Ben Heard: “New wind power at low penetrations cheaper than new baseload fossil in Australia”

Ben Heard is the prime mover behind Zero Carbon Options and the proprietor of the reliable Decarbonise SA. Recently Ben did a great job taking apart a misleading Bloomberg report headline. 

(…) This headline comes from new analysis from research firm Bloomberg New Energy Finance  who have foundelectricity can be supplied from a new wind farm at a cost of AUD 80/MWh (USD 83), compared to AUD 143/MWh from a new coal plant or AUD 116/MWh from a new baseload gas plant’.

This may have caught people by surprise, not just that the wind is cheap(ish) but that the new fossil is costly.

But if you have already spotted the flaw, you get a star. This analysis, and the breathless headline accompanying it, are a great demonstration of how to be correct and irrelevant all at the same time.

These figures compare the cost of electricity production between:

  • Marginal costs of introducing incremental new wind, which will be intermittent with capacity factors around 30%
  • Marginal cost of introducing new modern coal, which would be baseload and quite large, with potential capacity factors above 85%
  • Marginal cost of introducing new baseload gas, which would be combined cycle plant, again quite large, again with potential capacity factors above 85%

All three produce ostensibly the same product (electricity), but they do not provide the same service. A new wind farm, with the well understood intermittency does a poor job of meeting our requirement for baseload, being the minimum electricity demand required at all times.

If you want to compare these sources fairly, you need to set them the same challenge, namely that of providing baseload.


Read Ben’s complete post and don’t miss the comments by informed regulars at Brave New Climate. E.g., I loved Robert Wilson’s quip comparing wind to real baseload power: 

It’s like train taking me half to London, but costing me less than one that goes the whole way.