Renewable Energy is Actually Cheaper than Coal and Gas in Australia
“The sun doesn’t always shine,” they say. “Renewable energy will never replace fossil fuels,” they say. Well, despite well-funded efforts to misinform and obstruct, THEY are wrong.
The United States’ heel-dragging notwithstanding, the rest of the world has high hopes for the power of renewable energy to meet our demand for both electricity and carbon limitation. Several leading nations have put their full effort behind the development of solar, wind and geothermal power, allowing them to pull far ahead of America in production.
You would think that falling behind in the energy race would have been enough to kick the U.S. into gear (we hate to be second place in anything) but alas, even international prestige is no match for our lust for money. That’s another sticking point that THEY like to harp on: “But fossil fuel is so much CHEAPER than solar and wind,” they wail.
Non-subsidized renewable energy is now cheaper than electricity from new-build coal- and gas-fired power stations in Australia, according to new analysis from research firm Bloomberg New Energy Finance. Go ahead and read that twice, I’ll wait. Yes, you read correctly, that means parity was reached without any kind of artificial propping up by the government.
Bloomberg New Energy Finance’s research on Australia shows that since 2011, the cost of wind generation has fallen by 10 percent and the cost of solar photovoltaics by 29 percent. In contrast, the cost of energy from new fossil-fuel plants is high and rising. New coal is made expensive by high financing costs. The study surveyed Australia’s four largest banks and found that lenders are unlikely to finance new coal without a substantial risk premium due to the reputational damage of emissions-intensive investments – if they are to finance coal at all.
Finally, a country that gets it. A country with plenty of thriving businesses, wealthy people and politicians, I might add. Yet, somehow, Australia has been able to see what the U.S. refuses to acknowledge: fossil fuels are the dying relics of the past, and to continue to subsidize them is to doom our economy to failure (not to mention all the life-threatening pollution).
“The perception that fossil fuels are cheap and renewables are expensive is now out of date”, said Michael Liebreich, chief executive of Bloomberg New Energy Finance. “The fact that wind power is now cheaper than coal and gas in a country with some of the world’s best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head,” he said.
What allowed them to leap ahead in the race to make renewables cost-effective? Well, aside from a delightful willingness to consider environmental health as an asset, the Gillard government’s carbon pricing scheme certainly didn’t hurt. The Australian program, forces big polluters to pay, literally, for the harm they’re doing to the environment. Since corporations can’t be expected to show compassion like a person (even though we protect their personhood in other ways) hitting them in the pocketbook has and will always will be the way to get them to act.
Similar schemes have been proposed in the U.S., but not surprisingly, our industry-controlled government wouldn’t hear of it. Still, states have moved forward on their own. If the California cap-and-trade program is even half as successful as Australia’s has been in driving down the price of renewables, you might see the idea surface again. And this time, it will have teeth shaped like dollar signs.
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