October 3, 2018 Read More →

Australian utility exec: Baseload power era is over

Renew Economy:

[Australia’s] Origin Energy says the cost of wind and solar farms has fallen so far it is now cheaper than the marginal cost of coal generation, and the company is moving on from the concept of “24/7 base-load”.

The assessment was made by Greg Jarvis, the company’s head of energy trading and operations, in an interview for Renew Economy’s popular Energy Insiders podcast, published on Tuesday.

“I have been in this game for so long … the one thing I have seen is just the cost of renewables really change the game,” Jarvis says. “It is amazing what we have been seeing. Renewables are cheaper than the marginal cost of black coal at the moment. They are very cheap.”

Jarvis puts the cost of solar in the mid $40s/MWh and the cost of wind at the low $50s/MWh. That cost of solar is around half the average price of wholesale electricity in most states this year. And with the falling cost of storage – this is likely to enable “firm” renewables to emerge as a serious contender to existing fossil fuel plants.

Jarvis also made it clear that Origin Energy has moved on from thinking about new generation in terms of “base-load”, which stands in sharp contrast to current government thinking and the conservative commentariat. Asked if Origin Energy had moved beyond the idea – promoted by the federal government and many in mainstream media – that reliability depended on 24/7 base-load power, Jarvis said: “Oh, a long time ago. The idea of base-load power stations is well and truly gone.”

He cited Origin’s recent investment in its last coal fire generator Eraring, and its efforts to make it more flexible so it can power down in the middle of the day so Origin can focus on cheap renewables, before turning up the power at peak times.

More: Origin says solar cheaper than coal, moving on from base-load

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