Australia unlikely to build new coal-power stations
AUSTRALIA is unlikely to build new coal-fired power stations because of tumbling prices for renewable energy and the rising cost of finance for emission-intensive fuels, according to research by Bloomberg New Energy Finance.
Even without a carbon price, wind energy is now 14 per cent cheaper than a new baseload coal-fired power station and 18 per cent cheaper than a new gas one, Bloomberg New Energy Finance said.
The gap widens further when the carbon tax is added. Wind farms can now generate electricity at $80 per megawatt hour, compared with $143 per MWh for a new coal power station and $116 for a new baseload gas power station.
In Western Australia, large-scale photovoltaic (PV) power stations are already cheaper than new coal-fired generating capacity, BNEF said. "It's very unlikely that new coal [power stations] would be built in Australia," said Kobad Bhavnagri, head of clean energy research for BNEF in Australia.
Aside from the carbon tax - which the Coalition has vowed to scrap if it wins the September 14 election - reputational and other risks associated with coal means developers will struggle to obtain low-cost funding for any new venture. The research included a survey of the country's big four banks.
"Financing for coal would be made very expensive because of all the risks involved," Mr Bhavnagri said.
BNEF estimates the cost of wind generation has fallen by 10 per cent and the cost of solar PV by 29 per cent since 2011, and further technology advances will drive prices lower.
By 2020, wind power's cost per MWh will drop to $70 and then to $66 by 2030. The cost of large-scale solar PVs will drop to $97 for an equivalent amount of electricity and then to $87 10 years later, Mr Bhavnagri said.
The presumed advantage of gas, including its relatively low carbon emissions compared with coal, have been largely nullified by the liquid natural gas export boom, which will force prices for the fuel higher.
Demand for power, meanwhile, continues to trend lower, with use in New South Wales at 10-year lows and Victoria at eight-year lows for this time of year, according to data for the December-January period, said Mike Sandiford, director of the Melbourne Energy Institute.
Electricity demand in the National Electricity Market is running about 16 per cent short of the amount regulators in the middle of the last decade expected current levels to be.
"Nobody in their right mind would be building coal-fired power plants now," Professor Sandiford said.