Alternative energy sources were once derided by energy experts as too expensive to replace fossil fuels anytime soon. However, a new study by
Bloomberg says wind generated costs per megawatt-hour for wind generated electricity are AU$80 compared to AU$143 for a new coal plant or AU$116 for a new baseload gas plant. The prices include the cost of emissions under Australia's carbon pricing system, but even without the carbon taxes, wind is 14% cheaper than coal and 18% cheaper than natural gas. This is real news in a country that is the
world's second largest coal exporter. Michael Liebreich, chief of Bloomberg New Energy Finance says, "The view that fossil fuels are cheap and renewables are expensive is now out of date." Since 2011 the cost of wind generation has fallen by 10% and the cost of solar photovoltaics by 29%, while the cost of new energy from fossil-fueled plants is high and rising. Part of that cost increase is due to financing costs. A survey of major Australian banks show that lenders would require a risk premium due to "reputational damage" from greenhouse gas emissions. The results of the study suggest that Australia may be joining Germany in a renewable energy future. By 2020 solar will be cheaper than new coal or gas. Currently, over 75% of Australia's electricity is generated by coal. Older fossil fuel plants that have been depreciated over the years still produce the cheapest energy, but the game has changed for new energy generation in Australia.
 |
| Nellis AFB, NV solar array |
Another type of renewable energy, solar, is producing good news too. The world's installed solar capacity has hit 101GW (gigawatts) according to the European Photovoltaic Industry Association, exceeding predictions from only ten years ago. Europe is the solar leader despite regulatory uncertainties. Last year Europe installed nearly 17GW while the US only installed 3.2GW
[photo] . Currently, Germany is the world leader in total installed solar energy followed by Italy and China. In fact, Germany now produces 20.8% of its electricity from renewable sources, up 15% from 2000 according to
Der Spiegel. The increase is no doubt driven by the German government's announced policy of 35% renewables by 2020. The country's renewable energy act has provided investors and manufacturers an assured market for their products. Photovoltaic solar power has increased more than 76% in the past year, surpassing hydroelectric power, despite the fact Germany receives about the same amount of sunshine as Alaska. Chancellor Merkel's market-oriented government recently increased incentives for the production of wind, biomass, and geothermal fuels. Germany plans to be nuke-free by 2022.
