Wind will match fossil electricity by 2020
MELBOURNE, Australia, 2004-07-21 (Refocus Weekly)
The cost to generate electricity from wind turbines will rival the cost of power from fossil fuel facilities by 2020, if government increases its targets for renewables.
“The results from government and industry sources in the USA, Europe and
Australia are all forecasting ongoing price declines for wind energy of between
30% and 50% over the next 15 years,” Karl Mallon, co-author of ‘Cost
Convergence of Wind Power & Conventional Generation in Australia.’ The
report was produced by the Australian Wind Energy Association to review future
costs for power from wind, coal and natural gas sources.
“With continuing economies of scale in Australia, wind projects installed in
2020 can expect to be cost competitive with fossil fuel energy supplies,” but
he warns that the domestic wind energy industry will have met the current
Mandatory Renewable Energy Target for 2010 by 2007, “so there will need to be
a substantial increase the MRET target to stay on track.”
The current cost difference for generate In Australia is “significant” with
coal as low as 3.5˘, gas at 4˘ and wind at 8˘/kWh. However, this gap is
steadily narrowing, the report notes.
Provided that growth of the wind industry keeps up with international levels,
Australia can expect the price of wind to overlap with gas between 2008 and
2016, and start to overlap with coal from 2016 on, with wind prices continuing
to drop after that. Half of the cost reductions will come from industry
experience in project development, regulation and financing.
“This report highlights basic economics: when you buy something in bulk, it
costs less,” says Libby Anthony of AusWEA. “If we commit to more power from
renewables like wind energy, we will keep driving down the costs until we
compete head on.”
The report provides a clear rationale to the federal government to substantially
increase MRET because the incremental costs for wind energy will continue to get
smaller, she explains. “For an industry with $8 billion worth of projects on
the table in regional Australia, all this government talk of cash give-aways is
of no interest; we need a solid renewable energy market; we need an increased
MRET,” she adds.
“Unless MRET is increased, this industry will come to a halt in 2007, it is
that simple,” she says.
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