New wind farm to provide 10% of Vic's electricity

There has been an explosion in new wind and solar farms in Australia.  The reason is simple: the all-in costs of new wind and solar have fallen below A$60/MWh ( US$42/MWh) whereas the cost of wholesale electricity, driven by the high cost of gas- and coal-powered generation in Oz is substantially above that (A$80/MWh or more).  I talked before about a proposed offshore wind farm (its costs will be higher than $60/MWh, but offshore wind is less variable than onshore wind) which if it goes ahead will provide 18% of Victoria's electricity.

Now there's another wind farm, which will be the largest in the Southern Hemisphere:

The managing director of a company that plans to construct Victoria’s largest windfarm says the project will supply enough power to replace up to a third of the generation of the decommissioned Hazelwood power station at less than $50/MWh.
The Victorian government has granted a planning permit for WestWind Energy’s $1.5bn Golden Plains windfarm, which will become one of the largest windfarms in the southern hemisphere. 

The windfarm would span 17,000 hectares [42,000 acres] on land 60km north-west of Geelong and generate more than 3000 gigawatt hours of electricity per year – enough to power more than 400,000 homes.

Tobias Geiger, the managing director of WestWind Energy, said the large scale project would be able to supply energy at low cost.

“With this very large project and very good wind resource, combined with the latest wind turbine technology that’s now available, we can achieve a levelised cost of energy for this project that is below $50 per MW/h,” he said.

“If you put that into the context of electricity market prices from Victoria which for the past two years have hovered around $80 to $120 per MW/h, you can see the significance of this project for driving down electricity prices for all Victorians.”

Simon Holmes à Court, a senior advisor at the Climate and Energy College at Melbourne University, said bigger turbines, better sites, economies of scale and more competitive financing “have literally halved the cost of of wind energy”.

“At $50/MWh — just 5 cents per kWh — the Golden Plains windfarm will produce power for less than the market cost of fuel alone for many coal and all gas power stations,” he said.

“And it’s big — expected to provide between 8–10% of Victoria’s energy.”

[Read more here]

Although the electricity produced by this wind farm will be half the cost of coal- or gas-generated electricity, it's still not a done deal that there will be complete replacement of fossil fuel electricity.  This is because as the percentage of renewables in the grid rises, we need more storage.  And although wind farms have started adding storage, it's only a couple of hours.  To go to twelve hours of storage which is what we'll need to get to 80 or 90% renewables, we'll have to see the cost of battery packs below $100/kWh, which won't happen until 2021.   

However I see no problems with the ne Victorian renewable energy target of 50% by 2030.  Actually, I suspect we'll get to 100% by then.  The key is Simon Holmes à Court's point: 

“At $50/MWh — just 5 cents per kWh — the Golden Plains windfarm will produce power for less than the market cost of fuel alone for many coal and all gas power stations,” he said.

When storage gets cheap enough, coal power stations will be retired early because they'll simply be too expensive to run, let alone build.