Renewables surge glimpses cheap energy future - MacroBusiness
Renewables surge glimpses cheap energy future - MacroBusiness
Australian electricity prices continue to defy the naysayers with cheap outcomes. The quarterly moving average has fallen to the lowest price since the outbreak of the Ukraine War:
It is cool to watch renewables displace the evil gas cartel in the grid. Gas usage remains about half the usual owing to perfect conditions for wind and solar:
When the AEMO conducts its energy supply auctions every five minutes, renewables bid ZERO, coal bids next and gas last, so the latter often sets the price.
But renewables production has been so good with high winds and rousing sunshine that gas has much more often not been needed at all.
This is especially groovy as the evil gas export cartel drives up the local gas spot price as it chases Asian export prices:
We’re not out of the woods. The evil gas cartel will return when renewable conditions ease and summer ramps power demand.
This is, in part, why electricity futures are still high (though recent renewable penetration has helped lower them):
And, of course, further coal power exits from the grid will boost the need for gas-fired power if there is not a much more aggressive battery build-out.
This is where public policy should be focussed—the delivery of more power storage. The potential for decentralised battery deployment is staggering.
But, as usual, Albo the Wrecker is too busy crawling to the latest interest to notice.
Related Knowledge Center: ENERGY BASICS: renewables
Renewable energy sources — once the fuel of the future, then practical in specific, narrow applications — are increasingly economic mainstream sources of power generation. Hydropower was long the mainstay of U.S. renewable electricity generation, although wind power surpassed hydro for the first time in 2019, and solar continues its rapid growth. The continued growth of wind and solar, with their fluctuations, is tied in part to improvements in storage technology: batteries.