Renewables mean higher costs

We've been highlighting the energy policy issue for a while now.

Well, the numbers are in:

"Electricity price hike fuels trebling in profits for EnergyAustralia" - AFR 6 August 2018 ($)

"Power prices: EnergyAustralia reaps benefits of Hazelwood closure" - Herald Sun 6 August 2018 ($)

AGL and EnergyAustralia have reaped the benefit of higher wholesale electricity prices, with both citing the very same driver.

“Ever since the Hazelwood and Northern power stations were shut on short notice, families and small businesses around the country have had a hard time keeping the lights on and their energy costs under control,” EnergyAustralia managing director Catherine Tanna said.

EA's net profit hit $375 million for the six months to June, up from $129 million in the same period last year.

AGL's profit hit $1.587 billion, up from $194 from the previous year.

The Australian's Judith Sloan highlights the core issue in the below article (link $):

"Tell me anywhere in the world where a higher penetration of ­renewable energy has been associated with lower electricity prices."

We agree. Cheap electricity with high wind and solar power penetration does not exist. Anywhere.

The problem is the non-synchronous and intermittent nature of wind and solar. In short, it cannot produce electricity when and where it is needed. And at times it produces too much electricity in relation to demand. Peak solar production, for instance, ­occurs at 1 pm; peak demand is much later in the day.

Intermittency requires backup in the form of dispatchable power. Gas has been relied upon to play an increasing role here in Australia following the closure of coal power stations. The problem with that is, unlike the abundance of cheap gas in the USA, Australia's gas supplies have tightened, making it more expensive, and adding to the wholesale cost of electricity.

The problem comes back to the energy trilemma:

Reliable, affordable, low emissions: pick any two.

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