass.

      • Hi Bob:

        Nuclear gets built on time and on budget in China because the government does not meddle in the projects. (see http://www.scientificamerican.com/article.cfm?id=china-goes-nuclear-to-avoid-coal-burning )

        In Canada nuclear plants pump out power at 10 cents per kwh which competes very favourably with wind and solar.

        SNC Lavalin (a Canadian company) is constructing CANDU 6 reactors in Scotland that can consume spent plutonium from other reactors and end up with non hazardous spent fuel (see http://www.independent.co.uk/news/science/untested-nuclear-reactors-may-be-used-to-burn-up-plutonium-waste-8061660.html )

        • China is having trouble completing reactors on schedule. The most recent ones are stretching out to six years.

          China has a totalitarian government. We will not use the US military to force everyone to get out of the way while we build reactors with government money, so there’s no sense in talking about what China can do as if it tells us anything about building nuclear in the US.

          Ten cents is not good enough. And that ten cents does not include the cost of liability nor long term waste disposal. Furthermore we are very unlikely to be able to build nuclear for 10 cents, ignoring the subsidies.

          Wind is already under ten cents. Solar is right now about ten cents and falling fast.

          Look, Mike, you’re just one in a long string of people who show up here (as if you’re working tag-team) to tell us how wonderful nuclear is. We’ve heard it all before. Several times.

          Ask yourself this.

          If nuclear is as cheap and wonderful as you seem to think it is, why have not private companies used their money to build reactors (thorium, molten-sale, SMR, pebble-bed, Gen III+, Gen IV, breeder, fast, pick your favorite type) and make fortunes selling electricity to the grid?

          It’s a very basic and important question.

          The nuclear industry has known about all these various wonderful ways to make electricity in reactors, yet they have build none with their own money.

          Why?

          And while you’re pondering that simple question let me share a couple of statements from people who are in the nuclear industry and whose companies could build a new reactor with cash on hand.

          “Let me state unequivocably that I’ve never met a nuclear plant I didn’t like,” said John Rowe, who retired 17 days ago as chairman and CEO of Exelon Corporation, which operates 22 nuclear power plants, more than any other utility in the United States.

          “Having said that, let me also state unequivocably that new ones don’t make any sense right now.”

          “I’m the nuclear guy,” Rowe said. “And you won’t get better results (than) with nuclear. It just isn’t economic, and it’s not economic within a foreseeable time frame.”

          http://www.forbes.com/sites/jeffmcmahon/2012/03/29/exelons-nuclear-guy-no-new-nukes/

          “On July 30th, the Financial Times published an interview with GE’s CEO Jeffrey Immelt on the future of various energy alternatives. For decades, GE has played a significant role in many sectors of the energy business. It makes huge electric generators for electric utilities. It sells wind turbines. It sells solar installations and it recently added oil patch activities to its roster of companies. It has also been a leading supplier of nuclear power generation equipment. So for one of the leaders in that last space to suggest that nuclear isn’t a competitive solution now or going forward is a significant statement.

          Mr. Immelt expressed his view that it is almost impossible on a cost basis to justify investing in nuclear power plants for the future. ”So I think some combination of gas, and either wind or solar … that’s where we see most countries around the world going.””

          http://www.forbes.com/sites/joanlappin/2012/07/31/ges-immelt-natural-gas-now-much-cheaper-than-nuclear/

          • Bob:

            Your references are both comparing nuclear with natural gas not with wind/solar. If you buy into carbon induced Global Warming then you must recognize that natural gas emits half of the carbon of coal per BTU and the world cannot absorb that right now.

            I live in Ontario, Canada where we get 57% of our power from nuclear. Our nuclear power companies get 5.5 cents per kwh for their power and the remaining 4.5 cents is retained by the government to pay off the debt. Our nuclear power plants are not subsidized one dime. Its wind and solar that get the subsidies.

            I talked to a guy who works in the finance dept of our Bruce Nuclear Power plant. They use just 3.3 cents to pay for their power costs, the remaining 2.2 cents goes for insurance.

            You refer to pebble bed, thorium etc. It seems that most nuclear power research has shifted to China and India. Thorium was originally conceived in the Oakridge Research Center in the US but they backed away from it for political reasons. China has taken the Oakridge research and are developing it themselves. If they can get it to work, then the world will have unlimited, safe and cheap nuclear power licensed from China (see http://topdocumentaryfilms.com/thorium-dream/

            Here is a reference that you might look at: “An Influential Global Voice Warns of Runaway Emissions” http://e360.yale.edu/feature/an_influential_global_voice_warns_of_runaway_emissions/2537/ )

          • Wind and gas are very close in price. Solar is dropping into that price range very quickly.

            We also have reactors we built years back and are now paid off. They produce electricity for a nickel or so. Thing is, there’s no way to go back in time and build more and pay them off.

            Furthermore, reactors producing at about a nickel are very close to going bankrupt. Between one fourth and one half of our nuclear fleet is only one significant repair from closing. We’ve had four close so far this year because they couldn’t produce electricity cheap enough to sell.

            That 2.2 cent insurance policy won’t cover it if you melt one down and take out part of one of your cities. Japan got lucky that the ones they melted were located in a rural area.

            Apparently you didn’t consider the question I ask. Sure, we’ve built a thorium reactor before.

            Now, why has a deep pocket corporation built one and made money operating it?

            Thorium reactors won’t be any cheaper to build. It’s the construction cost and interest that makes nuclear to expensive to be considered. Not the fuel cost.

            I’m glad you realize that we need to move fast on greenhouse gas. Obviously it takes too long to build a new reactor. We can get wind on line in months and solar on line in weeks in large amounts.

          • China built a pebble bed reactor.

            It didn’t work.

          • I have my doubts about Thorium too.

            But it is scary that the research on next generation nuclear is being done in China largely by American, European and Canadian companies.
            If any of their ideas work, then those same companies will be selling their designs back to us with license fees from China.

        • It’s easy to make power cheaply when you don’t have to account for insurance because the government covers it and you don’t have to account for billions of dollars of decommissioning costs and thousands of years of spent fuel storage. The actual cost if all,of those costs were included is closer to 40c/Kwh for Nuclear power.

          • Rob:
            Could you tell me where your numbers come from.
            In our experience in Ontario, the spent fuel rods take up very little space and are not a significant disposal problem.
            The major disposal problem is the uniforms and tools that the workers had to carry near the reactor and eventually their count gets too high. These things are all compacted and do become a storage problem because nobody wants a storage site in their area.

            We are very close to solving that problem and it will be paid by the power companies without any increase in their bill.
            We really need to get the system I mentioned earlier to work as being tested in Scotland. They hope to be able to burn spent plutonium from other reactors and have zero radioactivity with the spent fuel.

    • Nuclear won’t be built in Australia. Grid storage at the moment very roughly costs about 5 cents a kilowatt-hour and is getting cheaper. With a 5% discount rate Australia’s newest wind farm produces electricity for about 6 cents a kilowatt-hour. So wind plus storage right now costs about 11 cents a kilowatt-hour which is 4 cents a kilowatt-hour less than the asking price of new nuclear in the UK before the full (and very high) cost of insurance is included. Burning natural gas at current Australian prices and then removing the CO2 from the atmosphere agriculturally is also about 11 cents a kilowatt-hour at current prices. And the economics of rooftop solar and home and business energy storage are even better than grid storage thanks to Australia’s high retail electricity prices.

      Then there is the fact that nuclear is a baseload power source with a very high capital cost and a very low fuel cost which makes it almost useless for filling in the gaps in demand left by cheaper energy sources. If one produces electricity from a nuclear plant only half the time it will almost double its cost.

      • Hi Ron:
        5 cents per kwh for storage is incredibly cheap. How do you do it?

        • By pumping water up a hill and using it to turn a generator when electricity is needed. The cost is very dependant upon the cost of capital and the physical characteristics of the site. But home and business energy storage should be more cost effective in Australia. A person with rooftop solar may have to pay 30 cents a kilowatt-hour for electricity from the grid but can only sell electricity to the grid for 8 cents a kilowatt-hour. This means that modern battery packs that can store electricity at under 20 cents a kilowatt-hour are a better deal for consumers than grid storage. If households receive spot prices for electricity sold to the grid home energy storage becomes even more profitable for households and businesses.

          • Ron:
            Do you have actual working “pumped hydro” at 5 cents or is this someone quoting from a lab?
            There are so many scenarios kicking around for storage yet I haven’t seen one get off the ground.
            The SmartGrid allowing 2 way metering so people can store their excess solar power in batteries and sell it to the grid may have possibilities but I don’t know of any place where this is actually working.
            Do you have working examples of home storage?

          • We have two pumped hydro systems in Australia and there are plenty more around the world. But you seem confused. You don’t seem to realise that nuclear power needs storage to meet demand. More than solar which matches demand better than nuclear here. Go read what I wrote in my first comment to you about nuclear being high capital and low fuel cost and consider what that means for trying to meet anything but baseload demand.

          • Yes, I understand that nuclear should have storage but we don’t have any in Ontario. We have Niagara Falls where we could pump water back up the falls to a reservoir but for some reason we don’t do that. Instead we sell our surplus power for 2 cents or less.
            I read your original comment about the capital costs of nuclear. Yes they are huge but the only number I look at is what do they charge and its 10 cents fully loaded.
            We can produce wind at 10 cents fully loaded but in our area, the wind blows only 30% of the time and mostly at night when we don’t need the power. I think in Australia you may have a better wind pattern.
            You may also have clearer skies for solar. We have to pay 50 cents for solar because we don’t get that much sun and the government is gradually giving up on both wind and solar because people don’t like driving by wind turbines 1 km away and solar is too expensive.

          • Mike, we’ve got 20 GW of pump-up hydro and a GW of CAES in the US that we built back when we were building nuclear. Couldn’t use nuclear without some way to move nighttime production to peak demand hours.

            Japan built even more. Quite a bit more IIRC.

            Switzerland just priced out a new pump-up system at a 6 cents/kWh storage price.

            Vanadium redox batteries are a couple pennies more expensive.

          • Thanks Bob, I will look into this.

            Our government is not driven soley on engineering. We should be doing far more storage if we want low-carbon to be effective.

  • I wonder why they assume wind will be flat at the current install rate?

    • Doesn’t make sense to me. The cost of wind is also dropping and that should accelerate installation rates.

      • I think that the reason is that it is uncertain how much potential there is for cost performance improvements on wind, where as the cost performance of solar is following exponential curve.

        Solar will be about 80 % cheaper by 2023 where as wind may be only 10–20 percent cheaper. And without proper (EV) storage, wind and solar cannot compete with coal due to intermittency. But we always need coal plants as back up to fill the blanks. And storage is today just too expensive.

        • “But we always need coal plants as back up to fill the blanks.”

          That is simply untrue. There are a number of ways to fill in around wind and solar. There’s storage, which you recognize. In addition their is hydro, biomass, biogas and load-shifting.

          “And storage is today just too expensive.”

          Wrong. Pump-up hydro is about 6c/kWh, vanadium redox batteries about 8c/kWh and it looks like EOS zinc-air batteries will be about 10c/kWh.

          The EIA projects the cost of coal with carbon capture placed in service in 2017 to be 13.6c/kWh. The cost of burning coal without carbon capture is very much higher.

          Wind is already 6c/kWh. Solar is dropping under 10c/kWh and should be at least a couple pennies lower by 2017. It’s not unreasonable to assume we would get 50% of our electricity from wind, 25% from solar and the last 25% from stored wind. I’ll use the median price of storage, 8c.

          0.5 * 5c wind + 0.25 * 10c solar + 0.25 * 13c stored wind = 9.25c/kWh.

          13.6 9.25

        • Ok then why is solar install rate constant until 2020? Is there a lock down on new PV workers also?

  • The title suggests quite a miracle, that the article doesn’t support.

    • It probably is a typo? Maybe 2040 or 2041 would be accurate?

      Neil

      • I’d say that it’s a headline writer error.

        The first sentence says “2040″.

        (I’ll send Zach a message by carrier pigeon.)

    • …with Ron’s cousin having a sprained ankle, I expect 2015 is more accurate

  • The title needs to be fixed. Not that we couldn’t do it by 2014 if we applied ourselves, but I haven’t been feeling well lately and my cousin has sprained her ankle, so it’s going to be tricky to get the job done in five months.

    • Oh man!… I was counting on you two to get this done!
      Actually, what is your hurry? Solar PV will be less than $1/W installed by the end of this decade and should be half that again in another decade or two. You don’t want to be re-installing too many systems to get more power out do you? Let your cousin have a few days off. Man, talking about a good business to be in. Keep up the good work dudes.

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