The observed cost of high penetration solar and wind electricity

Date

2021

Authors

Blakers, Andrew
Stocks, Matthew
Lu, Bin
Cheng, Cheng

Journal Title

Journal ISSN

Volume Title

Publisher

Pergamon Press Ltd.

Abstract

High levels of variable solar and wind must be balanced with alternative generation, storage, transmission and demand management to ensure continuous availability of electricity. The cost of balancing has been disputed, which militates against mass deployment of solar and wind to mitigate climate change. Australia is installing solar and wind 10 times faster than the global per capita average which constitutes a natural experiment in the real cost of balancing. The National Electricity Market (NEM) and the state of South Australia have reached combined solar and wind energy penetrations of 24% and 70% respectively and are tracking towards 40% and 100% respectively in 2024–25. Investment in new balancing infrastructure is predominantly in pumped hydro (without new dams on rivers), batteries and transmission. The current (2021) and market futures (2024) spot price for electricity in the NEM and South Australia is about AUD$40 (∼US$30) per Megawatt-hour. This suggests that the balancing cost of high levels of solar and wind is modest.

Description

Keywords

Solar photovoltaics, Wind energy, Storage, Transmission, Market penetration, 100% Renewable energy

Citation

Source

Energy

Type

Journal article

Book Title

Entity type

Access Statement

License Rights

Restricted until

2099-12-31