Economic factors alone could lead to Australia sourcing 86% of its electricity from solar and wind generation by 2050, according to research conducted by Bloomberg New Energy Finance (BNEF).
Anti-pollution and carbon emissions policy will not affect the uptake of renewable energy sources as much as those sources becoming a cheaper alternative to traditional non-renewable generation methods.
BNEF representative Seb Henbest said that the change is expected because wind and solar generation is already the cheapest source of large-scale new generation and is set to undercut the cost of existing fossil fuel power plants as well.
“This is not a prediction based on policy, just economics,” Henbest said this week.
Despite such a system requiring energy curtailment – which is the reduction of some types of generation within a grid to maintain balance, coupled with sizeable energy storage capability that would be needed – the research found that even with these extra issues, wind and solar would still be the cheapest option.
Henbest said that such a transition in Australia would be part of a wider global movement. However, Australia’s abundance of solar and wind resources would place it as a leader in the sector. He said that mass production of wind and solar energy would mean the way the grid is run would need a re-think.
Henbest said: “Back-up and curtailment will be a feature, not a bug, of the future energy system. If you have lots of wind and solar, dispatch is no longer as predictable, it’s not as straight forward as in a world where generators are running almost at the same output all the time.”
The nature of wind and solar energy production is that sometimes there will be a surplus of energy produced, raising the need for storage and curtailment. Other times there will be a deficit in the energy being generated which means there will be a need to divert supply from either stored energy or back-up generation, most likely gas power plants.
This new way of thinking about the grid is a major obstacle to the adoption of wind and solar power by governments, with political debate showing conservatives are attached to the idea of building new coal generators. This week the Australian Competition and Consumer Commission released a report into the energy sector, terming it broken and saying that it needs a ‘reset’.
Another option might be for governments to subsidise small-scale generation companies, similar to a trial being undertaken in Queensland.
Henbest recognised the small-scale option, pointing out that Australia has a large capacity for electricity production and storage ‘behind the meter’, with the generation equipment owned by homeowners and businesses and up to 40% of electricity being generated at the point of consumption.
The BNEF predicts that no coal and just a small amount of gas generation will be taking place by 2050.
Henbest went on to say that policy intervention is needed in order to map out how the system of the future will look and regulations will need to be created. He said: “Do we need incentives for solar because they are expensive? No. Do we need to provide a signal that recognises value to solar? Yes, we do. Same with batteries. This is a global technology shift – and it will happen,’ he said.