Renewables industry 'making peaking generators obsolete'

30th Nov 2012

The development of renewable energy technology is beginning to have a large effect on power providers – making peak generators obsolete.

These are the words of Giles Parkinson, editor of Renew Economy, who said energy companies are starting to show signs they are anxious of how popular rooftop solar PV and other sustainable sources are becoming.

"Renewables such as wind and solar have a zero marginal cost of generation, so they got priority in the electricity 'bidding stack'," he stated.

"But the problem is not so much that they are shunting the cheapest forms of fossil fuel generation a few rungs up the ladder, they are closing the door on the super-expensive peaking generators that are no longer required."

And herein lies the issue, he said, as this is where many providers are making a lot of money.

So how do energy markets work in Australia? Giles said the Australian system is similar to methods in place all over the world.

Priority is given to the suppliers who can provide the lowest-cost energy. In the old days, this was brown-coal generators, with black-coal plants not far behind.

Unfortunately, while these facilities are fairly good at keeping on top of things when it comes to baseload generation – they drop the ball when demand peaks.

So when it's a really hot day, for example, and people flick on the air conditioners, they begin to struggle.

When this happens, suppliers resort to peak generating plants, which have fast response gas turbines to pick up the slack.

However, these only switch on when wholesale energy prices reach $150 megawatts per hour.

Essentially, this is a big earner for energy companies, Giles explained, and he cited the recent Energy White Paper as evidence.

The document claimed 30 per cent of revenues from the country's entire generation fleet comes is accrued within just 30 hours of the year.

"And that is then passed on to consumers, who pay an estimated 25 per cent of their bill to meet the 'critical' peak that last just 40 hours a year," he stated.

Because solar power and other renewables would not rely on this system, it makes a number of existing facilities redundant, while also removing the need to develop various other fossil fuel projects.

Parkinson's comments came not long after the Climate Commission highlighted the importance of renewables in Australia's energy future, adding that the country was the world's most prolific installer of solar power in 2011.

Posted Mike Peacock

All solar power news categories

Government Rebate & Regulations
Solar Power & Technology


More Solar Power & Technology

Australia to be a part of huge Asian renewable energy growth
SunPower steps up to make solar more affordable
Canberra makes strides toward carbon neutrality
GTM puts solar's massive growth in perspective
Examining Australia's falling solar PV rooftop prices
Australia's shift toward renewable energy picks up the pace
Australia shines at solar decathlon
University of Queensland tapped as lead researcher on massive solar project
100 per cent renewable energy is possible in 10 years, environmental group says
Climate Commission releases report on solar progress
Aussie government actually shows spine for solar power
Be gone, skeptics: One million solar installations and counting
Australia embarks on its greatest solar journey ever
Australia looks to solar thermal for commercial success
Solar power helps King Island reach 100% sustainability
Australians 'heavy supporters of solar power'
Mildura solar plant officially unveiled
Solar power trumps other renewables in Australian minds
Sunshine Coast solar farm "fantastic initiative"
Sunshine Coast cashes in on namesake with solar plans
Energy storage 'could maximise solar power utility'
Solar powered family car - a world first?
Code of conduct for solar installers in the works
'Stop punishing households' for solar PV
Australian solar companies 'adjusting well'
Australian mining 'next solar frontier'
"Rooftop revolution" underway across Australia
Global PV market emerging from sluggish period
Royalla solar farm receives final approval
Leadership challenge a "debacle" for Australian solar power
Solar power giving global renewables a helping hand
Australia's largest CPV solar power plant up and running
Renewable energy misinformation "staggering"
CEC: Don't underestimate consumer desire for solar
Setting energy efficient examples on TV
Solar PV brightening up household bills
World's largest solar powered boat on the move
Climate change is heating up
The global solar power shift
New solar tech win for NSW
Industry orgs praise City of Sydney solar efforts
Clean Energy Council supports Regional Renewables scheme
Asian nations emerging as PV leaders
Solar PV demand continues to grow
Regional areas of Australia to receive more renewables
Australia's significant renewable energy growth
Solar panel reprieve for Queensland
New funding for solar research
Find love with sustainable speed dating
New Victorian solar power deal
 To get your quotes, please enter your postcode: