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Can we afford a renewables-only power supply?

By Geoff Carmody - posted Wednesday, 4 April 2018

Australia is transitioning from fossil fuels to renewables. Are the latter reliable? What generation and storage capacity, at what cost, is needed for renewables providing all power? We seem to be heading there.

Politicians duck these questions as hard as they push renewables. They hide behind using remaining fossil-fuelled power, 'demand response' (rationing), other selective outages, and crossed fingers, as back-up.

As renewables rise due to ambitious state renewable energy targets (RETs), reliability imperatives will force these crucial questions to the fore. What happens as we get to 100% renewables?


Consider two solar renewables costs not shared with fossil-fuels, one of which is avoidable – at a high price. The maximum generation capacity (call this TC) of solar panels (PVs) is the sum of:

  • Power generated and used ('used power' or UP), plus
  • Power generated but not used ('unused power' or UUP – sometimes called 'curtailed supply'), plus
  • Power not generated at all ('no power', or NP).

In Australia today, UP, UUP and NP all have positive values adding up to TC.

On very sunny days, solar panels generate much power, but often it's not used to power appliances, charge batteries (if they're fully charged) or fed into the grid. Grid feed-in is stopped to protect it (eg, because voltage from excess supply increases above required levels). That power is 'unused', or 'wasted'.

So PVs generate power we use, plus some power we don't – or can't. Used and unused power are a job lot produced by the same PVs. We have to cop the latter to get the former.

Very windy and sunny SA is a good example. Last financial year, AEMO reported used solar power was about 15% of total PV capacity in SA. The remaining 85%, was 'unused power' plus 'no power'. AEMO records used power (UP) and total capacity (TC). 'Unused power' and 'no power' aren't shown separately.


Suppose we want solar to deliver the same power as the fossil fuel plant it's replacing. Call this number 100. What solar generation capacity is needed, with a 15% 'efficiency rating', to deliver power of 100? We need about 6.7 times the generation capacity of the fossil-fuel plant. That's 100 divided by 15. With 15% 'efficiency', solar capacity must be sufficiently larger to generate enough power to match the continuous power generation of fossil fuels (in this case a value of 100). We need 6.7 times more generation grunt to do the same power supply job. This is solar intermittency in action.

There's more: 15%-of-capacity power generation, 24/7, can't happen. We'll see 100% of capacity for 3.6 hours (15%) of each day, on average, and zero for the other 20.4 hours. The additional generation capacity required is the same either way. The 3.6 hours scenario also needs batteries to cover the other 20.4 hours.

Of this solar power set at 100, 15% can be used as generated. The other 85% must be stored for use when the sun doesn't shine. We need up to another 5.7 times the generation capacity equivalent of the fossil-fuel plant being replaced to store the extra 85% of solar power. That's 85 divided by 15. Intermittency again.

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About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

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