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For years the prevailing public view has been that renewable energy will make electricity more expensive. Now, as more countries move towards a renewable energy future, evidence is showing that more renewable energy in the mix actually results in cheaper power, and offers to do the same for Australia.
Figure 2 Difference in wholesale electricity price with and without the MRET. From the BCA report: Modelling Success, page 134
A study for the National Generators Forum backs up this conclusion, finding that the RET would reduce the electricity pool price by 5%6. Based on the figures in the National Generators Forum report, electricity retailers would be $10 billion better off in 2015 with the RET than without it. The Business Council of Australia and National Generators Forum havent exactly been the biggest supporters of renewable energy over the years for reasons outlined below. However, even their own reports cant avoid the fact that renewable energy is a good thing for electricity prices.
Figure 1 Average Cumulative Wind and Wholesale Power Prices Over Time, from the US DoE Wind Technologies report 2009
So i f r e n e wable e n e rgy make s pow e r cheap e r, why are policies to suppor t r ene wables oppos e d so much?
For most of us, renewable energy brings only benefits from cleaner, safer and more affordable power. The only real losers are the generators of old, dirty fossil fuel electricity. So competition is a major factor as renewables and fossil fuels are both in the same game of providing electricity. But the major economic benefit of renewable energy is felt at times of peak electricity demand. When there is a major surge in demand for example, on a hot summers day when lots of air conditioners are on the wholesale electricity price often skyrockets hundreds or even thousands of times above the normal price. Peaks might not last long, but they are a major earner for the electricity generators. An example of these spikes in electricity cost can be seen in Figure 3.
Figure 3 Victorian wholesale electricity prices in late January 2009. Peaks are clearly visible during the day on both the 28th and 29th of the month. Graph produced from data accessed from the Australian Electricity Market Operator website. (http://www.aemo.com.au/data/aggPD_2006to2010.html#2010), accessed 1 December 2010.
The benefits of renewable energy, outlined above, help to manage the electricity supply and demand, and soften the spikes in wholesale prices during peak times, meaning they are not as profitable for fossil fuel electricity generators. Thats why renewables are met with such strong opposition from the fossil fuel industry: they are threatening the profits of a few companies. We cant let the vested interests of a handful of dirty energy companies prevent a future of safe, clean, reliable and affordable power. We need to make the shift to a 100% renewable energy future now!
www.100percent.org.au