The observed cost of high penetration solar and wind electricity

Andrew Blakers; Matthew Stocks; Bin Lu; Cheng Cheng

doi:10.1016/j.energy.2021.121150

The observed cost of high penetration solar and wind electricity

Andrew Blakers^*, Matthew Stocks, Bin Lu, Cheng Cheng

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

21 Citations (Scopus)

Abstract

High levels of variable solar and wind must be balanced with alternative generation, storage, transmission and demand management to ensure continuous availability of electricity. The cost of balancing has been disputed, which militates against mass deployment of solar and wind to mitigate climate change. Australia is installing solar and wind 10 times faster than the global per capita average which constitutes a natural experiment in the real cost of balancing. The National Electricity Market (NEM) and the state of South Australia have reached combined solar and wind energy penetrations of 24% and 70% respectively and are tracking towards 40% and 100% respectively in 2024–25. Investment in new balancing infrastructure is predominantly in pumped hydro (without new dams on rivers), batteries and transmission. The current (2021) and market futures (2024) spot price for electricity in the NEM and South Australia is about AUD$40 (∼US$30) per Megawatt-hour. This suggests that the balancing cost of high levels of solar and wind is modest.

Original language	English
Article number	121150
Journal	Energy
Volume	233
DOIs	https://doi.org/10.1016/j.energy.2021.121150
Publication status	Published - 15 Oct 2021

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title = "The observed cost of high penetration solar and wind electricity",

abstract = "High levels of variable solar and wind must be balanced with alternative generation, storage, transmission and demand management to ensure continuous availability of electricity. The cost of balancing has been disputed, which militates against mass deployment of solar and wind to mitigate climate change. Australia is installing solar and wind 10 times faster than the global per capita average which constitutes a natural experiment in the real cost of balancing. The National Electricity Market (NEM) and the state of South Australia have reached combined solar and wind energy penetrations of 24% and 70% respectively and are tracking towards 40% and 100% respectively in 2024–25. Investment in new balancing infrastructure is predominantly in pumped hydro (without new dams on rivers), batteries and transmission. The current (2021) and market futures (2024) spot price for electricity in the NEM and South Australia is about AUD$40 (∼US$30) per Megawatt-hour. This suggests that the balancing cost of high levels of solar and wind is modest.",

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AU - Stocks, Matthew

AU - Lu, Bin

AU - Cheng, Cheng

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N2 - High levels of variable solar and wind must be balanced with alternative generation, storage, transmission and demand management to ensure continuous availability of electricity. The cost of balancing has been disputed, which militates against mass deployment of solar and wind to mitigate climate change. Australia is installing solar and wind 10 times faster than the global per capita average which constitutes a natural experiment in the real cost of balancing. The National Electricity Market (NEM) and the state of South Australia have reached combined solar and wind energy penetrations of 24% and 70% respectively and are tracking towards 40% and 100% respectively in 2024–25. Investment in new balancing infrastructure is predominantly in pumped hydro (without new dams on rivers), batteries and transmission. The current (2021) and market futures (2024) spot price for electricity in the NEM and South Australia is about AUD$40 (∼US$30) per Megawatt-hour. This suggests that the balancing cost of high levels of solar and wind is modest.

AB - High levels of variable solar and wind must be balanced with alternative generation, storage, transmission and demand management to ensure continuous availability of electricity. The cost of balancing has been disputed, which militates against mass deployment of solar and wind to mitigate climate change. Australia is installing solar and wind 10 times faster than the global per capita average which constitutes a natural experiment in the real cost of balancing. The National Electricity Market (NEM) and the state of South Australia have reached combined solar and wind energy penetrations of 24% and 70% respectively and are tracking towards 40% and 100% respectively in 2024–25. Investment in new balancing infrastructure is predominantly in pumped hydro (without new dams on rivers), batteries and transmission. The current (2021) and market futures (2024) spot price for electricity in the NEM and South Australia is about AUD$40 (∼US$30) per Megawatt-hour. This suggests that the balancing cost of high levels of solar and wind is modest.

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The observed cost of high penetration solar and wind electricity

Abstract

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