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Power prices will be lower if NSW shoots for 100% clean-energy grid by 2030, report shows

Leading energy research company, RepuTex, has found transitioning the NSW to 100% clean energy by 2030 would deliver consistently lower wholesale power prices than business-as-usual. [1] 

RepuTex found that under the current approach to the energy transition, where the last coal-fired power station closes around 2045, wholesale prices would range between $50MWh and $80MWh over the next decade. 

This was substantially more than $47/MWh to $60/MWh range forecast if NSW transitions more quickly to 100% renewables, where the last coal-fired power station closes in 2030. 

“This report clearly shows that it is technically feasible to make the NSW electricity sector 100% renewable by 2030,” Nature Conservation Council Chief Executive Chris Gambian said. 

“It also shows that we can do it without affecting power prices or reliability. 

“As we have seen over the past few weeks, renewables have put huge downward pressure on electricity prices and the profitability of companies that run the coal-fired power stations. [2] 

“That pressure will remain until the last coal station closes. It’s no longer a matter of whether this transition will occur, but how fast. 

“The big missing piece is a transition plan for coal communities like those at Lithgow, on the Central Coast and in the Hunter. 

“Governments and the major political parties have completely failed these communities. They have told them fairytales of coal forever and failed to plan the real future that is coming faster than anyone imagined. 

“The report also shows the importance of installing big batteries and completing transmission lines on time to ensure that reliability and low prices is maintained as all five coal-fired power stations retire.”  

KEY FINDINGS 

RE100 is technically feasible. 

  • Transitioning to RE100 is possible using existing technologies if there is sufficient investment. 
  • Renewable energy generation must grow six-fold from 12 TWh in 2019-20 to 72 TWh in 2030. 
  • Variable renewable energy capacity must grow by 24 GW from roughly 8 GW in 2019-20 to 32 GW in 2030. This requires addition of: 
    • 6,000 MW of distributed PV, and 
    • 18,000 MW of large-scale wind and solar 
  • Storage must grow by over 10,000 MW, including: 
    • Almost 8,000 MW of dispatchable storage (including snowy 2.0). 
    • Almost 3,000 MW of behind-the-meter batteries.  

RE100 would be cost-neutral for consumers. 

  • Short-term annual average wholesale electricity prices are forecast to be below business-as-usual levels. 
  • Average prices will range between a high of $60/MWh after the closure of Liddell in 2023 to a low of $47/MWh as transmission projects fully connect Snowy 2.0, expand the Queensland interconnection and open a new Renewable Energy Zone in New England.  

Barriers to be overcome. 

  • Continuing to attract investment in renewable generation and clean flexible capacity; 
  • Coordinating the phase-out of coal-fired generation with VRE integration and transmission upgrades to maintain supply during the transition. 
  • Developing transmission infrastructure at a pace matching the development of new VRE and storage. 

Policy and investment settings 

New policy and investment settings will be required to overcome the identified barriers, including: 

  • expanded investment targets for clean energy and storage,  
  • a co-ordinated, orderly phase-out of coal-fired facilities, 
  • additional priority transmission infrastructure, and 
  • implementation of the recently legislated Energy Security Target   

References 

[1] Cost and reliability analysis of a Paris-compliant energy transition in NSW, RepuTex, 2020 

[2] Renewable energy could render five of Australia’s remaining coal plants unviable by 2025, 24-2-21, The Guardian.  

 

About RepuTex  

RepuTex is Australia's leading provider of research, pricing and advisory services for the local energy and environmental markets. 

 

MEDIA CONTACT: James Tremain | 0419 272 2

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