The Australian wind farm sector got a boost of confidence from a Bloomberg New Energy Finance (BNEF) analysis that showed electricity produced by the emissions-free generating technology is 14% cheaper than a new coal plant and 18% cheaper than a new gas plant.
“The perception that fossil fuels are cheap and renewables are expensive is now out of date,” Michael Liebreich, chief executive of BNEF, said in a press release. “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.”
The BNEF analysis showed electricity can be supplied from a new Australian wind farm for €61/MWh compared to €109/MWh from a new coal plant or €89/MWh from a new gas plant.
The BNEF research showed that since 2011, the cost of wind generation has fallen by 10% while 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,” the press release said.
“New gas-fired generation is expensive as the massive expansion of Australia’s liquefied natural gas (LNG) export market forces local prices upwards.”
Kobad Bhavnagri, head of clean energy research for BNEF in Australia, said it is very unlikely that new coal-fired power stations will be built in the nation.
“They are just too expensive now, compared to renewables,” Bhavnagri was quoted as saying. “Even baseload gas may struggle to compete with renewables. Australia is unlikely to require new baseload capacity until after 2020, and by this time wind and large-scale PV should be significantly cheaper than burning expensive, export-priced gas.”