By 2025 Renewables Will Power 67 Percent Of South Australia

Declining renewables and energy storage costs will increasingly squeeze out gas-fired generation in South Australia as early as 2025, a joint research report conducted by Wood Mackenzie and GTM Research shows. The South Australia experience is noteworthy in a global power mix set to increasingly shift to renewable energy. South Australia retired its last coal plant in 2016 and is projected to have installed renewable energy capacity exceed its peak demand by 2020.

By 2025, wind, solar and battery costs will fall by 15 percent, 25 percent and 50 percent respectively. By then, renewables and batteries could offer a lower cost alternative to combined-cycle gas turbine plants, which are commonly used to manage base load power generation in South Australia. Meanwhile by 2035, renewables and batteries will provide a commercial solution for both base loads and peak loads. As a consequence, gas will increasingly be used just for emergency back-up.

One determining factor is the rate with which battery charging costs declines. By 2025, we expect battery charging cost to decrease as off-peak prices will gradually be set by excess wind generation. Battery storage then becomes a potential solution for managing peak loads,” said Bikal Pokharel, principal analyst for Wood Mackenzie‘s Asia-Pacific power and renewables .
By 2025 it’s expected that 67 percent of South Australia’s power capacity will come from renewables. Gas demand in the power sector will then decline by 70 percent.

Currently, South Australia’s peak loads are managed by open-cycle gas turbine (OCGT) plants. But by 2025, battery storage would be cheaper than OCGTs in managing peak loads even at gas price of A$7/mmbtu. OCGTs would then be relegated as emergency back-ups.”