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| Source: RenewEconomy |
Those who maintain that renewables have driven electricity prices higher completely misunderstand how the wholesale price of electricity is set.
For half an hour ahead, the AEMO (Australian Energy Market Operator) solicits offers for supply. It fills the required demand starting with the cheapest supplier and moving up through the offer "ladder" until supply is satisfied. Then all suppliers get the highest price. There's an explanation of the process here.
At the moment the highest cost supply is gas (it's a lot cheaper in the US). So this sets the wholesale price of electricity. Wind and large scale solar are the cheapest source of supply at the margin, because they have zero fuel cost. But the presence of wind and solar in supply requires "firming", usually peaking gas, to fill gaps in supply caused (a) by the variability of renewables supply and (b) by varying demand. For example, South Australian electricity demand can go from 1000 MW on a cool spring day to 3000 MW on a 45 degree C January afternoon. So batteries, pumped hydro schemes like Snowy 2, or the Cultana scheme in South Australia, or concentrated solar power molten salt storage will sharply lower the wholesale price, because they will obviate the need for expensive peaking gas. Renewables with storage will reduce the wholesale price of electricity.
Meanwhile, distributed renewables (rooftop solar plus household battery storage) and demand management will take away the need to upgrade the distribution grid which has given the networks the excuse for "gold plating" the grid which has made the cost of "poles and wires" so expensive. The cost of distribution now makes up half the cost of the typical retail bill.
This interesting report shows how rooftop solar is already driving down wholesale electricity prices because it's curtailing demand on hot days.
These things are all rational and explicable and logical. It would be wonderful if the Right bothered to try and understand.
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