Are wind and solar cheaper? Yes, because they are often free.
In AEMO bid stack, which energy providers offer to cover at a price, wind and solar often bid zero.
The question any energy sceptic needs to ask is which energy provider sets the marginal price.
That is, who makes the last and highest bid that sets the price for all providers?
Here are the proportions.
| Fuel type | Approx. share of dispatch intervals as marginal price setter |
|---|---|
| Hydro | 34–36% |
| Black coal | 22–30% |
| Gas | 10–15% |
| Battery (discharging) | 5–8% (rapidly increasing) |
| Brown coal | 5–7% |
| Wind | 5–8% |
| Grid-scale solar | 3–6% |
| Battery charging (load) | 2–4% |
| Other | <2% |
Here is CSIRO’s latest SLCOE, which includes distribution cost.
| ank | Technology | Relative cost to consumers |
|---|---|---|
| 1 | Existing hydro | Lowest |
| 2 | Existing black coal | Very low (largely depreciated assets) |
| 3 | Existing brown coal | Low (although emissions are highest) |
| 4 | Onshore wind (good resource) | Low |
| 5 | Utility solar PV | Low–moderate |
| 6 | Wind + batteries (firmed renewables) | Moderate |
| 7 | Existing combined-cycle gas | Moderate–high (fuel-price dependent) |
| 8 | Open-cycle gas peakers | High |
| 9 | New black coal | Very high |
| 10 | Nuclear | Very high (in Australia, based on current assumptions) |
And finally, the technology-versus-commodity curves clearly show a trend toward higher fossil fuel output costs and lower renewable output costs.
By 2050, Australia has two choices. Most of our 18 coal-fired power stations will need to be replaced. The fleet is old, and most of it is past or fast approaching its 50-year lifespan.
| Rank | Power Station | State | Coal Type | First Unit Commissioned | Approx. Age (2026) | Capacity (MW) |
|---|---|---|---|---|---|---|
| 1 | Yallourn | VIC | Brown | 1973 | 53 yrs | 1,480 |
| 2 | Gladstone | QLD | Black | 1976 | 50 yrs | 1,680 |
| 3 | Vales Point B | NSW | Black | 1978 | 48 yrs | 1,320 |
| 4 | Muja D | WA | Black | 1981 | 45 yrs | 854 |
| 5 | Bayswater | NSW | Black | 1982 | 44 yrs | 2,640 |
| 6 | Eraring | NSW | Black | 1982 | 44 yrs | 2,880 |
| 7 | Loy Yang A | VIC | Brown | 1984 | 42 yrs | 2,210 |
| 8 | Tarong | QLD | Black | 1984 | 42 yrs | 1,400 |
| 9 | Callide B | QLD | Black | 1988 | 38 yrs | 700 |
| 10 | Mt Piper | NSW | Black | 1993 | 33 yrs | 1,400 |
| 11 | Stanwell | QLD | Black | 1993 | 33 yrs | 1,460 |
| 12 | Loy Yang B | VIC | Brown | 1993 | 33 yrs | 1,070 |
| 13 | Collie | WA | Black | 1999 | 27 yrs | 340 |
| 14 | Callide C | QLD | Black | 2001 | 25 yrs | 840* |
| 15 | Millmerran | QLD | Black | 2002 | 24 yrs | 852 |
| 16 | Tarong North | QLD | Black | 2002 | 24 yrs | 443 |
| 17 | Kogan Creek | QLD | Black | 2007 | 19 yrs | 750 |
| 18 | Bluewaters 1 | WA | Black | 2009 | 17 yrs | 208 |
| 19 | Bluewaters 2 | WA | Black | 2010 | 16 yrs | 208 |
LVO suggests replacing them with 23 supercritical models at 1000MW, $6bn apiece, which would take many years longer to complete (about ten years each). That is why new black coal is so expensive: its high recovery cost is worsened by the fact that it is profitable only for part of the day (when it can compete while wind and solar are down), meaning fat subsidies to keep it afloat.
Or we can rebuild a clean and profitable grid (also with some subsidies in the absence of carbon price) in which renewable storage and cheap gas drive down the marginal price setter’s cost, firmed by ever-cheaper batteries (often decentralised) and by cheap gas (which is why I focus so much on domestic reservation), and radically reduce our carbon footprint as a bonus.
That’s your power bill. What about your transport bill?
The day is coming when you will no longer need a car. Or you may want one and let it earn you money by operating it as a taxi when you do not use it. For instance, you could let it operate as a taxi while you’re at work or asleep. Electric robotaxis will dominate the roads, and we will need only one-third as many as a result, decongesting our cities. Do you want to cut your annual travel bill by two-thirds or have a coal car that costs more than it does today?
Conversion of the grid to renewables is a cost-effective, carbon-neutral, and progressive no-brainer for consumers.
It’s no wonder Ken Henry is so pissed.
In a keynote speech to the Clean Energy Council to be delivered on Wednesday, Henry says the same “second-rate partisans with first-rate egos” who led Australia to junk a price on carbon – which he describes as “the world’s most economically and scientifically rational climate policy” – are at it again.
