Renewables cheaper than coal in Australia

Wind turbines

Wind turbinesLast week I was reporting that in New Mexico, solar is now cheaper than coal, something that analysts forecast would occur only in three or five years. I was wondering if this was an isolated event or the harbinger of a closer paradigm shift.

Well, it seems that it is NOT an isolated event as in Australia, renewables are now cheaper than coal and other fossil fuels.  Yes, here is another coal-rich nation where low carbon outsiders are cheaper than the subsidized fossil fuels.

I am not sure if you – and I for that matter – understand how big these news are but this is a complete paradigm shift as it will change our world forever and for the better.

As the Sydney Morning Herald noted :

Australia is unlikely to build new baseload power stations burning coal because of tumbling prices for renewable energy and the rising cost of finance for emission-intensive fuels, according to research by Bloomberg New Energy Finance.

Even without a carbon price, wind energy is now 14 per cent cheaper than a new baseload coal-fired power station and 18 per cent cheaper than a new gas one, BNEF said in a new report.

The original article from Bloomberg New Energy Finance is remarkably interesting :

This new ranking of Australia’s energy resources is the product of BNEF’s Sydney analysis team, which comprehensively modelled the cost of generating electricity in Australia from different sources.

The study shows that electricity can be supplied from a new wind farm at a cost of AUD 80/MWh (USD 83), compared to AUD 143/MWh from a new coal plant or AUD 116/MWh from a new baseload gas plant, including the cost of emissions under the Gillard government’s carbon pricing scheme.

However even without a carbon price (the most efficient way to reduce economy-wide emissions) wind energy is 14% cheaper than new coal and 18% cheaper than new gas. “The perception that fossil fuels are cheap and renewables are expensive is now out of date”, said Michael Liebreich, chief executive of Bloomberg New Energy Finance. “

The fact that wind power is now cheaper than coal and gas in a country with some of the world’s best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head,” he said.

Indeed, with cheaper than fossil fuels renewable energies, our world will start automatically a new industrial revolution. A revolution where coal, natural gas and oil are phased out, not because they are polluting our air, soil and water, but simply because they are too expensive.

In a world of money, fossil fuels are losing one if not their only reason to still be used : there are simply cheaper alternatives.

Sure, we’ll see for the next years pollutocrats fighting tooth and nail to preserve their source of wealth. Sure, they’ll keep on bribing – oops, sorry, lobbying – to preserve their interests, but current news show they will lose this battle, and will lose it much sooner that I would have dreamed a few years ago…

Bob Dylan sang that ” the times they are a-changin’ “. I guess this is quite appropriate. So to celebrate this huge event :

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