AES 2018 Highlight: How renewables can lower the cost of energy in AustraliaPosted on September 20th, 2018 in Media Releases
Renewable energy has been a talking point for years now but with the current costs and efficiency of solar panels, as well as Australia’s high potential for solar power, it’s now a reality to start progressing. Not only will this relieve our reliance on coal and other fossil fuels, it can also lower electricity bills for everyday Australians.
Speaking at the 2018 Australian Energy Storage Conference and Exhibition, Sanjeev Gupta, chairman of the GFG Alliance, talked about the current high costs of energy in Australia and how we can look around the world for ways to lower those prices in an environmentally-sustainable way.
High energy costs in Australia
Energy costs in Australia are among the highest in the world. According to the International Energy Agency’s (IEA) 2018 World Energy Prices report, residential electricity prices in Australia are close to US$200 per MWh. This is twice the price of electricity in Canada, around 50% more than in the USA and far beyond the prices of other energy-rich countries such as Saudi Arabia and Russia. In Turkmenistan, the government fully subsidises residential electricity.
On top of this, a CME report shows that from 2002 to 2007, residential energy prices remained stable in Canada, the EU, Japan and the USA, while they rose around 40% in Australia. Not only is it expensive here, it’s getting more expensive. Gupta says the real issue is that while energy costs are rising, so is energy use.
He said, “Australia is one of the highest energy cost countries in the world and, at the same time, energy consumption in Australia is expected to grow. If there is more industrial investment, the consumption of energy will actually grow much faster.”
“On the one side prices are going up; on the other side consumption is going up. This is not a pretty picture unless there is a solution applied to this problem.”
Solar potential in Australia
It comes as no surprise that Australia is a sun-rich country with huge potential for solar energy. According to ARENA, Australia receives enough solar radiation to cover the nation’s annual energy usage 10,000 times over, however 2016 statistics show that solar only makes up 3.3% of energy creation in Australia.
Gupta looked at how other countries are running solar projects and sees it as an affordable way to scale up Australia’s production, and perhaps change the way we think of the energy market. He said, “Here we have the best solar conditions in the world to make energy. Solar is already one of the cheapest forms of energy in many parts of the world. In the Middle East, in India, you see prices which are extraordinarily low, and what it needs is largescale investment and very low cost-to-finance.”
“If you have largescale investment, large projects, and you amortise that investment over an appropriate period of time – 25 years, 30 years – even now some of the new panels can last. If you amortise that over a long period of time and you apply cheap funding, you can get very, very low prices for energy, significantly lower than Australia is even dreaming of today.”
“As the world of energy evolves it will be less and less grid dependent. It’s what telephony did, what mobile phones have done to the communication world. In India, now 80-90% of the telephony is done through mobile phones and not landlines, because you don’t need to invest in those large grids anymore. So, what is there will be used, but going forwards there will be more and more investment in off-grid solutions.”
By shifting our focus to renewable energy, Australia can quickly, easily and affordably make the switch to being a solar nation, which has benefits for everyone in the country.