Shocking! Nations with more renewables have more expensive electricity

The Mystery: The most resource-rich nation on Earth has the highest electricity prices?!

Ask anyone and get confused: It’s poles and wires, gaming of the system by capitalist pigs, excessive taxes, privatization, and record gas prices.

The CleanEnergy Council tells us that Australia has one of the longest electricity networks in the world — we need lots of poles! And so we do.

But once upon a time, Australia had the cheapest electricity in the world and we still had lots of poles. Not only were there miles of poles and wires, there were also capitalist pigs, excessive taxes, and privatized generators.

There were wild gas price spikes too, (during which we probably just burned more coal). Evidently, something else has changed. Something seismic that wiped out all the bids below $50/MWh. 

Perhaps it has something to do with the 2,106 turbines in 79 wind farms that on random windy days might make 4,325MW that didn’t exist in Australia in 1999 when electricity was cheap and our total national wind power was 2.3 megawatts?

Another clue might be the 1.8 million new solar PV installations, which theoretically generate 7 gigawatts of electricity at noon on cloudless days if all the panels have been cleaned. Back in 2007, we had 14MW.

But of course, cause and effect are devilishly difficult. The one thing we know for sure is that even though sunlight and moving air are free, there is no country on Earth with lots of solar and wind power and cheap electricity.

Any day now, renewables are going to make electricity cheap, but when that happens, it’ll be a world first.

See the graph: the more renewables we have the more we pay…


Source: Paul Homewood at NotalotofpeopleKnowthat inspired graphs by Johnathon Drake, and Willis Eschenbach, and Dave Rutledge, similar to this one. This particular graph came via Judith Sloan in The Australian, though I can’t seem to find the exact link.

 We’re high achievers price-wise

Australia is far above the trend-line.  Our electricity is even more expensive than it should be for the number of renewables we have.

At a guess, this might be because other nations have more “hydro” in their renewable mix and less wind and solar.  Or they have access to nuclear power (like all the EU countries).

It may be made worse by the way our energy markets are managed, the profusion of bureaucracies, the subsidies and rebates, the renewable energy target, or the overlapping state and federal green aims.

It also may be that in our smaller market we have a few big players gaming a volatile, complicated market. Stability may cost more here, due to the fragility of our network.

Don’t blame wind and solar… oh, wait

To isolate the effect, this graph from Euan Mearns takes out the “hydropower” and biomass aspect and just looks at wind and solar. Spot the trend:

(Note that “Aust” means Austria, not Australia)

Figure 1 The Y-axis shows residential electricity prices for the second half of 2014 from Eurostat. The X-axis installed wind + solar capacity for 2014 as reported in the 2015 BP statistical review normalized to W per capita using population data for 2014 as reported by the UN.

As Euan Mearns says, there’s more than one variable at work here, but the inescapable conclusion is the countries with the highest levels of renewables pay the highest prices.    h/t Don B.

Is that another 10 cent price rise coming?

According to Wikipedia, our wind power capacity is set to rise 250% or something crazy (I’m skeptical):

From wiki wind power in Australia–  As of May 2017 a further 12328 MW of capacity was proposed or committed.[2] “AEMO Planning and Forecasting – General Information Page”. Retrieved 7 June 2017.

For a population of 24 million that means we would add another 500 watts/capita. Eyeballing the trendline in the graph,  prices would rise by another 10c/KWhr. (Don’t try to unpack the X and Y units exactly and calculate it. That’s another story.)

Say it again: there is no country on Earth with lots of solar and wind power and cheap electricity.

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Comments (2)

  • Avatar

    Spurwing Plover


    Wind and Solar Energy can not be relied upon to always be there becuase the wind dont blow all the time and the sun is not up for 365 days a year

  • Avatar

    David Lewis


    I still remember claims from the activists of just a few years ago that countries who embrace renewable energy would have an economic boom. Even today there are claims that renewable energy is as cheap and some say cheaper than coal. I’m sure people in Great Britain remember all too well the promise that renewable energy would cut their power rates in half. Now the truth is coming in along with the bills for renewable energy. Even on a smaller scale renewable energy is more expensive. Where I live most electricity comes from hydro power, fossil fuels, and some nuclear. The mandate to use more renewable energy (not hydro) has increased my power rate by 15%.

    It is quite clear man’s emissions are not driving global warming, and even if they were it would be to an okay level. Therefore there is no need to burden our citizens with expensive and unreliable energy.

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