Which parts of Australia deliver the cheapest wind and solar? | RenewEconomy

Which parts of Australia deliver the cheapest wind and solar?

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AEMO says south west Queensland and South Australia deliver lowest cost solar, while Tasmania has the lowest cost wind resource.

Woolnorth wind farm, Tasmania
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Wind and solar are clearly the cheapest form of new electricity generation in Australia – we know that from the various studies conducted by the CSIRO, the Australian Energy Market Operator, and others over the past few years.

But where in Australia is wind and solar the cheapest to produce – taking into account the actual resource, the transmission costs, and the installation costs.

AEMO has provided an answer to that in its draft of the Integrated System Plan, its 20-year blueprint of what needs to be done under various scenarios to accommodate the exit of coal from the main grid, and its replacement by cheaper and cleaner technologies.

It’s important work, because AEMO has that at least 30GW of new wind and solar will be needed to replace retiring coal generators, and up to 47GW over the next two decades under its “step change” scenario that respects what scientists say is necessary to match the Paris targets. 

The analysis by AEMO suggests that the Darling Downs region in south-west Queensland offers the cheapest cost of large scale solar technologies, followed by northern South Australia and the area around Roxby Downs, the location of BHP’s giant Olympic Dam project – which may get a renewable upgrade depending on the results of its current energy tender.

For wind energy, the cheapest locations are to be found in Tasmania, with the Midlands region delivering anticipated costs of around $40/MWh. Other regions competing on costs are in Victoria, far north Queensland, and the southern parts of South Australia.

The most expensive regions for large-scale solar are in north and far north Queensland, likely due to the amount of cloud cover. The least attractive areas for wind energy are Wagga Wagga, other areas of south-west NSW and Broken Hill, which will be little cheer for AGL and its partly owned Silverton wind farm, already suffering from severe network constraints.

The costings were done by AEMO to help it guide its preferred locations for renewable energy zones. It has identified 35 of these REZs that might need to be built over the next 20 years, depending on the scale of the transition to renewable energy that is adopted.

Its 20-year blueprint – which considers scenarios ranging from slow change (catastrophic in terms of emissions and climate change) to “step change (which at least matches the science) – and puts a high priority on eight different REZs across the country.

These include three in Queensland (Darling Downs, Fitzroy and far north Queensland), three in Victoria (all for wind), one in NSW (wind and solar) and one in South Australia (solar at Roxby Downs).

“The ideal near-term REZ locations would take advantage of both attractive renewable resources and spare transmission capacity – subject to land availability, regional policies, and consultation with local communities and traditional owners,” the document says.

“While similar REZs would be needed across scenarios, the timeline varies. For example, with VRET (Victoria’s renewable energy target) and QRET (Queensland’s) continuing to 2030, most early REZ development occurs in Queensland and Victoria.

“If those state-based schemes finish early, REZ development in New South Wales, South Australia and Tasmania will be accelerated.”

It says the additional 3GW of VRE (variable renewable energy – or wind and solar) now planned for early development in Central West REZ by the NSW Government may also influence the location and timing of wind and solar projects across the NEM.

“While long-term stranded asset risk is relatively unlikely, there is a risk of underutilisation if assets are developed and a different scenario unfolds.”

See also: AEMO maps out path to 90 per cent renewables for Australia by 2040





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  1. Shilo 6 months ago

    The cost seems very high, I was under the impression wind and solar was much closer to $10 or below. But still it will keep getting cheaper.

    • Craig Fryer 6 months ago

      There are many different ways the cost of electricity can be calculated. However levelized cost of electricity (LCOE) is normally the most accurate.Some coal power stations are around $40 per MWh, but that is because they are fully paid for and living beyond their expected life. That figure may not take account of rehabilitation of the site after the plant is closed. This can be very significant because of all the contamination.

      The real comparison should be made between the replacement cost, that is a new or completely refurbished coal power station verses wind or solar. Then figures for coal are closer to $60 (plus – added later). Of course that doesn’t factor in the massive damage they do to the environment or high risks involved just to extract the coal.

  2. juxx0r 6 months ago

    Does anyone have any idea where they are shipping the power to? Some might know of significant mining activity near Roxby Downs, called Olympic Dam, which draws 125MW, then up the road Prominent Hill, roughly 80-100MW. Same for Wagga Wagga, there’s a mine just north of there that pulls about 100MW.

    Seems to me they are overstating the transmission. They are even doubly overstating it if they don’t account for the power that is no longer travelling to these areas.

    • JackD 6 months ago

      What about the large Capital City Loads which are multi-GW each? Once RE is the mainstream source of electrical energy, then these Metro loads will inexorably increase as new industrial activities are born.

      Australia could be on the cusp of another goldrush driven by RE – the plentiful source of cheap electrical energy and how it could very easily re-invigorate and revitalise our otherwise stagnated industrial cities (the Capital Cities, Newcastle, Wollongong, Port Augusta, Mt Isa, Western Port, Townsville, Whyalla, Geelong, Port Pirie and Portland all spring to mind).

      We need big thinking not small town, small mindedness. Trouble is our Federal Government is hooked on maintaining the rearward looking status quo. It is so obviously and sadly, quite bereft of Vision….

      One hundred years ago our two biggest cities had very small populations. Just look at what has been achieved since then. Just think what wouldn’t have been achieved if our nation had been subject to the same small mindedness which is plaguing us now.

  3. George Michaelson 6 months ago

    The FNQ thing has to be understood as a cost of delivery which is high not matter the source: people just don’t get a sense of the distances in Qld. If the power is generated closer to FNQ industrial consumption, this would change. But then we’re saying de-facto the eastern seaboard national-net is probably a poor fit for reality, and we should operate islanded if we want to focus on cost. If we stop caring about transmission cost, socialize it (which is what i think we should do, its a utility function) then this becomes an efficiency question, not a cost question.

    Is it efficient to generate power in FNQ and send it south? It depends. HV might make it very efficient. Not cheap.

  4. Alan Wilson 6 months ago

    Im sure we are going to see a lot of solar on the other side of the great dividing range in QLD and NSW and offshore wind power on the west coast of Tassie and SA coast …. or l hope so we should be putting in as much as possible and pump hydro lots of pump hydro…

  5. JackD 6 months ago

    You know, one would expect wind to be cheapest in Tasmania where the North West is exposed to the Roaring 40s. Of course, one needs load to soak it up or transmission to get to a load. Time to get on with MarinusLink.

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