Storage Renewables – Australia

Australian utility AGL Energy wants the Australian government to neither extend the life of aging thermal coal power plants nor build new ones. While AGL  agreed to a request from Prime Minister Malcolm Turnbull to extend the life of 1900 MW Liddell coal-fired power plant beyond 2022, it thinks that it can substitute the power capacity from new solar and wind power plants with associated balancing and reliability infrastructure using storage and other means.

AGL Energy thinks that for $250 billion, it can meet the future power needs of the Australian economy – it will spend $150 billion on building new renewable energy power plants and spend another $100 billion on storage and firming up capacity.

Also, read Tesla’s Solar Plus Storage Power Plant in Hawaii

The Australian government wants coal to remain the mainstay of power production as energy prices have gone up in recent days. However, it is also under pressure from the international community to keep up its carbon promises. AGL has come around to the view that rapidly falling prices of renewable energy as well as storage batteries makes it economically feasible to replace the coal capacity, even without considering any future impact of carbon penalties on coal and fossil fuel generation.

The vast majority of coal power plants have an age of more than 35 years and extending their life is going to cost a bomb. It may simply be cheaper to build new solar and wind plants rather than making these coal power plants run for a long time.

As per the AGL estimates, it will cost AUD $ 55/ MWh to install commercial wind farms, with another $ 25/ MWh for “firming” capacity while new thermal coal power plants will cost almost 30%-60% more at AUD $ 100-$130 MWh. In the 7-8 years, it will take to build these coal power plants, the cost of solar and wind farms could come down by another 30%-40% making the new coal power plants even less competitive than what they are now.

Renewable plus storage is an unstoppable force and governments are being foolish and short sighted in not making more investment in this area. Coal has itself gone past by its use by date and has become more expensive even without considering the considerable societal and environment costs it imposes due to coal mining, transport and coal burning. Australia will be smart in choosing AGL’s prescription on the future of power using storage renewables in our view.

Read about Solar+Storage in India.