Independent energy research firm Bloomberg New Energy Finance has released a damning report on new ultra-super critical coal-fired power generation in Australia, describing it as “the most expensive form of new energy supply,” at more than three times the cost of renewables.
The BNEF research puts the Levelised Cost of Energy (LCOE) of a new ultra-supercritical coal-fired power station in Australia at $A134-203/MWh; significantly higher than the LCOE of new-build wind at $A61-118/MWh), solar $A78-140/MWh or combined-cycle gas at $A74-90/MWh.
The cost of coal with carbon capture and storage technology added, BNEF puts at $A352/MWh – or around three times the cost of wind or solar.
This meant, said BNEF, that building new coal in Australia would result in “substantially higher” electricity prices than we would see from a combination of wind, solar and gas – provided gas markets operate efficiently.
“New coal is made particularly expensive due to the substantial carbon, reputation, trading and construction risks the technology presents to an investor,” explains Leonard Quong, a senior associate with BNEF in Sydney and the report’s lead author.
“But even if the government were to completely de-risk coal by paying for the whole plant and guaranteeing an exemption from any future liabilities, the lowest LCOE that could be achieved is $A94/MWh, which is still well above wind, solar or gas.”
On emissions, BNEF’s research also found that new-coal is far from ‘clean’, with new ultra-supercritical plants found to have an emissions intensity of 0.76t CO2-e/MWh – around double that of combined cycle gas (0.37-0.46tCO2-e/MWh).
BNEF also addressed the Coalition’s argument that we need new coal generation because Australia’s grid “will need more synchronous base load power” as old coal generation is gradually retired.
It says the role of “inflexible, fossil-fuelled generation” will decrease in future, says the report, and instead will increasingly become a costly liability for power generators.
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