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The insanity of burning coal for power as solar costs plunge to 1c/kWh by 2020

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1214-burning-australian-dollars2-960x540 copyBurning coal to generate electricity in today’s era of cheap power from the sun makes as about as much economic sense as “burning dollar notes”, one of Australia’s leading solar researchers has said.

Speaking at the APVI Asia Pacific Solar Research Conference in Melbourne this week, UNSW Professor Martin Green said the world had entered a “new area” where solar was well and truly the cheapest way of generating bulk electricity.

Green, who recently predicted that the cost of solar would fall to around $US10/MWh, or 1c/kWh by 2020, repeated that bullish projection on Wednesday, based on the new lows in prices being bid at international auctions for the long-term supply of electricity.

Green said this downward trajectory had taken the cost of solar from still “a relatively expensive option” just two years ago, to a point two months ago where a price of $US17.86/MWh was bid at an auction in Saudi Arabia.

It has since fallen even lower, to $US17.70/MWh, or $A23.40/MWh, in Mexico’s latest tender, for 3 terawatt-hours of solar electricity.

“I was brave enough to project that some time between now and 2020 we’d see a bid of $US10/MWh, that’s 1c/kWh for solar from one of these auctions,” Green told the conference on Wednesday.

“I think that’s very likely to happen,” he added.

“So we’re in a new era. … If you look at the costs that have been bid for solar compared to a new coal plant, well actually they’re there times lower now.

“And the really interesting and perhaps important thing is that if you compare the costs that are being bid for solar against the opportunity costs for the coal – that is, the money you’d earn by selling the coal, rather than burning it – you can see that the solar costs are even lower than that.

“So that sort of means that while the sun is shining, burning coal to generate electricity is a little bit like burning dollar notes. You’re just throwing money down the drain,” Professor Green said.

“I think that’s an important new era, because it takes away an incentive to keep the coal plants operating if you’re getting cheaper electricity from another source.

“The really exciting thing is that costs are still likely to get very much lower with solar.

“We’re still seeing these rapid reductions (in solar costs) and no sign of them falling off. …So it’s a very promising future.”  

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  • Joe

    Is burning dollar notes cleaner than burning Coal?

    • Hettie

      Probably not. They are plastic, and the inks will have all sorts of nasties in them.

      • trackdaze

        Lets call it a draw.

        • Hettie

          Sounds fair.
          😊

        • RobertO

          Hi Trackdaze, Only if you burn then in equal weight (supplied by the gentailers of course) will it be a draw.
          I wonder if this is the point at which it has become cheaper to build new wind and solar than feed old coal (it must be close).

  • howardpatr

    Don’t say this to Turnbull and Frydenberg – they might well believe you but they won’t acknowledge that in the face of the many RWRNJs in the Abbott faction.

  • Robert Westinghouse

    Can it get any more obvious for those Bozzos in Canberra?? Dr Green is a well-respected scientist. Trunbill and his merry men are just thieves and fools.

    • Joe

      Two Tongues Turnbull has been awfully quiet lately on the issue his pet Coaler, the old girl Liddell. Perhaps he now realises Liddell 2.0 is not going to save the day when the weather starts warming up, a costly fiasco of hundreds of millions $’s, that won’t work in the heat just when Western Sydney cranks up the air con.

    • stucrmnx120fshwf

      If in the past, solar cost much more than coal, now solar, is the same price, in the future, solar will be much cheaper. So much cheaper, that in a roaring twenties, peak decade of industrial revolution, clean disruption, we could have 25 times as much energy available for the world. For example, 25% of Australia’s desert, can give us a trillion tonnes of liquid hydrogen and there are deserts, on every continent on Earth, even Europe has the Spanish desert.

  • Ray Miller

    “so it’s a very promising future” ah not if you own shares in Origin, AGL , coal industry or rely on coal royalties or coal kickbacks…

  • Radbug

    Now perhaps Westfield will follow Stockland’s lead and have PV arrays installed atop its own shopping malls.

    • Chris Fraser

      It’ll match their load profile almost perfectly.

  • Alan S

    It’s always good when anyone points this out – leading solar researcher or not. It’s even better if the ex-CEO of a fossil fuel generator eventually sees the light and points it out. It’s best of all when the current CEO of a fossil fuelled generator has the guts to admit it.

  • Hugh McBride

    Michael liebriech of Bloomberg new energy finance gives a very interesting talk at California ISO. Between 2015 to 2017 cheapest solar went from 5c to 1.79c in just 24 months on and offshore wind had similar drops. Predicting that in the 2030s it will make more economic sense to shut existing coal and gas plants and build solar….