Judith Sloan, Contributing Economics Editor to the Australian, has a brilliant op-ed in the paper today (see Energy price reveals folly of renewables) criticising policies targeting renewable energy, following the wholesale electricity price spike that occurred in South Australia last week:
“What is clear is that overdevelopment of variable generation using renewable resources is a recipe for higher prices and lower than expected reductions in emissions because of the increasing costs of ensuring system stability and reliability.
Feasible storage options are down the track and, in any case, likely to be expensive.”
The high cost of renewable energy is likely to be one reason that energy giants such as BP are forecasting that, while renewable energy will grow strongly over the next two decades, it will not come to dominate power generation (see chart below based on BP Energy Outlook data).
I have previously questioned the wisdom of the Queensland Government’s 50% renewable energy target (Qld Renewable Energy Taskforce asked to achieve impossible 50% target), and last week’s electricity price spike in SA makes me even more confident that the policy should be reconsidered. Indeed, it probably will be reconsidered as the high cost of the policy becomes apparent.