There is very big news from the land down under:
Sydney, 7 February 2013 – Unsubsidised renewable energy is now cheaper than electricity from new-build coal- and gas-fired power stations in Australia, according to new analysis from research firm Bloomberg New Energy Finance.Clean energy wins without subsidies over coal and gas. Tax carbon and the price differential is a slam dunk for renewables. The future is now, baby!
This new ranking of Australia’s energy resources is the product of BNEF’s Sydney analysis team, which comprehensively modelled the cost of generating electricity in Australia from different sources. The study shows that electricity can be supplied from a new wind farm at a cost of AUD 80/MWh (USD 83), compared to AUD 143/MWh from a new coal plant or AUD 116/MWh from a new baseload gas plant, including the cost of emissions under the Gillard government’s carbon pricing scheme. However even without a carbon price (the most efficient way to reduce economy-wide emissions) wind energy is 14% cheaper than new coal and 18% cheaper than new gas.
“The perception that fossil fuels are cheap and renewables are expensive is now out of date.”
Michael Liebreich, chief executive of Bloomberg New Energy Finance
Here are 10 reasons why this story is a very big deal.
1. Renewable energy is cost-effective now.
Australia shows rapid maturation of renewable energy technologies. With wind and solar power in their infancy, there have been many design and cost challenges to overcome to become competitive with fossil fuels. Those barriers are rapidly being broken. The narrative that we cannot afford to transition to renewables like wind and solar will quickly flip to we cannot afford not make the transition.
2. Wind power has been impressive but solar is coming on strong
Wind power is already proving to be cost effective in the Australian energy market, but solar and other renewables are not far behind.
BNEF’s analysts conclude that by 2020, large-scale solar PV will also be cheaper than coal and gas, when carbon prices are factored in. By 2030, dispatchable renewable generating technologies such as biomass and solar thermal could also be cost-competitive.That is also true in the United States. Here is an analysis from Duke Energy:
The U.S. will add more solar power in 2013 than wind energy for the first time as wind projects slump and cheap panels spur demand for photovoltaic systems, according to the head of Duke Energy Corp. (DUK)’s renewable-energy development unit.The problem for wind has been the uncertainty over production tax credits, particularly in the face of obscene incentives and tax breaks for fossil fuels.
The U.S. may install 3 gigawatts to 4 gigawatts of wind turbines this year, and solar projects will probably exceed that, said Gregory Wolf, president of Duke Energy Renewables. The U.S. added 13.1 gigawatts of wind power last year, beating natural gas for the first time.
3. Carbon pricing is critical to expedite the transition to clean energy
Australia shows the importance of leveling the energy playing field by pricing carbon. Even without a carbon tax, renewables are competitive. With a carbon tax, the game is over.
Fossil fuels have many hidden costs. They are heavily subsidized with production incentives and a bevy of special tax breaks. The external costs of extraction-related environmental destruction and combustion-related pollution are paid by society rather than the industry. These factors distort the cost of fossil fuels. To level the playing field, we need to remove all price supports for fossil fuels and tax carbon for the external costs of fossil fuels.
4. The effects of climate change have already been devastating in Australia
As noted by Weather Underground, extreme weather has been the big story in Australia in January. Extreme heat. Wildfires. Tropical storm flooding.
The biggest weather story in the world this past January was the amazing heat wave that engulfed Australia. As a special statement issued by the Australian Bureau of Meteorology put it;Here are recent record high temperatures in Australia:
"An exceptionally extensive and long-lived heat wave affected large portions of Australia in late December 2012 and the first weeks of January 2013. Whilst the heat was most extreme and persistent in the central and southern interior of the continent, most of Australia experienced extreme heat at some stage during the event.
The recent heat was notable for the extent, with records set in every State and Territory, and the nationally averaged daily temperature rose to levels never previously observed, and did this for an extended period. The heat wave was a major factor in January 2013 being the hottest month on record for Australia."
Many locations in Australia flirted with the 120 degree Fahrenheit mark in January.
The fossil fools are quick to say that you cannot attribute an extreme event to climate change. However, climate science models predict that these extreme events will become more frequent. Climate change increases the probability of extreme events. My dog has better grasp of probability theory than the dirty energy apologists.
5. Political leadership matters
Even conservative politicians in Australia has been more progressive on climate change than our political leaders in the United States. The Aussies have already implemented a carbon tax while our Congress continues to attack climate science.
6. Australia is a major coal production country
According to the Australian government, coal from Australia accounts for 30% of the world's market. The cost effectiveness of renewable energy in Australia will open eyes in Asia, the primary market for Australian coal. The faster the transition to renewables, the more coal will remain underground.
The coal industry in Australia is getting worried. Perhaps coal pollution in Chinese cities has already opened a few watery eyes. Give China an economic alternative and their appetite for coal will disappear.
7. Production costs are dropping for renewable energy and rising for fossil fuels
Production costs for renewable energy sources are falling, reflecting increasing demand, manufacturing efficiency, and technological innovation. In contrast, costs for new generation coal and gas plants are rising. These patterns are clearly evident in Australia where the production costs for renewables have fallen 10-29% in recent years while costs for new coal and gas plants have skyrocketed. Banks are becoming reluctant to finance new fossil fuel plant construction.
The same is true in the United States. The EPA has even set up a program to track costs so policy makers with integrity will have more than lobbyists and industry think tank propaganda to base decisions.
The production cost equation is shifting worldwide according to the International Energy Agency.
The renewable energy sector is demonstrating its capacity to deliver cost reductions, provided that appropriate policy frameworks are in place and enacted. Deployment is expanding rapidly. Non-hydro renewables, such as wind and solar PV, are increasing at double-digit annual growth rates. Costs have been decreasing and a portfolio of renewable energy technologies is becoming cost-competitive in an increasingly broad range of circumstances. Established technologies such as hydro and geothermal are often fully competitive. Where resources are favourable, technologies such as onshore wind are almost competitive. However, economic barriers remain important in many cases. In general, costs need to be reduced further. Moreover, fossil fuel subsidies and the lack of a global price on carbon are significant barriers to the competitiveness of renewables.8. Imported Australian hot air is killing us
We cannot have a serious conversation about climate change and clean energy in America because of an Australian expatriate media mogul.
An analysis of Fox News’ coverage of climate change between January and July of 2012 found that ninety-three percent of the station’s coverage was misleading, and a similar analysis for the Wall Street Journal found that it was misleading in its coverage of climate science eighty-one percent of the time. For both Fox News and the Wall Street Journal, misleading comments dismissed the scientific consensus that climate change was occurring or that it was human-caused.9. Spread the word
We need the good news about renewable energy in Australia to go viral.
10. One small STEP for the future of life on the planet
We need to kill Subsidies and tax breaks for fossil fuels. Just say no to welfare for the wealthiest corporations in history.
We need to Tax carbon consumption, not to mention demand the fossil fuels industry pay to remediate damage from past, present, and future extraction.
We need to Educate the population about climate change and why they should get behind the transition to clean energy.
We need Political leadership and action.
Fossil fuels are not cool. Clean energy rocks.