Paying twice, and more – why renewables are a luxury good

According to AEMO, while 17,000 MW of renewable generation capacity will be added to the system in the next ten years, only 5% of this will actually be available at periods of peak demand: that is, when it is needed.

And the utilisation of renewable energy plants is well down on coal and gas-fired plants. Thermal power plants have a capacity factor of 85-93%, while solar PV is 13-19% and wind power 20-40%.

A new brown coal station in the Latrobe Valley was estimated to cost $2m per MW of potential capacity, and the new Equis Wandoan solar farm is estimated to cost $1.5m on the same basis.

Once you take their capacity factors into account the coal-fired station will use its equity 3.7 times more efficiently, making the solar farm much more capital-intensive, outweighing the fact that sunshine is free and coal is not.

But it gets worse. Studies show that for every megawatt of installed renewable generation, you need a megawatt of backup dispatchable.

That’s like having one serviceable comfortable sedan sitting in the garage and being forced to buy a trishaw, for equal cost, but having to use a driver who only turns up sporadically, when it suits them.

Being forced to pay two for the price of one is a bit of accessorisation they don’t tell you about.

And it gets worse. Your trishaw requires extra work done on the roads, and they load that into your invoice as well.

Much of the increase in the cost of electricity has come from “gold plating” the network – the electron highway. An increasing amount of that “gold plating” will be to make the system two-way, or to build high voltage networks to previously inaccessible places where wind and solar farms are frequently located.

Storage devices like batteries are no alternative to standby power and increase costs phenomenally.

Take Elon Musk’s 129 MWh lifeline to South Australia. At its full retail price of $200m it could fill-in for a 129MW solar farm worth $193.5m for only one hour with nothing left for the other 23.

That gives it a capital cost of around 5 times the generator it is backing-up. Over time the battery will degrade – just like the one in your phone or your laptop – so it will have to be replaced long before the generator, costing even more.