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Finkel plan good for coal, not great for wind or solar

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Chief scientist Alan Finkel’s plans for Australia’s energy future – and a new mechanism called a “clean energy target” – appears to throw a lifeline to the Australian coal generation industry, but basically throws the gas generation sector to the wolves.

Modelling done by the Finkel review actually shows the share of coal generation would be double that than would occur under “business as usual”. The gas generation industry is devastated, at least compared to business as usual.

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Under the scenario, coal fired generation is still providing one quarter of Australia’s electricity generation by 2050, with the Finkel Review only contemplating the Coalition target of reaching zero emissions by 2050.

That is more than business as usual (19 per cent) and  implies that some coal generation will continue to operate past their current use by date.

Indeed, the modelling for the Finkel Review says renewable energy will account for 42 per cent of total generation, but this includes the 9 per cent from rooftop solar. Large scale renewable energy will increase to only 33 per cent over the decade to 2030 from around 23.5 per cent in 2020, when the renewable energy target is met..

By 2050, the modelling suggests, large scale renewables will rise to 62 per cent, with another 11 per cent from rooftop solar, suggesting some sort of slow down in the share of rooftop capacity.

It contrasts sharply with the predictions of the CSIRO, which saw nearly half of all generation from rooftop solar by that time, and more than 90 per cent overall from renewable energy.

Environment Victoria says the suggestion that there will be no significant decrease in output from brown coal generators before 2030 is fanciful. “Yallourn and the Loy Yang power stations are the dirtiest power stations in the country and can’t keep polluting indefinitely,” it says.
Another interesting point is that the modelling suggest that under a CET as currently modelled large  scale solar will only provide half the output of the wind industry, which might surprise many.

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This is despite the fact that Finkel’s own conclusions are that wind and solar are by far the cheapest new technologies, and even with storage or “firming costs” comfortably beat gas generation. Brown coal is just competitive with solar, but this does not include carbon or environmental costs.

 

“The Panel notes that, even since the Review started, utility scale batteries, wind and solar photovoltaic have declined in cost substantially more than expected,” it says, noting the Origin Energy deal on the Stockyard Hill Wind Farm (about $55/MWh) and the AGL assessment that a new wind farm supported by existing gas peaking generation (through a “firming cost’) to now be cheaper than new baseload gas at a $8/GJ price, and a new solar farm supported by gas peaking generation would also be cheaper than new CCGT at a gas price of $12/GJ.

 

 

 

  

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  • coreidae

    Well hopefully the ALP will throw this out when they win power and implement the carbon price so necessary.

    • Hayden

      Finkle finkle little star, now we see how bright you are.

      This long awaited report is a nonsense.

    • Joe

      We already have a defacto carbon tax via Abbott’s / Turnbull’s ‘Direct Action’ nonsense. Our $Billions of taxes are paid to the polluters instead of polluters paying, to reduce their emissions. Let’s finally get real and bring in a fair dinkum price on carbon. That will sort out Big Coal and Big Gas which won’t block RE anymore.

      • coreidae

        While I agree, they are going to resist very strongly. It is an existential threat!

  • brucelee

    So many ifs and buts. Rather than doing the work and presenting comprehensive options he keeps it narrow and passes the onus to others to do it. Dismayed

  • wmh

    The Fink has done his masters’ bidding. It won’t affect me as next year I will be 95% PV powered.

    • Me too, once battery prices make domestic storage viable.

      • wmh

        Home space heating and domestic hot water make up 60% domestic energy use (Ausgrid figure). I will be storing heating energy as heat in tanks of hot water which halves my battery cost.

    • solarguy

      Ah, but yes it effect you. Every time you go to the supermarket, butcher, any business really, the price will go up, because they have to pass on their running costs!

  • Chris Fraser

    Given the plunging cost of solar and soon storage, I am having trouble understanding why the contribution of solar in 2050 is so low. Households alone will be almost self-dependent, commercial premises almost the same. And all of it driven by market forces not concern for climate safety. Clearly, a political agenda has interfered with the report.

    • solarguy

      My home is already is self-dependent I have hardly used grid power since the 14/4/17 and only in the last 72hrs, so 2050 is a big joke. The Chief Scientist has sold out to the dark side big time. How can he look himself in the mirror, knowing his credibility is forever stained because of this utter rubbish.

  • Gnällgubben

    When you see how the price of renewables and storage are developing, how can you come to any other conclusion than those technologies will completely dominate before too long?
    This report doesn’t make any sense, especially since Australia has such amazing solar resources that could easily be tapped.

  • Peter F

    Giles
    It is not really a plan, it is a prediction. Almost all the increase in the demand on the NEM has been due to the gas industry in Queensland. If, as one commentator predicted, one of these plants closes in the next three years that is about 1% of national demand. Aluminium smelters may hang on but they can’t compete long term with plants in Iceland Norway, Canada and China which have cheap hydro so within the decade we will lose another 10TWhr there and in the rest of industry energy efficiency, self generation and behind the meter storage march on reducing grid demand by about 2-4TWhr per year. By 2030 grid demand will fall by 35-50TWhr. Some of that will come out of gas almost all will be from coal. That is the equivalent of about 35% of the existing coal fleet.
    Regardless of the RET once coal plant utilisation falls below 30-35% they will close. Each time a coal plant closes, prices will kick up a bit, drawing more renewables into the market either behind or in front of the meter which further imperils the next plant and so on it will go. Here is a bold prediction, by the time I make my 80th birthday in 2030, Coal will be less than 15% of Australia’s electricity production.

    Just to give some perspective. In the unlikely event that all the currently proposed wind farms in Victoria and Tasmania go ahead they will produce 15% of the entire NEM demand by 2024 or the equivalent of Victoria’s entire remaining coal fleet. Rooftop solar continuing at the current rate will produce a further 12% of grid demand

  • Ian

    Figure 3.8 clearly shows that our efforts at decarbonising this economy are slow and hard to achieve. In addition , brown coal, black coal and gas generators have absolutely nothing to fear about their business models as renewables are so pathetically overpriced. Over the next 13 years to 2030, large scale wind and solar will hardly make any difference to the energy mix – so really the incumbent fossil generators need not worry or fret, all will be well with them. They should make no changes to their modus operandi as variable renewables will only reach 27% and hydro and gas at 16% of the mix will easily “firm” solar and wind output -no threat to coal or gas generation, and really, no need to bother with that wind and solar firming requirement, not until 2030 at least. Household solar at 3% of the energy mix by 2020 is just a ripple in the energy market and even by 2030, will make hardly any waves, no need to impose restrictions such as fixed fees, export caps, low FiTs, or even energy export taxes. The report concludes that this distributed form of generation does not matter much. Perhaps this struggling component of the energy mix needs more support in terms of higher FiTs and other incentives.

    The Renewable energy target in the form of LGC’s and STC’s is clearly set too low and can safely be increased and extended out to 2030 – there won’t be much uptake in renewables anyway.

    • solarguy

      I so love a cynic!