Last week Bloomberg New Energy Finance had one of those silly "wind cheaper than everything else" articles that appear from time to time.
Unsubsidised renewable energy is now cheaper than electricity from new-build coal- and gas-fired power stations in Australia, according to new analysis from research firm Bloomberg New Energy Finance.
This new ranking of Australia’s energy resources is the product of BNEF’s Sydney analysis team, which comprehensively modelled the cost of generating electricity in Australia from different sources. The study shows that electricity can be supplied from a new wind farm at a cost of AUD 80/MWh (USD 83), compared to AUD 143/MWh from a new coal plant or AUD 116/MWh from a new baseload gas plant, including the cost of emissions under the Gillard government’s carbon pricing scheme. However even without a carbon price (the most efficient way to reduce economy-wide emissions) wind energy is 14% cheaper than new coal and 18% cheaper than new gas.
We now know from bitter experience that claims of this kind are usually feature one of a handful of magic ingredients that give the answer required:
- use of levelised costs
- heroic assumptions about gas and coal prices
Climate Spectator - a site that I believe is an upholder of the IPCC consensus - has rather taken the Bloomberg article apart showing that the second bullet is the favoured option:
In terms of wind being cheaper than combined cycle natural gas, the key assumption behind that conclusion is that new gas contract prices will rise from the $4 per GJ that most power plant are paying today, to $12 per GJ for new plant.
Bloomberg's baloney is so bad that even their allies are appalled.