Australia tipped to have 50GW of solar capacity by 2040

A new forecast by leading analysts Bloomberg New Energy Finance predicts that Australia will have more than 50GW (50,000MW) of solar capacity by 2040, and more than half of all generation capacity will be “behind the meter” and located in households and businesses.

The forecasts by Bloomberg, made at RenewEconomy’s Disruption and the Energy Industry conference in Sydney this week, also included a prediction that household solar capacity would be 2.5 times greater than that of remaining coal-fired generators by 2040.

Analyst Hugh Bromley says it will simply be a matter of economics. “Solar is getting cheap … and coal will become expensive,” particularly for new power plants. “It (coal) is not in the money any more.”

bloomberg solar australia

The forecasts reflect a couple of major trends that will take place in the energy market in coming decades.

The first is the push for consumers to generate their own electricity. Bromley predicts that half of all consumers in Australia will have rooftop solar by 2040.

Bloomberg has previously predicted that there will be around 37GW of rooftop solar in the Australian market, but for the first time has broken that down to different segments (see graph above). Around two-thirds of this (23GW) will be installed on homes, 5GW of commercial businesses, and 9GW on industrial facilities.

That industrial take up is unlikely to occur until the mid 2020s, but then will be rapid as it dovetails with the rollout of battery storage – meaning that energy intensive industries can, and will, use solar to drive their operations.

The combination of rooftop solar and 15,000MW of large-scale solar means that the technology will account for half of all Australia’s generation capacity by 2040. Combined with wind energy and hydro energy, renewables will account for two-thirds of capacity.

The other big trend is the growth in “flexible capacity” which will mostly mean battery storage, but also concepts such as demand management and controlled loads. This will be key to accompanying the proliferation of solar and other variable technologies such as wind.

This is part of the scenario that Bromley calls Solar 3.0 – which will feature automated control & analytics, fully integrated into power systems, and ubiquitous coverage.

It is the behind-the-meter market that represents the big change – and it accords with predictions from the International Energy Agency, and even huge utilities such as Engie, the owner of the Hazelwood brown coal generator in Victoria.

Bromley says this will be the result of cheap solar costs, cheap finance, and the benefits of locating generation close to consumption, rather than hundreds of kilometres away.

Bromley says that by 2040, 18 per cent of all consumption will be from behind-the-meter solar. The trends will include growing concepts such as “virtual power plants”, where the output from multiple sources is pooled and aggregated and used as a single power station. Trials are already underway in Queensland.

And Bromley says that even changes in tariffs will not alter the outcome much. “There is a lot of value occurring behind the meter,” he says. Solar will be at 8c-10c/kWh which, with tariffs at around 28c/kWh, offers substantial value.

Utilities in Australia have been jacking up fixed prices and network charges in an attempt to recover revenues they see as lost from the uptake of solar. “You can rejig tariffs by a substantial margin and still not affect the value of solar,” Bromley says.



He said that utilities had been largely resisting change – lobbying for diluted renewable energy targets, seeking the removal of subsidies, and taking no action that was different to business as usual. But in the last 18 months this was starting to change. “They have to respond,” he says.

Bromley admits, even his forecasts may be conservative. In WA, the energy minister Mike Nahan has predicted that the uptake of solar may be even more widespread and account for all of daytime energy consumption, and a similar prediction has been made  by the Australian Energy Market Operator for South Australia.

Bromley pointed to the rapid uptake of new technologies by households over recent decades.  “Incremental technologies are moving faster.”

The uptake of solar looks quite slow compared to these curves (see graph below). “This could move quicker,” he said, particularly if the technology became ubiquitous. “Not every technology gets ubiquitously adopted, but superior technologies generally do. Solar PV is going towards this trend  ….  the economics suggest that whether it’s behind the meter or in front of the meter, the economics will be appealing.”

bloomberg adoption

Comments

9 responses to “Australia tipped to have 50GW of solar capacity by 2040”

  1. Math Geurts Avatar
    Math Geurts

    Amazing! With 1.6 kW/W per year this 50 GW will already deliver 80 TWh, or 288 PJ, or about 5% of Australia’s (2014) final energy consumption

    1. nakedChimp Avatar
      nakedChimp

      you have a typo there.. it’s 1.6kWh/W not 1.6kW/W to get to the 80 TWh or 0.29×10^18 J.

      final total energy consumption 2012 for Oz is 6320962 TJ or 6.32×10^18 J
      http://www.eia.gov/beta/international/rankings/#?prodact=44-2&iso=AUS&pid=44&aid=2&tl_id=2-A&tl_type=a&cy=2012&ug=2

      Question, if I may. What kind of efficiencies are being achieved to convert this “total energy consumption” INPUT into useable forms of action (driving something, etc..) and how does an electric drive compare to that?
      A little bit outdated, but this should drive home the message:
      http://www.mpoweruk.com/energy_efficiency.htm

      In other words, I question your assumption that we need to be able to supply the useable energy need PLUS the energy wasted by the old conversion processes.

      If one looks at the lightbulb example on that last link I posted.. its easy to imagine that a solar panel and a set of batteries can drive that 15W CFL with less installed capacity exactly as good as the powerplant a couple of hundred km away with all the conversion/transportation losses involved and which feeds of that “primary energy”.

      1. Math Geurts Avatar
        Math Geurts

        The source for Australia’s “final energy consumption” http://www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/aes/2015-australian-energy-statistics.pdf

        Maybe Australia will use less final energy in 2040 but how much will remain is speculation.

        1. David Osmond Avatar
          David Osmond

          Good point nakedChimp. If we generate 80 TWh (288 PJ) from solar, displacing a similar amount (80 TWh) from fossil fuels (hopefully mainly coal), then this will reduce our primary energy consumption by about 500-800 PJ, since coal generation is typically ~25%-33% efficient in Australia.

        2. nakedChimp Avatar
          nakedChimp

          Thanks for the source, so which value out of there are you referring to, when you say ‘final energy consumption’?
          On page 11 it states ‘Australian energy consumption, by fuel type’ (for 2013/14) and the total is 5831.1 PJ (5.83 x 10^18 J).. but this must be the gross inland energy consumption (http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Gross_inland_energy_consumption).
          Page 9 has got the details and it reads:

          Energy consumption measures the total amount of energy used within the Australian economy. It is equal to indigenous production plus imports minus exports (and changes in stocks). It includes energy consumed in energy conversion activities, such as electricity generation and petroleum refining, but excludes derived fuels produced domestically to avoid double counting. It can be referred to as total net energy consumption and is also equal to total primary energy supply.

          What we would need would be as you say ‘final energy consumption’ (http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Final_energy_consumption) which seem to exclude conversion losses by energy distributors. But even this one misses conversion losses at consumer side (ICE engine for example).

          So again.. by deploying LEDs instead of incandescent, insulating homes with double glazed windows and bulk insulation, converting to BEV for transport, etc. pp. we’d probably be able to cut gross energy consumption by 50% and more.

          1. Math Geurts Avatar
            Math Geurts

            You are right. According to table 3.7 Australia’s final energy consumption in 2013-2014 is 4060 PJ (of which 11.1% residential). So 50 GW or 80 TWh PV in 2040 would be already 7% of Australia’s final energy consumption! That is even more than Germany according to Eicke Weber (in 2050!). How far could PV grow in Australia in your opinion?

          2. nakedChimp Avatar
            nakedChimp

            OK
            *sets up water to boil, pours a cup with tea leaves, drinks the tea, looks at the leaves*
            ..
            I guess rural blokes will need to aim for 100% PV with battery and some form of genset backup or whatever else offers a similar feature – as the cost to maintain a grid out there is just too high (most already do anyway) – the people out there couldn’t pay for it in the first place an the ones in the urban centers will point to RE and batteries as adequate replacement – maybe even with a bit of subsidizing?

            Maybe a lot more people pretty far out will be able/need to install some small(er) wind turbines too.. as they don’t have the NIMBY problem 🙂

            Everybody in urban/semi-rural areas will still depend somewhat on the grid as it should be cheaper than private deep backup/storage and more convenient than a personal blackout for large swatches of under-performing sunshine and will be needed for BEV/industry/high density living anyway. Battery backup for daily usage will be common though.

            The grid should transform to some sort of baseload backbone that is not built for peak performance, but for reliability and regular transmission of energy back and forth.
            I guess 30-40 years from now?

            Anyone considering a trade.. electrician and anything to do with smart energy installations will be pretty future proof.

          3. Math Geurts Avatar
            Math Geurts

            I suppose these applications are part of the mentioned 50 GW. How much PV above 50 GW do you expect?

        3. Alastair Leith Avatar
          Alastair Leith

          Speculation or informed modelling. Beyond Zero Emissions has undertaken this task with the Stationary Energy Plan, Buildings Plan, High Speed Rail Report, Transport Plan (YTBR), Industrial Processes Plan (YTBR), Land Use Report and Land Use Plan (YTBR). But the SEP outlines the big numbers in broad terms and how to replace a FF based economy with 100% RE.

Get up to 3 quotes from pre-vetted solar (and battery) installers.