Source: AGL economists Paul Simshauser and Tim Nelson for CEDA

Renewable Power - levelized cost of energy (LCOE) 

The International Renewable Energy Agency, IRENA, analysts found that depending on location, and assuming a uniform 10% cost of capital, the weighted average LCOE for:

Feb 2012 prices

A new analysis from research firm Bloomberg New Energy Finance has concluded that electricity from unsubsidised renewable energy is already cheaper than electricity from new-build coal and gas-fired power stations in Australia.

The modeling from the BNEF team in Sydney found that new wind farms could supply electricity at a cost of $80/MWh –compared with $143/MWh for new build coal, and $116/MWh for new build gas-fired generation.

Renew Economy

Average annual price trend in residential electricity  – 2005-2011

Source: Submissions to the Senate Inquiry into Electricity Prices,

http://reneweconomy.com.au/2012/solar-insights-why-pv-is-cheaper-at-the-socket-71910/pv-costs

The yellow section of the bars is the fixed price charged by the power companies. As PV becomes a threat they will raise this to make PV uneconomic and get us to pay for their overinvestment in transmission lines. By then battery storage will hopefully become economic so we can go off grid.

Source: EUAA

2011-12  Electricity prices  NSW 2012

Our power price is made up of:

 The cost of obtaining new customers, finding them, advertising and offering discounts, is $192.43 each in NSW. This cost is  passed on to all consumers – and given that the “churn” rate in the industry is 20 per cent – that is one-in-five customers changing retailers every year – it seems that electricity customers are paying more for the cost of signing up their neighbours than they are for green energy schemes.  Ref

Queensland average electricity demand, and available supply

This chart shows how the price of electricity in Queensland has changed as the coal fired capacity has increased. $30/MWh is 3c/kWh. The predictions of future demand have been completely wrong and too many coal fired power stations have been built. Demand has reduced due to high retail price, increasing energy efficiency, and the installation of rooftop PV.

CEDA reccommendations

Australian Electricity Market Recommendation 1

•  The regulatory framework for electricity metering should be amended to introduce competition for metering services. Such an outcome would promote
faster adoption of new smart metering technology;
•  Immediately deregulate electricity prices and allow for time-of-use pricing at
both the network and retail level (this pricing already effectively exists at the
wholesale level through the operation of the NEM); and
•  Governments and industry should develop a comprehensive education campaign for electricity consumers aimed at providing information about why
electricity prices are rising and why reducing peak demand is in every customer’s interests. Report

CEDA = Committee for Economic Development of Australia

Who is CEDA

CEDA's expanding membership includes around 800 of Australia's leading businesses and organisations, and leaders from a wide cross-section of industries and academia. It allows us to reach major decision makers across the private and public sectors.
CEDA is an independent not-for-profit organisation, founded in 1960 by leading Australian economist Sir Douglas Copland. Our funding comes from membership fees, events, research grants and sponsorship.