Graph of the Day: Australia’s low cost wind power

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Given that the renewable energy target is going to be the subject of yet another review, and pages and pages of press speculation, commentary and, sadly, misinformation, we thought that these graphs might be useful.

They come from a report prepared by Frontier Economics for the UK government last year, which wanted to know how its support mechanisms for onshore wind energy compared with other countries. There are a couple of key factors at play – the cost of wind energy in any particular location, which can vary due to the amount of wind, construction costs, manufacturing etc, the average cost of electricity in the wholesale market, and the size of the subsidy needed to bridge that gap.

What’s interesting is that it shows that Australia has one of the lowest rates of subsidy of wind energy in the world, and one of the lowest costs of wind energy. Not surprising, given that even the government’s economic advisor, the Bureau of Resource and Energy Economics recently conceded that wind power was now competitive with new build fossil fuel plants.

This first graph shows how Australia competes on wind subsidies compared to other countries. It would largely be made up of the price of the renewable energy certificate. The first graph is calculated on different currencies and their “purchasing power parity” – or PPP – the second is based on market rates.

wind power frontier ppp

And the second …

wind power frontier market

These graphs below give an indication of the total cost of wind power, known as total support. Those countries that do not have a “market value” component are those with feed in tariffs, where the entire cost of wind energy is deemed a subsidy, which could be misleading because it merely reflects the structure of their tariffs.

But the interesting point here is that of the 26 leading wind countries assessed, Australia has the cheapest wind power based on PPP, and one of the cheapest based on market rates.

The full report can be found here.

frontier absolute wind power

fronteir absolute wind power



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  • Ronald Brakels

    I wouldn’t have expected Australia to be in front due to our higher than average interest rates for a developed country, but we do have excellent wind resources and we also have cheap land. South Australia’s largest windfarm, Snowtown II, which is under construction, is expected to operate at about 42% of capacity and is built on land where it is possible to fatten a goanna, but only gradually.