Labor: More renewables will lower power prices

Via the AFR:

Labor says the certainty created by having an energy policy and the falling cost of renewable energy means emissions can be cut and prices lowered at the same time.

Speaking ahead of the launch of Labor’s energy policy on Thursday, shadow climate change and energy minster Mark Butler said asking people to choose between price and emissions reduction was an “utterly false choice”.

“We’ve known for years now that building new renewables puts downward pressure on power prices,” he told a low carbon forum in Adelaide on Monday.

Not in Australia’s case. Renewables are inescapably intermittent. That means you need back-up, dispatchable power when they are running low or off. As coal exits that means more gas-fired generation as the marginal price setter:

Until power storage can displace gas en masse, gas base load and peaking power will be the marginal price setter for electricity.

In other words, Labor can decarbonise via renewables but it can’t lower power prices if it does not force the east coast gas cartel to drop its gas prices. If it does not do so then its renewables push will be blamed for higher prices.


  1. Austalia is vast enough that wiht a solar farm in the pilbara and 1 of R2M’s magic HVDC connectors bact to the east, the majority of daytime electricity can be free
    its curently free in qld about noon as supply exceed demand
    what happened to all that solar thermal that was going to save the day. for overnight supply??
    gas, soon will be too expensive to waste on generating electricity
    Now those cunning chinee, with fusion, what is the story on that

  2. So the optimum solution is non-fracked domestic gas sourced by a partnership between state & private sectors “Norway model” enterprise that supplies power when & when renewables cannot and also finances renewables?

      • Not here??
        RCR Tomlinson has been hit with a class action lawsuit following a $57 million write-down on two Queensland solar farm projects .Quinn Emanuel partner Damian Scattini said it was “unlikely” the write-down announced by RCR in late August was a surprise to its management team.
        RCR went into a trading halt on July 30 that lasted a month.
        On August 28 it reported a $57 million write-down on its Daydream and Hayman solar farm projects in Queensland and launched a $100 million capital raising at $1 a share.
        When its shares re-opened for trading on August 30, RCR’s stock price fell by more than 60%, dropping from $ $1.05

  3. It is going to be Fracked gas all the way.
    this from the Commonwealth Govt.
    “The Rapid Regional Prioritisation for Tight and Shale Gas Potential of Eastern and Northern Australian Basins July 2018”
    Sorry link didn’t work

    Remember that Labor in NSW legislated the Petroleum (Onshore) Exploration Act that was used to grant licences to Frackers.
    This legislation steered thru the parliament by Eddie Obeid and Ian MacDonald was a licence to steal farmers land without compensation, which gave rise to the Lock the Gate movement.

  4. Methane is a non-renewable fossil fuel that by definition we’re going to run out of one day if we keep using it. Methane is not the answer.

    Electricity has never been as cheap to produce in the history of humankind as it is today with wind and solar PV. The first step is to build more of it.

    Once more is built (assuming we’re relying on market mechanisms), we will get power surpluses more often which will drive down the price of energy at those times to very cheap – possibly zero as the coal-fired power stations would rather pay people to take their power than turn their generators down.

    And once there are reliably frequent times that the energy price is near zero (for example, every time a cold front passes through SE Australia), then the business model for energy storage and regeneration will become a winner. Then just like the tree kangaroo, grid-scale energy storage will happen.

    • U guys are the biggest hippo crits
      u have the hole of the west coast of your joint suitable for wind turbines
      yet not 1 has been installed
      rather hang aground in launceston and pontificate.
      u could easily supply all of victoria.

      • Tassie TomMEMBER

        I’m not disagreeing with you there, although when the transmission infrastructure costs more than the generation infrastructure you’ve got a problem.

        There is supposed to be a little bit of wind going up in the next few years – mostly outsourced to the Chinese Communist Party of course.

  5. reusachtigeMEMBER

    The only thing that will lower power prices is new coal fired power stations as we have a competitive advantage in coal. Get on with it already!

    • I did find this, and I doubt his views have changed:

      A gallon of gasoline has at least 400 hours of labor equivalent. It means that ordinary middle-class people have the power that only kings used to have in the distant past. And what that has done, that incredible gift of accumulated power over millions of years is to catapult us forward in terms of civilization, in terms of culture and science. It’s created an enormous economic surplus with which we could do these things for the first time in history. And above all agriculture has benefited allowing our population to surge forward.

      The sting in this tale however is that this has left us with 7.5 billion people going on 11 or so billion by 2100. And that can only be sustained by continued heavy, heavy use of energy. Fossil fuels will either run out, destroy the planet, or both. The only possible way to avoid this outcome is rapid and complete decarbonization of our economy. Needless to say, this is an extremely difficult thing to pull off. It needs the best of our talents and innovation, which almost miraculously, it may be getting. It also needs much better than normal long-term planning and leadership, which it most decidedly is not getting yet. Homo sapiens can easily handle this problem, in practice; it will be a closely run race, the race of our lives. I like to say never underestimate technology and never underestimate the ability of Homo sapiens to screw it up.

      more here:

  6. So given renewables are now the most cost effective option for electricity generation (i.e. they put ‘downward pressure’ on current prices), I assume Labor will be removing renewable energy subsidies (e.g. the RET)? Doesn’t make sense to subsidise something the profit-driven free market will build of its own accord, right?

    • Even better, they are going to remove the VAST subsidies fossil fuels get, mostly in the form of unpaid externalised costs. Carbon tax!

  7. I suspect these graphs are exceedingly misleading:
    How much Hydro is really dependent on rain / snow filling our dams?
    How much Hydro power is derived from the process of temporarily storing power by transferring water from a position of lower potential energy to a position of higher potential energy? (i.e. using cheaply priced Coal generated electricity that enables Hydro to reap the benefits of supplying expensive electricity during Peak periods)

    • using cheaply priced Coal generated electricity that enables Hydro to reap the benefits of supplying expensive electricity during Peak periods

      You can do the same with renewable energy, so what’s your point, Mr Astro?

  8. Having 100% renewable at the cost lower than current prices is not a technical or economic question but political. Three small lakes 2sqkm 20-30m deep on 200-300m high cliffs near the coast (e.g. near Coalcliff in NSW or Commissariat point in SA) could supply all eastern seaboard for weeks. Technology for seawater pump storage has been proven, cost of construction would be low compared to alternatives even if maximum safety and environmental measures used (double watertight walls and bottoms, double embankment etc). Solar could be used to fill these lakes with seawater that can be used to generate during nights or or few cloudy days. Cost of these storage facilities would be a quarter of cost of battery storage or nuclear and half the cost of new coal plants and would last 100 years with not so much maintenance.

    Around $100b would make it possible for Australia to be 100% renewable – amount that gets lost or gained in a single trading day on ASX.

    • good point about ASX volatility vs the cost of a fix. for our collective power needs .
      It’s a no brainer …maybe that’s why we need to study every other possible alternative before we find the obvious solution.

  9. Re the cost of gas and its influence on prices. Fundamentally you have to basically have a whole generating capacity on standby. There are enormous costs, including capital costs, in just maintaining the turbines in readiness even when not in use. Batteries are devilishly expensive and have a very limited capacity in terms of base load power. That is not their real purpose. The scattered infrastructure for renewables is also expensive. Both these problems and costs are conveniently left out of costings by the religious. More renewables does NOT drive down the price.
    Saying renewables are cheaper than fuel generators is like comparing sugar to steak.