Contrary to former PM Tony Abbott, who argues that pushing renewable energy onto the grid under the Renewable Energy Target (RET) has made power costly and unreliable, rapidly falling prices may now mean that building more wind and solar is the key to bringing wholesale electricity prices down.
That offers the tantalising prospect that Australia can meet the energy "trilemma" – restoring affordable and reliable energy and meeting the nation's commitments to reduce greenhouse gas emissions – with a mix of wind, solar, gas, storage and "demand response". Demand response offers customers incentives to curb their demand and send energy from solar panels, batteries and smart appliances when demand spokes, helping to avoid blackouts.
AGL Energy has outlined such a future in its plan to replace the ageing Liddell coal power station in the NSW Hunter Valley. But Prime Minister Malcolm Turnbull remains unconvinced and deputy PM Barnaby Joyce is openly hostile.
There are still obstacles to financing a 25-year project like a wind or solar farm without subsidies. And wind and solar power need to be backed by dispatchable capacity that can be turned on and off at will – which will be increasingly costly as penetration rises and drives out baseload coal power.
Still, the dramatic shift in debate from only a few months ago – when Mr Turnbull canvassed building new coal-fired power stations – shows how swiftly energy markets are changing.
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