Engineers warn of bill shock under green energy surge
Electricity bills will soar and gas and coal-fired power stations will close if the share of wind and solar generation increases dramatically, engineers have warned after analysing the nation’s energy supply.
The analysis casts doubt on Labor’s claim that a 50 per cent renewable energy target — the centrepiece of the opposition’s climate change policy — would reduce electricity prices.
It found bills were likely to soar 84 per cent, or about $1400 a year, for the typical household, if wind and solar power supplied 55 per cent of the national electricity market.
The analysis by a group of veteran engineers — written and funded by five mechanical, chemical, electrical and nuclear engineers, with decades of experience in the power industry — was sent to premiers, federal cabinet ministers and shadow cabinet late last month.
It contrasted the costs of supplying electricity in the national electricity market under different mixes of generation. This included the Australian Energy Market Operator forecast for the year 2040 of 65 per cent renewable energy including hydro, as well as five other scenarios, including replacing coal-fired or gas generation with nuclear power.
The AEMO scenario, the closest to Labor’s policy, would lead to retail electricity prices rising by 84 per cent to 39c per kilowatt-hour — adding $1374 to the average household’s 2017 electricity bill based on the competition regulator’s June report into the electricity market.
Robert Barr, an electrical engineer and academic at University of Wollongong, said “in practical terms what would happen is the coal and open-cycle gas stations would go broke long before we reached this situation”.
Co-author Barry Murphy, former managing director and chairman of Caltex Australia, said the scenarios with high levels of renewable energy could force coal-fired power stations to be turned on and off at irregular intervals, or spin their turbines uselessly, “which isn’t economic so they would shut down”.
Labor in government would ensure at least 50 per cent of the nation’s electricity was sourced from renewable energy by 2030.
The new figures emerged as Scott Morrison moved to shift the emphasis of Coalition energy policy away from reducing emissions to cutting prices and shoring up reliability. In Cairns yesterday, the Prime Minister criticised NSW and Victorian governments for restricting gas exploration.
“We have to be prepared to use all the resources we have available to get electricity prices down,” he said. “They’re achieving that in Texa