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Renewable joy

However, an oversupplied electricity market has made it difficult for industry to make investment decisions on new fossil fuel plants, while renewable energy projects continue to benefit from government incentive schemes.

Consequently, renewables account for all of the estimated $5.5 billion the industry has now committed to invest in new projects. With a planned capacity of 3.7 gigawatts, these 18 projects could add around 6% to the existing installed capacity in Australia.

With a further 85 major projects at the feasibility stage, another $30 billion in estimated capital expenditure are in the investment pipeline.

Again, almost 90% ($26 billion) of this potential investment would stem from 74 renewable projects.

Adding to this are three renewable projects that were recently completed (since October 2014).

Taken together, there are 446 projects at feasibility to committed stage of development that could provide 24 gigawatts in additional power generation capacity. Of this, 84% would be from renewable projects.

As a result, in Australia wind and solar could become cost competitive with fossil fuels by 2030.

The CO2CRC report, which had input from more than 40 organisations, assessed the cost of a broad range of technologies over their life cycle, including coal, natural gas, solar, wind and nuclear.

It also determined the costs associated with supporting technologies, such as carbon capture and storage options that could either be retrofitted to existing power plants or be used as part of new projects.

Assessed were also emerging options of storing renewable power, including battery based systems, renewable energy converted into pumped hydro energy, and the thermal storage of solar energy.

To compare the cost of power generation technologies, the report determined their Levelised Cost of Electricity (LCOE), which takes into account current and projected capital costs, operation and maintenance costs, and detailed performance data.

LCOEs can be used to compare technologies with very different cost profiles, but it is worthwhile noting that the measure has limitations. Thus, it does not capture how these technologies contribute to the system, including their capacity to provide baseload power or their relative flexibility in response to changing power demands. LCOEs also may not adequately account for costs associated with integrating intermittent renewables into the electricty system, a focus of current research by the CSIRO.

According to the report, traditional baseload technologies provide at present the most cost-effective energy options, with new build natural gas combined cycle and supercritical pulverised coal plants producing the cheapest electricity - at a levelised cost of around $80 per megawatt hour.

Wind power, the lowest cost renewable low-emissions technology, has LCOEs averaging around $100 per megawatt hour (MWh), and the report's analysis shows that for current wind technology to be cost-competitive with black supercritical coal it would require a carbon price environment of at least $30 per tonne of CO₂-e.

However, forward looking to 2030, the LCOEs of all investigated power technologies are forecast to fall, but especially those of less mature technologies.

For example, the global wind industry is trending towards larger turbines with taller towers and larger blades, and this is expected to achieve greater economies of scale and better use of available wind resources.

For more mature technologies the scope of such improvements is limited, and the report forecasts that this will lead to a convergance in LCOEs across most technologies over time.

As a result, by 2030 wind and large-scale solar options will become cost-competitive with established fossil fuels based technologies, with LCOEs set to then range between $50 and $100 per MWh.

The report also assessed nuclear energy, the use of which remains a contentious issue in Australia.

While not a renewable energy, nuclear electricty generation is considered to be emissions free, although this ignores that extracting the resource is highly emissions intensive.

However, it provides baseload power, a major advantage over conventional solar and wind options.

The report estimates the levelised cost of nuclear power generation at between $150 and $200 per MWh, which is comparable to the current LCOE of commercial solar technologies.

But this depends on Australia developing a mature nuclear industry, and even then the report forecasts that by 2030 the LCOEs of all assessed solar and wind technologies, including solar thermal energy combined with energy storage for on-demand electricity supply, will be significantly lower than is forecast for nuclear.

Another option for a low-emissions alternative to coal and gas is the capture and storage of carbon emitted from coal fired power plants.

The technology has been successfully demonstrated with the Callide Oxyfuel Project, to date Australia's largest low-emissions coal plant demonstration.

The project achieved almost complete capture of CO₂, as well as sulphur dioxide, nitrogen oxides, trace metals and particulates. However, post-combustion carbon capture technology, which can be either retrofitted or used as part of new plants, will substantially increase the levelised costs of fossil fuels power generation, and by 2030 range between around $100 and $200 per MWh.

It will also require the establishment of transport and storage networks involving pipelines, booster pumps, wells, storage site facilities and storage site monitoring. The costs associated with transport would then vary substantially depending on factors such as the distance of a power plant from the storage site.

Other options may become commercially viable over time - or their potential for Australia has already been mostly realised.

Around 45% of Australia's renewable power is from hydro-energy resources with more than 100 hydroelectric power stations operating in Australia. The nation's economically feasible hydro energy resource has already been harnessed.

Therefore, the CO2CRC report considers it unlikely that new large-scale hydropower projects will be deployed in Australia. Indeed, while the chief economist's major projects report lists four Hydro projects at feasibility or committed stage, these together would have a capacity of only 407 megawatt.

Other energy options include the use of the oceans, with Carnegie's Perth Wave Energy Project the most prominent example in Australia. But for wave energy projects the transition from concept to commercialisation remains slow and expensive. Even less developed are tidal and ocean current technologies.

Australia's geothermal energy resource potential has been frequently pointed out, although it is largely limited to hot sedimentary aquifers and enhanced 'hot rocks' geothermal systems, which are still in the pre-commercial stage of development.

The report notes that assessing technological advances in this area is difficult because of the uniqueness of each geothermal resource's local geology.

To date, the only commercially operating power plant in Australia is at Birdsville in Queensland, which uses hot water from the town bore and has a electricity generation capacity of 80 kilowatt.

Still, what the report demonstrates is that Australia has a plethora of options to produce electricity, and it is likely to need it.

As the report also emphasises, no single technology will be able to meet the needs of an increasingly complex electricity grid. Instead in future it will require combinations of technologies that will allow to flexibly match electricity supply with electricity demand, while also meeting tighter sustainability criteria than was necessary in the past.