Public Policy Papers

Policy Paper #3/2017: What are the full system costs of renewable energy?

Author: Stephen Wilson, Cape Otway Associates

Key Points: 

  • Australia faces the replacement of more than two thirds of its power generation capacity over the next three decades.
  • It is believed by many renewable energy advocates that variable renewable energy (VRE) options could replace coal- and gas-fired capacity without compromising the reliability of the power system. However, there is little understanding of the likely costs of doing so.
  • Most models of future full system costs are based on unrealistic assumptions. This paper outlines an approach to future costs that is based on a more realistic understanding of the technologies involved.
  • To be deployed at system-wide scale in the future generation mix, wind and solar need backup or storage. This paper provides an indication of the cost level of technology pairs that is more realistically comparable with traditional dispatchable generation.
  • The results imply that at current costs VRE options are unaffordable at scale. The costs of the VRE options considered by this paper vary from an estimated $125/MWh in the case of the wind/gas option to $1,200/MWh in the case of the rooftop solar/battery option at household level.
  • The Levelised Cost of Energy (LCoE) approach does not provide an adequate foundation either for formulation of sound energy policy or for system planning.

pdf Click here to download the full paper

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Policy Papers

Public Policy Papers: A compendium of Key Points (to May 2018) 

Since May 2013 the Institute has published 20 Public Policy Papers.

pdfClick here to view the compendium of key points. 


Public Policy Papers : A Compendium of Key Points (Aug 2016)

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Since May 2013 the Institute has published twelve Public Policy Papers.

pdfClick here to view the compendium of key points.

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