How cheap are renewables!

In March, Snowy Hydro, the Ozzie government-owned company which owns and operates the Snowy River dam complex, and which owns the energy retailer, Red Energy, had this to say about renewables:

For a start, Broad noted, the recent tender for 888MW of wind and solar conducted by Snowy Hydro had elicited an average bid of just $40/MWh. This, Broad said, compared to the existing cost of coal – which on fuel costs alone needed a power price of $56/MWh to break even. (Full transcript is here).

Just to repeat, $40/MWh for wind and solar, all in, and $56/MWh for coal, just the fuel costs, not including the cost of maintenance and the capital cost to build anything new.

If that wasn’t a big enough slap down of the Coalition’s miserable defence of coal, Broad went further, saying that the cost of “firming” that wind and solar output would be well below the current wholesale price of electricity, which as the Australian Energy Market Operator recently concluded, has recently set by black coal, which is why wholesale prices are at record highs.

Broad said the total cost of wind and solar was less than $70/MWh, and would likely be less than $60/MWh.

(Source, all costings in A$ )

For the US, this is what relative costs look like (according to Lazard's latest estimates):

And the truth is that peaking gas in the USA is starting to be replaced by storage, because it's cheaper.  Gas in the US is a lot cheaper than in the rest of the world, but peaking gas is always expensive because the plants are only run for a small proportion of the year.  My wind plus gas peaking estimates assume 80% wind and 20% gas peaking.  Note how expensive new nuclear is.