The potential for renewable energy to provide baseload power in Australia

Research Paper no. 9 2008–09

Stewart Needham
Science, Technology, Environment and Resources Section
23 September 2008
Updated 4 August 2011


Executive summary

  • Electricity generation in Australia is dominated by coal-fired power stations, which contribute one third of Australia’s net greenhouse gas emissions. Significant change in the coal-fired energy sector will be required to substantially reduce emissions. The options are to introduce ‘clean coal’ technologies including geosequestration of CO2, and to substitute coal-fired power stations with renewable energy such as solar, wind, biomass, wave and geothermal. Moving to lower emission feedstock (e.g. brown to black coal; black coal to gas) would produce only a relatively moderate reduction in emissions.
  • Coal is used to fuel ‘baseload’ power stations, which run continuously and provide reliable continuous power outputs. Renewables are criticised as being unsuited to providing baseload power because of their intermittency.
  • The technology is already available for generating reliable continuous electrical power from some renewables (e.g. biomass). However, the current power capacity is small. Further development in the renewables sector is required before any significant level of substitution of coal-fired power can take place. Research and development into solar thermal, photovoltaic, ocean and geothermal energy indicates very promising prospects for reliable and continuous power from renewables within the next two to four decades.
  • A key to supplanting coal and gas-powered generation will be the development of storage media able to capture intermittent energy and supply controlled output to match demand. Promising technologies are at the demonstration level. The more decentralised distribution of renewable resources compared to fossil fuels will require reconfiguration of the national electricity grid to better integrate power inputs from more variable input sources and reduce transmission losses from the more remote renewable sites, especially geothermal.
  • Overall, the cost of electricity from renewables is significantly higher than for coal and gas. However this differential disappears when the costs of carbon capture and sequestration are included in the price of coal and gas-based generation.
  • Provided a suitable policy framework is in place, there appears to be no technical or financial impediment to renewables providing about 50 per cent of all Australian electricity demand by 2040. In the longer term, current research and development suggests that a low-carbon electricity sector is attainable with total substitution of coal, with gas filling the role of change agent.



Defining baseload power

Why baseload is misleading as a supply-side term.

Australia’s current and projected electricity needs

Current and projected mix of resource inputs for electricity generation

Non-renewable sources of electricity supply


Challenges faced by the coal-fired energy sector


Renewable energy sources for power generation

Cost of electricity from renewables versus coal and gas

Limitations of renewable energy as suitable sources of reliable power

Solutions to the intermittency issue

Timeline for implementation of renewable energy for power supply




This paper was reviewed by Mike Roarty, Gerry Morvell, Peter Yeend, Bill McCormick, Richard Webb, Les Neilson, Julie Styles and Roger Beckmann, all of whom made many useful suggestions to improve its balance and coverage. Gerry was able to provide valuable insights into the workings of the National Energy Market; helped inform me on the nuances surrounding the claims and counter-claims of the supremacy of fossil fuels in electricity generation; and offered conservative counsel on some of the more ambitious claims put forward by supporters of the emerging technologies in the renewable energy generation sector. Others provided comments which have improved the coverage of economic, technical and political issues as well as the readability and presentation of the paper. Thank you all.

Glossary of abbreviations and technical terms


Australian Geothermal Energy Group.


The minimum power demand; so-called baseload power stations in Australia generally operate at higher outputs than the minimum level of demand so as to meet most of the intermediate load and even some of the peak load.


Australian Business Council for Sustainable Energy.


British Thermal Unit, a standard measure of energy based on the amount of heat required to increase the temperature of a pound of water 1o Fahrenheit. Equals 1 055.05585 joules.


The maximum output level of a generating plant. Actual output is generally lower, particularly where the energy source such as wind is intermittent.


Carbon dioxide – a colourless, odourless and non-flammable gas. It is produced by the combustion of carbon-containing fuels and is the dominant greenhouse gas by volume and impact. As CO2 equivalent, it is used as a standard unit for comparing emission levels of the different greenhouse gases, and as a measure for assessing carbon offsets.


Carbon capture and storage. The ‘carbon’ usually refers to the gas carbon dioxide.


The name given by Renewable Energy Holdings Plc (UK) to a patented device to create energy from wave power and to desalinate seawater; named after a hideous aquatic monster, the daughter of Gaia and Pontus in Greek mythology.


Cooperative Research Centre.


Events or actions which are completed in 24 hours and are repeated every 24 hours; in this instance applied to the level of demand or load for electricity.


Geological storage of carbon dioxide requiring its injection into underground geological formations. Declining oil fields, saline aquifers, and unminable coal seams are potential storage sites.


Gigajoule: one billion joules (1,000,000,000 joules or 109 joules).


Gigawatt of electricity, 109 watts, 1 billion watts, or 1,000,000,000 watts of electrical energy.


Gigawatt hour: the amount of energy equivalent to a power of 1 gigawatt running for 1 hour.


Hot fractured rock as a source of geothermal heat for power generation (also known as ‘hot dry rock’).


Compounds containing hydrogen and carbon formed by the decomposition of plant and animal remains. These compounds include coal, oil, and natural gas.


International Energy Agency (of the OECD).


The Geothermal Implementing Agreement established by IEA to encourage cooperation on geothermal energy research and technology. Its four different research areas are Environmental Impacts of Geothermal Development, Enhanced Geothermal Systems, Advanced Geothermal Drilling Technology and Direct Use of Geothermal Energy.

Intermediate Load

The range from base load to a point between base load and peak. This point is variously applied as the midpoint, a per cent of the peak load, or the load over a specified time period.


Kilovolt, 1,000 volts.


Kilowatt, 1,000 watts.


Kilowatt hour: a measure of electricity; 1 kilowatt (1,000 watts) of power expended for 1 hour. One kWh is equivalent to 3,412 Btu.


Megatonne, 1,000,000 tonnes.


Multi-tower solar array.


Megawatt, 1,000,000 watts.


One thousand kilowatt-hours or 1 million watt-hours.


National Energy Market.


National Electricity Market Management Company.


National Solar Energy Centre, Newcastle NSW, operated by CSIRO.

Peak load

The maximum load of electricity demand during a specified period of time.


One petajoule is 1015 joules – the joule is the standard unit of energy in electronics and general scientific applications. One petajoule equates to 280 gigawatt hours, and approximates the heat energy content of about 43,000 tonnes of black coal or 29 million litres of petrol.




Solar thermal technologies.


Terawatt annum: one trillion watts (1,000,000,000,000 W) of energy for one year.


Terawatt hour: one trillion watts (1,000,000,000,000 W) of energy for one hour.


Uranium Mining, Processing and Nuclear Energy Review Taskforce – a Commonwealth Government review panel which released its final report on 29 December 2006.


Most of Australia’s electricity is generated from coal-fired power stations. The role of renewable energy in present and future energy scenarios is commonly portrayed as marginal owing to the perception that it is often generated in remote areas distant from major centres; and that it is mostly intermittent in nature and cannot deliver a reliable and continuous level of power to match continuous demand, or ‘baseload’. However, not everyone agrees with these perceptions about renewable sources. The conception that renewables are unsuitable for providing baseload power is termed by some ‘The Baseload Fallacy’.[1] Those who hold this view claim   that some renewables are indeed able to produce reliable continuous power. They suggest that more use can be made of the similar profiles of diurnal output levels from solar-based renewables and the daily electricity demand curve; and that integration of a distributed system utilising a variety of renewable energy sources will have the capacity to provide reliable power on a continuous basis.

This paper investigates the degree to which renewable sources of generation can deliver power, including baseload power. Technological developments which may influence this availability are also briefly reviewed.

As coal will remain the world’s main feedstock for electrical energy into the foreseeable future, the prospect of increasing the efficiency of energy production from coal, and the reduction of CO2 emissions, is also examined.

Defining baseload power

Baseload is the term commonly used to describe the amount of electricity demand required on a continuous basis, i.e. 24 hours a day all year round, to power continuous industrial processes, and essential services such as traffic lights, hospitals etc. Baseload represents the minimum continuous level of demand in a grid system, and thus requires reliable supply sources without the risk of output dropping below the baseload level.

The demand for electricity fluctuates during the day and from season to season. Periods of demand above baseload are designated intermediate and peak load (Figure 1).

In some quarters, the terms baseload, intermediate and peak load have been applied on the supply side of the energy market to describe power stations with characteristics claimed to most efficiently deliver base, intermediate and peak demand. For example, coal-fired power stations are sometimes described as baseload stations owing to low cost generation, efficiency and safety at set outputs. Typically these plants are large, provide most of the power used by a grid, and are slow to fire up and cool down. More responsive types of power plants such as combined cycle plants or combustion turbines, which produce electricity at a higher unit cost, are termed peak load plants. These can be brought into action at short notice, to respond to sudden increases in demand. A baseload generator on the other hand takes a day or more to reach an efficient operating state and is less able to vary output to match demand. Whilst a smaller gas-fired plant may be more energy-efficient in terms of energy produced per unit of carbon, a larger coal-fired plant is able to produce power at a lower unit cost because of the economy of scale, even though it is less energy-efficient in terms of converting chemical energy to electricity.

Figure 1: Load curve for Victorian electricity grid

Load curve for Victorian electricity grid

Shown here is the typical power demand (or load) by time of day, in summer and winter, with contributions from baseload, intermediate, and peak load generation. Baseload is about 5100 MWe; total capacity must allow for at least 50 per cent more than this, with intermediate load normally supplied by gas-fired plant, and peak loads typically supplied by hydro and gas turbines. Source: Source: World Nuclear Association, accessed on 6 July 2011.

Total annual demand for the eastern Australian States is divided almost equally between the peak and offpeak periods, but only 9 per cent of the peak period electricity consumption is generated using peak load technologies – i.e. 91 per cent of all electricity consumption above baseload requirements was generated using black and brown coal.

In order to reduce the degree of fluctuation between high and low demand, lower pricing through ‘off-peak’ electricity rates (mainly for domestic hot water) is used to move some daytime demand to lower demand periods. This helps to even out the diurnal demand curve, but also reflects inefficiencies in baseload technologies which have limited capacity to ramp production (and inputs) up or down to match demand fluctuations. This strategy has been criticised for moving consumers to inherently less efficient use of electricity and for artificially inflating the baseload requirement.[2] There may be a prima facie case for improved overall efficiency by bringing the Australian electrical generation mix between conventional inflexible baseload systems (i.e. coal), and more flexible systems such as gas, hydro and renewables, closer to the 50:50 ratio ‘rule of thumb’.

Why baseload is misleading as a supply-side term

The observation that supposed baseload coal-fired power stations supply 91 per cent of all electricity consumed above base load requirements underlines the fact that the term baseload has no relevance in discussion of the supply of electricity. Assessment of the viability of electricity supplied from any source needs to be conducted in terms of the essential requirements for reliable and continuous power, with flexibility of output to match diurnal and seasonal fluctuations in demand.

This is in fact the basis of the Australian National Electricity Market (NEM), where all power supplied to the market contributes to forecast demand.[3] The Australian Energy Market Operator (AEMO, which on 1 July 2009 replaced NEMMCO – National Electricity Market Management Company – as the manager of the national electricity grid) forecasts demand at five minute intervals for every day of the year and generators are able to ‘bid-in’ to provide electricity to the network. As these forecasts are available to all market players, generators can, and do, plan and vary supply to take advantage of best prices. NEMMCO does however have rules to ensure supplies are maintained at all times and that gaming for high prices does not distort the market

All electricity, irrespective of source, contributes to both base and peak demand. Those generators that claim to be ‘peak loaders’ are also in fact making statements about sending their electricity to the market when the demand – and prices – are high; they could generate and send power whenever they like. Equally the popular belief about ‘inflexibility’ of coal fired power generation to provide peak power is not true. Although coal fired boilers need to be maintained at relatively constant operating temperatures and are therefore operated on a continuous basis, the production of steam and generation of electricity can be, and is, varied so that power generators can provide power to the market to take advantage of higher prices during peak periods – hence the provision of 91 per cent of eastern Australia’s intermediate and peak demand being met by coal. Coal-fired generators have always maintained capacity to meet peak demand – and forecasting in the NEM has made this more effective.

Further debate about sources of electricity generation should therefore focus on reliability, continuity and flexibility of generation, within the context of the competitive bidding formulation of the NEM. The term baseload does not appropriately encapsulate the relevant issues.

Australia’s current and projected electricity needs

In 2005-06 Australia's power stations produced 257 terawatt hours (TWh) of electricity (243 TWh public supply plus 12 TWh for off-grid producers), and output is growing at about 3.3 per cent per annum.[4] Of this gross amount, about 18 TWh is used by the power stations themselves, leaving 237 TWh actually sent out (net production). A further 17 TWh is lost in high voltage transmission and 9 to10 more in energy sector consumption, leaving 210 TWh for final consumption (or 187 TWh apart from aluminium production).[5]

Demand is projected to rise to 415 TWh by 2029-30, an average annual growth of 2 per cent.[6] This projection accounts for policy measures in operation in 2007, but not for the current Government’s proposed emissions trading scheme or increased renewable energy target.

Current and projected mix of resource inputs for electricity generation

In 2005-06, 54.5 per cent of total electricity production was from black coal, 21.1 per cent from brown coal, 15.0 per cent from gas, 1.8 per cent from oil, and 7.6 per cent from renewables. Of the renewable power, 82 per cent was from hydro and the balance roughly equally divided between biomass and wind.[7] All baseload power was sourced from black and brown coal. Whilst gas, oil and hydro are significant contributors to intermediate and peak requirements, black and brown coal power is also used because total generating capacity from intermediate and peak generators is less than intermediate and peak power demand.

Using a ‘business as usual’ scenario, ABARE in 2007 predicted little change in the relative shares of electricity generated from fossil fuels and renewables through to 2029-30: wind, biogas and biomass were expected to account for most of the increase in electricity generation from renewable sources.

This modelling suggests that without external stimulation, future growth in the proportion of renewably sourced energy in Australia is likely to be slow. However, continued growth in the sector should be motivated by increases in fossil fuel prices and expansion of the Renewable Energy Target scheme (RET) announced in the May 2008 Budget with a target of 20 per cent share of renewable energy in Australia's electricity supply by 2020. The RET will guarantee a market for renewable energy by setting a target of 45,000 GWh of renewable electricity by 2020. Renewable electricity generation is expected to increase mainly in regional areas, and the relative cost of technologies is expected to become more competitive as the scale of their deployment increases. The government is providing funding in partnership with Australian industry to stimulate technology development across the sector, including photovoltaics, solar thermal, and hot fractured rock development. The RET will be phased out between 2020 and 2030, as Australia's proposed emissions trading scheme matures.[8]

Estimates of the possible growth of non-hydro renewables range from 23 per cent to 41 per cent of the electricity generation market by 2050, dependent upon modelling of different geopolitical scenarios relating to greenhouse gas abatement programs, and whether or not CO2 geosequestration is commercially applied.[9]

Non-renewable sources of electricity supply

World wide, the non-renewable resources of black and brown coal and uranium have evolved as the principal feed for electricity generation, generally owing to their ready availability, available technology, and relatively low cost of electricity generated. In some countries where the resources are available, renewables have developed into locally significant energy sources for continuous supply, including hydro, geothermal, biomass and wind. However, these installations are generally not at the same scale as coal and nuclear, which dominate particularly in the more heavily industrialised countries.

In the past, the choice of electricity generation technology was largely based on availability and cost. However, concerns related to global warming and climate change, and the large role played in greenhouse gas emissions by hydrocarbon-fuelled power generation, demand that in the future, environmental costs are factored in to the decision-making process. Low emissions will become a key performance indicator.


Coal is an extremely important fuel and will remain so in the near to medium term. Around 27 per cent of global primary energy needs are met by coal and 42 per cent of electricity is generated from coal. About 70 per cent of world steel production depends on black coal feedstock. Coal is the world's most abundant and widely distributed fossil fuel source. The US Energy Information Administration expects a 56 per cent increase in its use from 2007 2035.[10]

Although in Australia coal-burning is used overwhelmingly (93 per cent) for electricity generation, globally, the picture is a little different. Of the 11 billion tonnes of carbon dioxide emitted by coal-burning around the world each year, about 67 per cent comes from the use of coal in power generation. Therefore, coal-fired power generation accounts for about 27 per cent of the world total CO2 emissions of around 27 billion tonnes.[11]

In 2004, coal burning in Australia produced about 200 million tonnes (Mt) of CO2 equivalent emissions, or about 35 per cent of the nation’s total greenhouse gas emissions. About 180 Mt came from electricity generation plants, with the rest from steelworks, alumina plants and cement works.[12] Australia has one of the world’s highest percentages of electricity generation from coal, after Poland and South Africa.[13]

The present dominance of coal-fired electricity in Australia and its low cost make it clear that, under existing policy settings, coal will continue to be the principal feed for electricity in Australia for the foreseeable future.

Challenges faced by the coal-fired energy sector

Three challenges face the coal-fired energy sector, each of which has ramifications for its market share in Australia’s future energy mix.

Suitability as a source of intermediate and peak power

Large coal-fired power stations are relatively inflexible in their power output, which means that there is limited ability to vary output to match short-term demand fluctuations, such as the diurnal variations evident in Figure 1. Pricing mechanisms such as off-peak power have been used to smooth out the diurnal demand curve and so reduce the cost inefficiencies inherent in generating electricity in excess of demand. Responses to the availability of cheaper electricity have been mainly the heating of hot water during the night, and extension of industrial activity beyond normal 0800 – 1700 hr activity.

In contrast, output from solar power and to a lesser extent wind power, tends to emulate the diurnal demand curve and offers a potentially less distorted match between energy supply and intermediate and peak load demand.

Improved efficiency

Extraction of energy from coal by burning only releases about 30 per cent of the coal’s intrinsic chemical energy,[14] and so it would appear that there is potential to develop more effective ways of generating power from coal. Greater energy productivity would reduce the amount of coal required and hence improve cost-efficiency and reduce CO2 and the production of other wastes – utilising so-called ‘clean coal technology’. Research is being conducted into improving the thermal efficiency of power stations, and pre-combustion separation of feedstock components to reduce emissions.[15]

Greenhouse emissions

Conventional coal-powered plants have the highest greenhouse gas emissions of all power generation technologies (Figure 2), which compares emissions on a life-cycle basis. This includes, for example, emissions produced during extraction, processing and transport, such as venting of CO2 at the head of natural gas wells. However, Australia’s National Greenhouse Gas Inventory in 2006 found that coal mining and handling accounted for two-thirds of Australia’s so-called fugitive emissions (inadvertent emissions), with oil and gas production, processing and distribution accounting for the rest.[16] Worldwide, coal generates about twice the CO2 emissions of gas, despite having a similar share in the world energy supply. World average emissions are 919 and 389 grams per kWh of electricity and heat production from coal and gas, respectively. Australia emits 990 grams of CO2 per kWh of electricity and heat production from coal, and 627 grams per kWh from gas.[17]

‘Clean coal’ technologies promise to substantially decrease the level of greenhouse gas emissions, but resultant levels would still be about 10 to 100 times higher than for renewables (Figure 2; note that emissions from renewable energy power generation depend on the source of energy used in its production and operation – theoretically if this is also a renewable energy source the total emissions should be near zero, excepting situations such as emissions from drowned vegetation caused by construction of hydro systems).

There are small scale projects in operation and under development that capture CO2 for commercial applications. An example is the Victor Smorgon Group project in Victoria where CO2 is stripped from flue gases and used in an algal bioreactor; the algal mass is dewatered then processed to produce biofuel.[18] For the emissions from coal to be addressed adequately, however, much larger scale technologies are needed to capture CO2 and isolate it from the environment (carbon capture and storage or ‘CCS’ technology). Much effort is being focused on geosequestration, that is the injection of liquefied CO2 into geological traps such as exhausted gas and oil wells after capture and transport from the emission source.

Figure 2: Greenhouse gas emissions from various energy sources

Greenhouse gas emissions from various energy sources


Figure 2. Estimates of lifecycle greenhouse gas emissions (g CO2eq/kWh) for broad categories of electricity generation technologies, plus some technologies integrated with carbon capture and storage. Land use-related net changes in carbon stocks (mainly applicable to bio-power and hydropower from reservoirs) and land management impacts are excluded; negative estimates for bio-power are based on assumptions about avoided emissions from residues and wastes in landfill disposals and co-products. Source: IPCC Working Group 3, Mitigation of Climate Change; Special Report on Renewable Energy sources and Climate Change Mitigation; final release. Summary for policy makers, May 2011. Figure SPM8. accessed 20 July 2011

The practical application of geosequestration to achieve meaningful CO2 reductions appears to be several decades away.[19] The first Australian field trial for CO2 sequestration commenced on 2 April 2008: in which 100,000 tonnes of CO2 is being compressed and transported by pipeline to the Otway Basin in Victoria, to be injected into a depleted gas reservoir 2 km underground.[20] If successfully demonstrated, commercialisation of CO2 capture and storage is unlikely to commence until about 2020.[21] Some commentators suggest that the cost of developing and demonstrating the technology will be beyond Australia’s capacity to fund.[22] In this context it is pertinent to observe that the USA’s ‘Futurgen’ project, which aimed to develop and demonstrate the feasibility of commercialising carbon capture and storage, was mothballed in early 2008 as a consequence of cost which had tripled to $US1.8 billion. However, the Australian Government considers CCS to be one of the cornerstones of its approach to reducing CO2 emissions, and recently announced plans for a $100 million international carbon capture and storage institute to be hosted by Australia.[23]

The development, infrastructure and operational costs of CCS are expected to increase the overall cost of electricity by 25 – 50 per cent, to between 4.5 and 10 c/kWh.[24] Modelling of the capacity for CCS to cut emissions from coal-fired electricity generation between 1999 and 2100 in Australia suggests that:[25]

  • Distance between sources and sinks will limit its economic feasibility in NSW and SA;
  • Emissions will ultimately continue to grow under business-as-usual growth of the electricity industry with ‘added-on’ geosequestration (Figure 3);
  • Unless the efficiency of CO2 carbon capture and storage is close to 100% in each of the capture, transport and storage stages, long term reduction in annual emissions from geosequestration may happen only if the annual growth in coal-fired generation between now and 2100 is reduced to significantly less than that predicted to occur between the present and 2020; and
  • Whilst geosequestration may help in achieving longer-term emissions abatement, it is unlikely to be able to deliver the desired level of abatement without substantial assistance from energy efficiency, gas-fired generation and renewables.26] 

Figure 3: CO2 emissions from a coal-fired power plant with and without carbon capture and storage

CO2 emissions from a coal-fired power plant

Shown here are business-as-usual annual carbon dioxide emissions from coal-fired plant in Australia, with and without geosequestration, between 1999 and 2100 – 4 year moving average. H. Saddler, C. Riedy and R. Passey, ‘Geosequestration: what is it and how much can it contribute to a sustainable energy policy for Australia?’ Discussion paper 72, Australia Institute, Canberra, 2004.


Presently, 439 nuclear reactors operating in 30 countries have an installed capacity of about 370 GWe. In 2010, they generated 2,630 TWh, which is around 17 per cent of world electricity production.[27] The number of reactors under construction (33, with 26.8 GWe capacity), planned (94, with 101.6 GWe capacity) and proposed (222, with 193.1 GWe capacity), clearly indicate strong growth in the nuclear power sector. The majority of this growth reflects strong economic development (e.g. China alone accounts for more than one third of the planned and proposed reactors), but the desire to reduce greenhouse gas emissions is another reason – for example, there are new nuclear reactors slated for developed countries such as Japan and the USA.

Owing to Australia’s endowment in black and brown coal and the relatively cheap cost of electricity from coal-fired power stations, the use of uranium for electricity has until recently not been on the domestic agenda. However, recent concern over approaches to lowering Australia’s CO2 emissions has led to considerable debate on this issue – notably the House of Representatives Standing Committee on Industry and Resources report ‘Australia’s uranium – Greenhouse friendly fuel for an energy hungry world’[28] and the ‘Switkowski report’ for the Department of Prime Minister and Cabinet.[29] Both reports make a case for introducing nuclear energy into Australia, mainly to mitigate greenhouse gas emissions in the future. Nuclear power would be 20-50 per cent more expensive than coal without CO2 pricing, but roughly equivalent with ‘low to moderate’ pricing of CO2 emissions (See Figure 4). The Switkowski report describes nuclear power as ‘the least-cost low-emission technology that can provide baseload power and which is well established.’

Current disadvantages of nuclear power include investment and financing risks, long construction times compared with most other electricity-generating technologies, persistently negative perceptions, especially regarding the safety of nuclear waste disposal, and a possibility of accidents releasing harmful radiation. There is also a need to provide specialist regulatory agencies and detailed safety regimes. Opponents of nuclear energy consider that the full environmental costs, and the cost of disposal of high-level radioactive waste, are not factored into the claimed low cost of nuclear-sourced electricity. They also cite concerns over the danger of transporting either radioactive waste or nuclear fuel, the potential for long-term human health effects and ecosystem damage following accidental release of radioactive material from the power plant, and deliberate targeting of nuclear facilities by rogue elements.

Renewable energy sources for power generation

A wide range of technologies offer potential for energy generation from renewable resources. These include hydro power, biomass, wind power, solar power (photovoltaics and solar thermal), ocean energy, tidal power, and geothermal. Background information was recently gathered on these renewable resources by the House of Representatives Standing Committee on Industry and Resources.[30]

Key characteristics of the renewable energy sources reviewed in this paper are described here and summarised in Table 3.

Hydro power is a long-standing source of electricity generation using renewable energy, but its role in meeting demand for clean energy is severely limited by lack of suitable new sites for dam construction; community resistance to land flooding; and concerns that climate change may reduce flows and thus reduce the certainty of future energy supply. Worldwide, in response to these limiting factors, there is a move toward development of mini-hydro power systems that are applicable in smaller rivers and more distributed locations. In a recent innovation, a mini-hydro project has been developed in Victoria to utilise the energy in an existing water pressure reduction station between the mains and distribution water pipe systems.[31]

In Australia, hydro power is being used increasingly to meet peak load requirements owing to its inherent flexibility. Australia has about 100 hydroelectric power stations with 7,050 MW capacity providing about 16,000 GWh annually. A further 310 MW are either under construction or planned.[32]

Biomass as an energy source involves two different methods: burning vegetative material, and burning biogas (methane) produced by the breakdown of organic matter. Australia has about 808 MW of electricity generation capacity in total from biomass sources. Growth in this sector, together with wind power, is expected to account for most of Australia’s increase in electricity generation from renewable sources to 2030.[33] Bagasse – a by-product of sugar production – has been used in Queensland and northern NSW for 50 years for commercial power generation, contributing about 1 per cent of Australia’s electrical generation. Small amounts of energy are also produced by burning wood waste at some timber mills. Vegetative matter can be grown specifically to be burned directly to produce energy, or to make biofuels, but this is considered environmentally and economically inefficient as it would supplant other, more high-value forms of agriculture such as plantation timber or food cropping.

Biomass as biogas entails harvesting methane from the breakdown of organic material – principally human or animal sewerage, municipal rubbish, and waste from food processing. Installed capacity for biogas electricity production in Australia was 175 MW in 2006, having grown at around 78 per cent per year since 1995. Most of the capacity is at sewage treatment plants, which are considered highly cost-effective. Methane-powered generators at rubbish tips can provide dividends to authorities to offset garbage collection and disposal costs, and if operated at sufficient scale – such as at the Woodlawn Bioreactor near Canberra (utilising Sydney’s garbage) – can be commercially profitable. Improved waste management and incentives are required to reduce the cost of the electricity from as high as $80/MWh currently, to $50/MWh, in order to improve competitiveness.

Whilst the Australian Business Council for sustainable Energy (BCSE) has suggested that biomass electricity could increase to 10-17 per cent of Australia’s total electricity consumption by 2020, environmental and food equity concerns arising from a trend to increased agricultural production for bioenergy could limit this growth to utilisation of waste agricultural and forestry products, which may require further technological advances to increase energy conversion efficiency. Parallel development of biomass production for electricity generation, and biofuel production for petroleum substitution, would offer greater certainty to the agricultural sector.

Methane collected through drillholes

Methane is collected through a series of drillholes and pipes from Canberra’s two rubbish tips and from Sydney rubbish dumped into the old Woodlawn mine near Tarago. The gas is fed into small generators on-site, which produce about 27,500 MWh annually at the Canberra rubbish tips– enough to power around 4,000 homes. When fully operational, the Woodlawn operation will produce 20 MW, enough for around 20,000 homes. Sources:

Waste Management and Environment Media, From mine pit to powerhouse: Woodlawn is transformed, accessed 20 July 2011. Veollia Environmental Services brochure, Woodlawn Eco-precinct, accessed 20 July 2011

Wind power Total installed wind capacity in Australia is currently 817 MW, and has grown strongly in recent years (by 109 MW in 2006). This rate of growth has been assisted to a significant degree (and greater than other renewable technologies owing to wind’s relatively more advanced ‘technology ready’ status) through the setting of Mandatory Renewable Energy Targets by Australian governments. About 2,500 GWh is generated annually.[34] The wind energy industry suggests that another 10,000 MW could be installed in Australia, providing up to 10 per cent of the country’s electricity needs. Costs and efficiencies are improving, particularly as the size of rotors and turbines increases. The IEA anticipates that wind power technology will continue to improve and capital costs will decline with larger volumes of turbines produced. The trend towards larger rotors and taller towers is expected to continue, improving performance and reducing the unit cost of electricity. In the past 15 years costs have halved to about $70/MWh and could drop to about $40–$45/MWh by 2020. At the best sites, wind may become competitive with the cheapest fossil fuel resources by 2010. While the generating costs in good sites are quite close to the cost of conventional technologies, additional costs to cope with intermittency and grid integration tend to increase the generating cost of wind substantially.

Wind farm in NE Tasmania

The 140MW Woolnorth wind farm in NE Tasmania is Australia’s largest wind power site, comprising 62 turbines and producing enough electricity for around 70,000 homes.


Source: Woolnorth Windfarm

Australia is not particularly well-endowed with sites for wind farms, and development tends to be restricted to southern regions, which is where the windiest locations are. In addition, the ‘NIMBY’ (‘not in my backyard’) syndrome has caused some proposals for wind farms not to proceed. The risk of bird deaths has affected the final siting of some projects, and required special monitoring and mitigation procedures which appear to have reduced the general level of concern.

Wind can contribute to small community off-grid systems, as well as supporting remote end-of-grid consumers by improving stability and reducing transmission loss. The ultimate share of the national electricity market supplied by wind may be constrained by the wind’s intermittence, site limitations, and issues related to grid connection. Options for managing intermittency of power supply include reserve power plants; interconnection with other grid inputs; distributed generation; matching demand to the intermittent supply; and electricity storage. As the market penetration by wind power increases, the impacts of intermittency on the NEM will become more apparent and will require technical compensation. These costs are likely to be imposed on the wind generator, thereby increasing the cost of wind energy, reducing its competitiveness against other less intermittent sources, and ultimately capping wind’s market share. Therefore, growth beyond about 20 per cent of the market share may require major advances in management of distributed and intermittent power sources, such as developing reliable wind forecasting ability to pre-empt the effects of intermittency of supply; and by making the grid more flexible in its receipt of intermittent power.[35] The latter approach, i.e. development of an ‘intelligent grid’, will also be applicable to other intermittent renewable energy sources such as solar and tidal.

Photovoltaic (PV) technology transforms the energy of sunlight (solar photons) into direct electric current using semiconductor materials. The basic unit of this technology is a PV or solar cell. When photons enter the PV cell, electrons in the semiconductor material are freed, generating direct electric current. Solar cells are made from a variety of materials and come in different designs. The most important PV cells are crystalline silicon and thin films, including amorphous silicon.[36]

The amount of energy that can be produced is directly dependent on the intensity of available sunshine and the angle at which solar PV cells are oriented. PV cells are still capable of producing electricity even in temperate winter conditions and during cloudy weather, albeit at a reduced rate. Obviously, however, the cells will not work at night. Most current photovoltaic power is decentralised, being generated on rooftops to power individual buildings.

PV is an attractive option in areas of abundant sunshine such as in Australia, and may play a useful role in meeting peak consumption associated with the use of air conditioning systems. In remote areas it can also be a cost-effective option. Most non-rooftop Australian installations are in remote areas (such as Kings Canyon and Hermannsburg in the NT), where peak output tends to match peak demand owing to the use of air conditioning in the hotter parts of the day.

Installed capacity grew by 24 per cent in 2005 to 60.6 MW.[37] Most of this (86 per cent) is off-grid, but growth in grid-connected installations is very strong (154 per cent in 2005). PV rebates and feed-in tariff developments are likely to sustain and possibly strengthen this trend. The current rebate of $8000 for PV installations in homes, schools and community use buildings under current and previous versions of the Australian Government Solar Homes and Communities Plan has substantially increased the number of small-scale installations, even though the payback period with the rebate is 10-20 years.

PV is reliable and low maintenance, albeit predictably non-constant over a 24-hour cycle. It is readily adaptable and scaleable, from stand-alone (off-grid) systems where back-up is generally required commonly in the form of a diesel generator; to grid-connected systems where excess electricity production can be sold into the grid, and there is no requirement for storage or back-up systems; and utility-scale systems.

PV installations are almost all roof-mounted systems at the domestic scale. However, the longer term commercial potential is considerable provided capital cost can be brought down. In California, 250 MW of PV panels are being installed on six million square metres of industrial roof space, in a $1 billion initiative announced in March 2008. Technologies are also under development to better integrate PV into building architecture, including modular rooftop PV systems, the development of a solar PV rooftop tile, and solar PV wall panels.[38]

Whilst it is unlikely that PV technology for off-roof utility-scale generation will become price-competitive for another twenty years,[39] significant technological advances are being made: A grid-connected 100 MW CPV (Concentrated Photo Voltaics) plant is being developed in Victoria. Pre-commercial development work has been completed. A 2MW demonstration plant is to be constructed by mid 2013; construction of the full scale 100 MW plant near Mildura is expected to begin in 2014-15 and take around 2 years. The project is being funded by The Victorian and Federal governments.[40] Manufacturing cost of PV cells will be brought down by advances such as ‘SLIVER technology’, where the amount of silicon required is substantially reduced. Manufacturing cost of PV cells will be brought down by advances such as ‘SLIVER technology’, where the amount of silicon required is substantially reduced.[41]

Future policy frameworks including subsidies, and variations in the level of feed-in tariffs, could significantly influence the uptake of PV and the size of its contribution to the NEM. If technology delivers a substantial reduction in capital cost, then PV may develop into a significant contender for generation into the grid, particularly from building-integrated installations.

Solar systems NE Victoria

Solar Systems’ NE Victorian HCPV system will use heliostats (mirrors) to concentrate solar radiation by a factor of 500, onto high-efficiency PV cells developed by Boeing for satellite energy systems. The output is 1500 times the power output of the same area of a conventional PV cell. The cost of power generated is expected to be ¾ of that from traditional PV technology. Solar Systems, Factsheet:

Solar Systems fact sheet, Concentrated PV Dish System Overview, accessed 20 July 2011.

Solar thermal technologies (STT) concentrate solar radiation on to a receiver, where it is converted into heat, which can then boil a liquid to produce steam to drive turbines. STT is suitable for large-scale electricity generation and there are a number of technology options available, although they are at different stages of deployment and development. STT can be split into two groups:

  • zero to low concentration, low temperature solar thermal technologies (see Table 1), such as solar chimneys, solar ponds and solar water heaters; and
  • high concentration, high temperature solar thermal technologies (see Table 2), such as parabolic troughs, central receivers (‘power towers’), parabolic dishes, Fresnel collectors, and multi-tower solar arrays.

Solar thermal energy is emerging as a cost-competitive source of electrical power, especially because it can combine beneficially with current energy sources such as coal power generation. In 2002, costs were predicted to become equal to coal-fired generation once global capacity reached 5,000 MW, by around 2013.[42] The IEA’s current estimate of the time to achieve cost-competitiveness is more conservative, at 2030.

Table 1: Brief description of some zero to low concentration, low temperature solar thermal technologies

Solar Chimney

The sun’s radiation heats air under a large glass collector zone (around 1 km diameter), which then rises through large turbines at the base of a 600m high tower to generate electricity. EnviroMission’s Australian proposal would see hot air passing through 32 x 6.25 MW pressure staged turbines to generate electricity.

See EnviroMission, The Project,, accessed on 16 May 2008.

Solar Pond

A body of saline water several metres deep with increasing salinity with depth. Solar radiation entering the pond is stored as heat in the lower layer. Heat up to 80°C is available on a 24 hour basis for low-grade (40 – 800C) heating applications at $10 and $15/GJ. Possible applications include agriculture, aquaculture, water desalination and salt production. It is not suited to electricity generation, but can reduce electricity demand.

Solar water heaters

Heat-absorbing flat panels or tubes capture solar radiation and transfer the heat by circulating water to a storage tank. Mostly used for domestic and small-scale industrial use, with fixed collectors mounted on the roof, sometimes on frames to place the collector perpendicular to the incidence angle of winter midday sunlight for maximum efficiency. Not applicable to electricity generation, but reduces electricity demand.


Table 2: Brief description of some high concentration, high temperature solar thermal technologies

Parabolic trough

Constructed as a long parabolic mirrors which concentrate and reflect sunlight onto a horizontal tube. Fluid running through the tube picks up heat and is used to heat steam in a standard turbine generator. The mirrors can be rotated to track the sun on a daily or seasonal basis. Thermal efficiency for heating the fluid ranges from 60-80 per cent. Overall efficiency from collector to grid is about 15 per cent, similar to Photovoltaic Cells.

Solar power tower

An array of flat, movable mirrors (heliostats) focuses sunlight upon a collector tower, in which a substance is heated. Water was originally used for immediate power generation via a steam turbine, which did not allow for power generation when the sun was not shining. Other media can be used to store heat from which steam can be generated to run turbines at any time of day: purified graphite is being used in the 10 MW power plant in Cloncurry; liquid sodium (sodium is a metal with a high heat capacity) has also been successfully demonstrated as a heat storage medium.

Parabolic dish

A curved mirror which concentrates sunlight on to a focal point where the temperature may reach up to 3,0000C. This heat can be used to generate electricity or make hydrogen fuel.

Fresnel reflector

A series of long, narrow, shallow-curvature or flat mirrors focus light onto one or more linear receivers positioned above the mirrors. On top of the receiver a small parabolic mirror can be attached for further focusing the light. Cost is lower than trough and dish concepts because a receiver is shared between several mirrors; there is just one axis for tracking; and as the receiver is stationary, fluid couplings are not required. The mirrors also do not need to support the receiver, so they are structurally simpler.

Multi Tower Solar Array

Several tower-mounted receivers stand close together so that the surrounding heliostat fields partly overlap. In some parts of the total heliostat field the mirrors are alternately directed to different aiming points on different towers, so that radiation is collected which would usually remain unused by a conventional solar tower system due to mutual blocking of the heliostats.

In 2004, electricity generation from solar thermal power cost between US$85 and $135 per MWh, which is two to three times higher than the cost of conventional energy sources. Barriers to uptake include the high up-front cost of equipment to collect and store solar energy, the need for large collecting areas, and intermittence. The capacity to generate high temperatures provides the potential for hydrogen production as a method for storing energy for use in producing continuous energy supply; hydrogen also provides the possibility for energy use beyond the stationary electricity sector (see discussion on energy storage below).

Whilst the intermittency of solar energy (i.e. PV and solar thermal) is sometimes used as a basis to argue against its potential for supplanting energy from hydrocarbons, it is worth noting that in summer the diurnal fluctuation in solar power output approximately parallels demand associated with airconditioning. Demand tends to occur later in the day due to temperature peaking in mid to late afternoon as well as the concurrent demand of office and home airconditioning systems in the late afternoon and early evening as workers return home.

Current costs of solar thermal systems are the lowest of any solar technology, but more expensive than hydro, wind and biomass. By 2015, technological improvements should reduce cost to US$50/MWh, which would make it one of the lowest cost renewables able to service peak load and, provided adequate thermal energy storage systems can be developed, baseload power demand.[43]

Ocean energy can be tapped from a range of sources including tides, waves, marine currents, thermal layering, and salt gradients.[44] Systems to harness this energy are largely at the research and development (R&D) and pre-commercial stage of development. France, Canada, China, Russia and Norway operate tidal power stations, and there is a commercial wave power plant in the United Kingdom. The IEA estimates that by 2030 world ocean energy generation could amount to about 12 TWh, or 0.1 per cent of total energy generation. Only two of these sources are being investigated for development in Australia – tides and waves.

Tidal power incurs relatively high capital costs, and construction times can be several years for larger projects. In addition, operation is intermittent with a relatively low load factor (22–35 per cent). Thus, although plant life can be very long, the high capital costs and long construction time have deterred the construction of large tidal schemes. The environmental impacts from the large scale excavations required during construction are a further impediment, as is the potential for significant and possibly permanent alteration of estuarine tidal dynamics.

Tidal energy was considered for the Derby region of WA. However, economic and environmental considerations made a gas-fired power station a more cost effective option in that case.[45] Tidal energy from a 5 MW tidal plant suited to local electricity requirements would have met 50 per cent of annual demand with the balance from diesel powered generators; the estimated cost of power was $410/MWh.

A tidal range of at least 5 m is considered necessary for large-scale installations. Australia’s best tidal energy resources are in the Kimberley region. However, given the high costs of transmitting the power to far-away metropolitan regions, the resource may only be suitable for local demand. A low probability role could be to generate hydrogen, if a hydrogen-based economy were to develop in the future.

Wave energy depends on wind speed, the distance over which the wind interacts with the water, and the duration of time for which the wind blows. Wave energy systems do not make use of waves as such, but rather the swell that occurs in deeper water or which can be captured by coastal installations. Currently in the world, only two wave power installations are operating as commercial-testing installations. The fact that there are many different concepts under investigation in various countries (e.g. Scotland, Portugal) suggests that the best technology has not yet been identified. The technology is relatively straightforward compared to most other renewable energy technologies, and is easily scaled up to match supply opportunities. An added bonus is the capability to co-generate desalinated water. Projected costs into the long term are the lowest amongst the renewables. Reliability is relatively high, although predictable periods of lower output would be associated with calm ocean conditions.

Wave power worldwide is a potentially large resource but is still in the R&D stage. It appears to have a fairly low priority for commercialisation or for research. Nevertheless, wave power holds promise for offshore installations with minimal environmental impact, and is able to be sited close to coastal settlements with little effect on access to or utilisation of the adjacent coast or sea. If the technology were to develop faster than anticipated, Australia has suitable coastline conditions in its southern regions, and local technological expertise. Two systems currently under trial in Australia are described in the boxes.

Motion of underwater baloons

The motion of underwater balloons is used to pump seawater ashore under pressure to produce electricity via a turbine, or for desalination. The system is modular, with each balloon capable of generating 180 kW. A ‘wave farm’ of 300 units with 50 MW capacity would cover the area of 2 football fields and produce an average of 20 MW and about 50 GL of fresh water. Testing of a commercial-scale plant At Garden Island WA has verified modelled water pressure output. A grid-connected commercial plant is in the detailed design phase and construction is planned for 2012. and, accessed 7 July 2011


OceanLinx is a moored system in which wave energy is focussed in a confined chamber; the resulting airflow passes through a turbine to create electricity. Prototypes have been developed and tested at Port Kembla, culminating in deployment of a 1/3 scale 2.5 MW unit in 2010 which demonstrated the viability of the full-scale design. Recent work has focussed on improved turbine design. accessed 7 July 2011.


Geothermal energy sources originate from thermal energy trapped beneath and within the solid crust of the Earth. Theoretically, the total accessible resource base of geothermal energy to a depth of 5 km is over one million terawatt-years (TWa), but only an extremely small fraction of this total could ever be captured, even with advanced technology.[46]

Geothermal energy for electricity generation is cheap where it is easily accessible, but that tends to be in places that are volcanically active. In the longer term, tapping geothermal energy by pumping water into subterranean hot fractured rocks may become a useful source of renewable energy with wider availability. The IEA suggests that it is possible, with the full exploitation of opportunities, that geothermal energy could supply 5 per cent of global electricity by 2020.

There are two forms of geothermal energy resources in Australia – geothermal aquifer and geothermal ‘hot fractured rock’.

Geothermal aquifer: Australia has very limited geothermal aquifer resources – unlike the volcanically active regions of New Zealand which have been tapped as a source of geothermal energy for electricity generation since the late 1950s and currently provide an installed capacity of 444 MWe or 7 per cent of New Zealand's total installed capacity for electricity generation of about 5,000 MWe.

Australia’s best resources of conventional geothermal energy are in the Great Artesian Basin region, where many bores discharge water at high enough temperatures to operate heat engines. Two small-scale power plants utilise low temperature hot water to generate electricity for remote settlements, and a small geothermal power station is operating as a demonstration in Birdsville. As the resource is available only in central Australia it can supply only the very few towns located near the resource, where the total demand for power is about 20 MW. Present capacity is 18 MW and annual production about 43 MWh.[47]

Hot fractured rock (HFR) is rock (normally granite) at temperatures of 250ºC and higher, which occurs at depths of 3 to 5 km. This represents an enormous energy resource which can be tapped by pumping water into the HFR and extracting it as high pressure steam to run conventional steam turbine power equipment. The technology holds the promise of providing continuous power output. Preliminary work by Geoscience Australia suggests a potential HFR resource equivalent to 20 000 years of Australia’s energy use at 2005 levels - about 1.2 billion petajoules.[48] 

To develop this resource, boreholes need to be drilled into the HFR to facilitate the injection of water, which passes through fractures in the rock to extraction boreholes and returns to the surface as steam.[49] Success primarily depends on the ability to drill deep into hot hard rock. Current drilling technology limits geothermal extraction to 5 km – at this depth sufficiently high temperatures to make the process economically feasible occur only in ‘hot spots’ of above average temperature. Future development of drilling and extraction technologies is expected to expand the available geothermal resource.

Hot fractured rock

Hot Fractured Rock technology is at the experimental stage with no commercial schemes anywhere in the world. Successful development of the main areas in remote Qld and SA will require large-scale engineering and major infrastructure development to link it to the grid. There is also some potential in the Hunter Valley which is well located to tap into the existing electricity grid.


Image source:, accessed 7 July 2011


Twenty-seven companies are exploring for geothermal energy resources over about 149 000 sq km in Australia. The Energy Supply Association of Australia suggests that 6.8 per cent (~ 5.5 GWe) of Australia’s base-load power could come from geothermal resources by 2030, at $50–$60 per MWh. Without the pricing of CO2 emissions, this is considerably more expensive that many forms of conventional energy generation from coal and natural gas. Current drilling limitations may need to be overcome to allow widely distributed implementation. Remoteness of currently viable geothermal resources will require substantial investment in infrastructure to extend the grid, and will incur significant transmission losses using conventional 3-phase AC high tension lines. High voltage direct current transmission lines result in less energy loss, and are calculated to limit energy losses between remote NE South Australia and Port Augusta or Brisbane to around 5 per cent to 8 per cent respectively.[50] Alternatively, hydrogen generation on site may be a more cost-effective option to transport power to major centres. These additional costs may affect the market competitiveness of this technology.

Table 3: Summary of key features for alternative renewable resources for electricity generation

Renewable type


Capacity MW1

Cost $/MWh2

Stage of development




Long term






~ 5500




Mature; further development & improved waste management needed to cut cost

CO2 emissions. Distributed waste sources. Possible impact on food production.


Low, intermittent






Established; upscaling in progress is bringing down costs

Intermittency. Good wind limited to southern Aust. NIMBY resistance to new wind farm proposals


Medium-high, intermittent


~ 500




Small scale installations. R&D in progress to increase efficiency, reduce costs and to upscale

High capital cost. Currently best suited to remote installations. Growth dependence on subsidies. Requires large land area.

Solar thermal concentration

Medium-high, intermittent






R&D with some demonstration installations. Development in part driven by conjoined installations at coal plants to improve coal efficiency

Early stage of development. Potential large-scale energy source including hydrogen generation. Requires large land area.

Solar tower

Medium-high, intermittent






One small experimental installation overseas. First Australian installation at planning stage

Very early stage of development. Probably resource and capital-intensive. Requires large land area.




~ 550




Several small-scale installations overseas. Agreements in place for some small (upscaleable) installations here.

Require relatively deep water close to shore. Desalination potential is a bonus.


High, intermittent






Mature small-scale. Large scale at concept stage (e.g. Severn estuary UK) but nothing here

Extreme tides limited to N & NE Australia, remote from developed areas. High capital cost & long time to build. Environmental impact. Potential for hydrogen generation.

Geothermal aquifer



~ 40




Mature very small scale.

No significant prospects for upscaling in Australia.

Geothermal hot dry rock







At resource definition and demonstration stage

Early stage of development. Technical (drilling) challenges. High potential areas are remote. Potential very large-scale energy source including hydrogen generation

Notes:  1Australia’s total installed power generation capacity in 2006 was 51,000 MW; 2 For comparison, coal $28-40; clean coal with carbon capture $52-105; gas $37-54; gas with carbon capture $52-94; nuclear $40-65 (Electric Power Research Institute. Review and comparison of recent studies for Australian electricity generation planning: Report for UMPNER. 21 November 2006) Symbols used in ‘Long term capacity’ column: = indicates capacity will stay about the same as 2020-30; + indicates probable further growth in capacity beyond 2030 –the more + the higher the prospects. 

Cost of electricity from renewables versus coal and gas

Overall, the cost of electricity generated from renewables is significantly higher than for coal and gas. However this differential is markedly less when renewables are compared with the cost of coal and gas-based generation including carbon capture and storage (Table 3; Figure 4).

Figure 4: Cost ranges for electricity generation from various sources

Cost ranges for electricity generation from various sources

Source: AREVA, Submission to the Garnaut Climate Change Review, 2008,$File/D08%2051413%20%20General%20Submission%20-%20AREVA%20Australia.pdf, accessed on 21 July 2011.

Recent predictions suggest that the adoption of clean coal technology would see the cost of wholesale electricity rise by 50 per cent and the price to consumers go up by a quarter.[51] The cost of power from biomass, wind and wave power is already within the range of costs for coal generation with carbon capture and storage, and technological advances and upscaling promise to reduce these costs further.

The argument that renewable energy will necessarily cost more is weaker when the costs of reducing carbon emissions, and the advances and technological improvements in alternative energy generation are taken into account. Brad Page, CEO of the Energy Supply Association of Australia suggests: ‘If you were to have a 20 per cent renewable target by 2020 across the board for the whole of Australia, then you're probably going to add somewhere around 10 per cent to the production cost of electricity, so that would translate into, maybe, 4–6 per cent at the retail end.’ This increase would be above ‘business as usual’ coal generation costs without taking account of increased costs to the consumer of carbon capture and storage.

Limitations of renewable energy as suitable sources of reliable power

Critics of renewable energy as sources for baseload power base their point of view on cost, scale, location, and continuity of power output. The issues of cost and scale are interlinked, as unit costs will fall as the scale of installation grows. Research and development are focussing not only on technical issues such as the efficiency of power production, but also on the type and amount of material used in constructing the technology, which will bring down costs, especially in the photovoltaic field.

As technical design improves and operational experience is gained, the scale of installations is increasing. This is best evident in wind technology, where in the last decade generating capacity per turbine has roughly doubled to 3 MW linked to an increase in rotor diameter of 66 m, and the average aggregate capacity of wind farms has increased from typically around 50 MW to up to 140 MW (e.g. at the Woolnorth wind farm in Tasmania). Upscaling is anticipated across all renewable sources except geothermal aquifers. Dependent upon adequate solutions being identified for the drilling problems related to hot fractured rocks, there appear to be few impediments to the rapid expansion of this technology. Installations for several technologies are modular (e.g. wave systems, solar thermal, PV and wind), which means that upscaling is readily achievable.

The location and distribution of several renewable resources are relatively remote from main areas of energy use and from the NEM grid. However, systems can be constructed to solve this problem in much the same way that railways have been constructed to bring coal from remote mine sites and gas is piped from central Australia to the eastern seaboard. Developments suited to renewables are extensions to the grid, and conversion of thermal energy into transportable energy such as hydrogen transmission by pipeline. The range of renewables available in combination present a widely distributed number of feed-in points, such that wind farms along the southern coast, ocean power systems near main coastal centres, strategically positioned solar plants, and biomass plants in major agricultural areas can all feed into the common NEM grid.

This same distributed feed-in strategy from a variety of technologies positioned in different geographic areas experiencing different weather patterns at a point in time serves to moderate fluctuations in power inputs and reduce the strength of the argument that renewable power lacks certainty of supply and continuity. Indeed, some renewable sources of energy generation such as biomass and geothermal energy (also ocean thermal layering which is not being developed in Australia), are based on continuous inputs to generate power. Development of these technologies could substantially offset the limitations posed by those renewables which are based on discontinuous inputs, i.e. sunlight, wind, wave motion and tides.

There is however an issue with concentration of intermittent sources of supply on the network. Provided wind or any other intermittent source is disbursed across the grid the current system can cope with significantly more than is currently produced. Some problems can occur when there is too much concentration in one part of the grid. South Australia is one area where there is a very good wind resource but a relatively low load, which can produce bottlenecks into the national grid. Potential issues in this part of the grid have been subject to studies by the Australian and South Australian governments and have been effectively managed by NEMMCO without any adverse impacts on the NEM. 

Overall, there is no theoretical impediment to the use of renewable energy as a reliable power source. In practical terms renewable energy will not be available in sufficient quantity until its stage of development matures, the issue of scale is addressed, and pricing is acceptable. This analysis indicates that renewables could provide 20-30 per cent of Australia’s electricity capacity by 2030, dependent upon adequate support for continued research, development and demonstration. Pricing support may prove necessary to achieve targets. However it is worth noting that projections for the costs of electricity from ‘clean coal’ and gas which incorporate carbon capture are in the range of $52-$105 per MWh, which make the cost of energy from renewables relatively competitive (Table 3). The Intergovernmental Panel on Climate Change (IPCC) suggests that all renewable energy sources except solar electricity are already less expensive than the projected cost of coal-fired electricity incorporating capture and geosequestration of CO2 emissions.[52] It is worth noting that carbon capture technology may not be demonstrated as a proven technology for about a decade, by which time significant advances are likely to have been made in the demonstration, application and upscaling of several renewable energy technologies.

Solutions to the intermittency issue

As mentioned above, several renewable energy sources depend on harnessing power from intermittent energy sources such as sunshine, wind and waves. Continuity of supply can be provided through:

  • a mix of generating capacities to reduce reliance on daylight hours, sun, wind , or waves;
  • incorporation of renewables in the mix which are not subject to intermittent energy, i.e. biomass and geothermal hot fractured rock;
  • back-up generation utilising sources which can respond quickly to demand fluctuations and which are less polluting in CO2 and other greenhouse gases than conventional coal technologies; and
  • technologies to store excess energy to be used when primary generation does not match demand.

Technology mix: a range of possible mixes has been advanced incorporating renewable energy to combat increasing CO2 emissions. For example, one model suggests that biofuels (28 per cent), wind (20 per cent), solar (5 per cent), and hydro (7 per cent) could supplement gas (30 per cent), black coal (9 per cent) and oil (1 per cent) to produce all of Australia’s electricity needs by 2040.[53] This model provides for the intermittency being offset by retention of significant gas generation in preference to coal, owing to its lower greenhouse gas emissions. As other renewable technologies are proven, such as geothermal hot dry rock energy, these can replace fossil fuel inputs into the energy mix.

Energy storage: Concern over the ability of renewables to displace significant generating capacity from conventional sources is based on the inherently intermittent nature of wind and solar, and their apparent limited ability to provide continuous power and system support requirements. Contributions to the grid at lower levels of penetration are not an issue: intermittent renewable energy sources are presently connected into the UK power system without significant difficulty and with no requirement for energy storage, and this is expected to extend to beyond 10 per cent of the total electrical energy mix being derived from renewables.[54]

Economic benefits from higher levels of penetration of renewables in the energy sector could be constrained by the volatile nature of primary supply availability, but energy storage can address this problem.[55] Many technologies have been developed with the aim of offering storage, but to date only pumped hydro schemes have achieved significant penetration. Growth in hydro is constrained by geography and cost. Emerging technologies do not share the geographical constraints and their potential cost is lower than pumped hydro.

Energy storage devices can be grouped as:[56]

  • mechanical – flywheels, pumped hydro, compressed air storage;
  • thermal – e.g. ice storage, hot water, molten salts;
  • electrochemical – e.g. low temperature batteries, high-temperature batteries, flow cells and fuel cells, and hydrogen; and
  • direct – e.g. capacitors and superconducting magnetic energy storage.

A number of flywheel systems are in commercial development, but their use is usually directed towards short-term objectives (5 seconds to 5 minutes) of power quality and uninterruptible power supply. Superconducting devices are too expensive for large-scale use.

An Australian innovation in thermal energy storage in the form of hot water from concentrated solar collectors has recently received substantial US financial backing for commercial-scale development.[57] The ‘Ausra’ storage system being developed by Dr David Mills, formerly of Sydney University, has received US$40 million in venture capital for a 175 MW storage system which will be used to generate backup power to provide baseload for up to 24 hours from steam-driven turbines. Backers claim that this power will be cheaper than nuclear power on an unsubsidised basis, and cheaper than carbon-capture coal.

Demonstration of another thermal energy storage system using graphite blocks connected to a concentrated solar array has been completed in Cooma NSW[58] and a 16-tower 3.5 MW plant using this technology was near completion in western NSW at Lake Cargelligo during July 2011.[59]

Significant advances are being made in the development of electrochemical storage options. Examples of current installations, and R&D for use in power networks in this field, include:

  • Lead-acid batteries of the conventional type are only commercially viable in small installations or in high-value applications for large (i.e. grid) systems owing to the high cost per kWh.[60] CSIRO is developing the ‘Ultra battery’ which combines the best energy storage characteristics of a conventional lead acid battery with the high power density characteristics of a supercapacitor. The battery is targeted at hybrid car applications and has already been prototyped. A large stationary energy storage version for renewable/intermittent supply applications is in the planning stage.[61] The discharge and charge power is expected to be 50 per cent higher and its cycle life at least three times longer than that of the conventional lead-acid counterpart.
  • sodium-sulphur high-temperature battery: the 51 MW Futamata wind farm in Japan is incorporating 34 MW of sodium-sulphur (NaS) batteries and will be the largest combined wind and storage installation in the world when completed in 2008.[62] The technology is expected to be suited to upsizing up to several tens of MW.
  • vanadium redox storage flow cells are used on King Island to store wind energy (200 kW for 4 hours, 400 kW maximum output), to store excess energy, and to reduce the requirement for diesel generator back-up.[63] In Ireland, a 2 MW, 12 MWh vanadium flow battery is being installed to provide 3 MW of pulse power for 10 minute periods every hour in order to deal with short-term volatility in wind generation – studies estimate that 700 MW of storage could be used across Ireland as wind expands to 3000 MW of installed capacity.[64] Vanadium-redox batteries are to be installed with photovoltaic solar panels and wind turbines at the remote fishing community of Windy Harbour in WA, and on Cockatoo Island and the Environmental Research Institute for Art at Homebush in Sydney.[65]
  • demonstration of a 500 kWh zinc-bromine battery at CSIRO’s National Solar Energy Centre in Newcastle.[66]

Upscaling and installation of innovative electrochemical systems are not without problems. Development of the Regenesys™ system of sodium bromide-sodium polysulphide flow cells has been cancelled following engineering difficulties encountered in building operational-scale 12 MW storage plants in Tennessee[67] and at Little Barford in the UK.[68] However, installations of fuel cells of this and other chemical types are likely in the future following further development: the Regenesys system was designed to be readily upscaleable by increasing the size and number of electrolyte tanks to enlarge storage capacity and the discharge (i.e. supply) period, for example up to several days.[69] 

Energy from renewables can be used to produce hydrogen from water by electrolysis or by thermolysis. Both processes can be coupled with an intermittent renewable energy source such as a wind turbine for hydrogen production, and can also provide load-levelling in stand-alone or electricity utility networks by using excess or off-peak electricity to generate hydrogen for later use.[70] Whilst electrolysis is a mature technology, it is extremely energy-intensive and probably best suited to large renewable energy projects in areas remote from the electricity grid such as the proposed hot fractured rock sites in outback Queensland, NSW and SA, where hydrogen could be piped or trucked to major centres for conversion to stationary and transport energy.

Another approach to hydrogen generation is the dissociation of ammonia into hydrogen and nitrogen. A research grant has been provided to demonstrate this system and deploy it as a solar energy storage system near Whyalla SA, where four 400m2 solar dishes will be installed to concentrate sunlight and provide the heat required to split ammonia into nitrogen and hydrogen for storage. When power is required, the gases are recombined which gives off heat to boil water and generate electricity through a steam turbine.[71]

Whilst hydrogen can be generated from renewable energy sources, it can also be produced as a by-product from some clean coal technologies and from coal seam gas etc. Hydrogen from renewables will therefore be at a price disadvantage until the cost of renewable energy becomes competitive, either through technological improvements, or through carbon accounting.

Timeline for implementation of renewable energy for power supply

Information collated in Table 3 suggests that, by 2030, renewables in Australia may be able to provide a level of generating capacity equivalent to around 40 per cent of 2006 capacity. In recent years most of the growth in power generation from renewables has been delivered by wind power which has high intermittency, so that the percentage of energy delivered as a proportion of total load is necessarily low. In future years it is probable that renewables will be able to deliver high levels of reliability and continuity of supply similar to that delivered by fossil fuel power plants, although this will require considerable technological development and infrastructure investment.

The intermittency issue, mainly represented by wind energy and to a lesser degree solar energy, is commonly cited as the main technical reason limiting the level of renewable energy which can be incorporated into a grid without compromising overall reliability. Whilst this can be offset to some degree by ensuring a wide geographic distribution of renewable inputs to decrease the frequency of low supply periods, and by ensuring a variety of renewable technology inputs into the grid, the ultimate solution required to deliver the reliability of supply required will be based on storage systems able to store intermittent energy inputs and release continuous and reliable energy on demand.

It is difficult to predict future levels of capacity and supply deliverable from renewable energy sources, as the rate of growth depends of the success of research, development and demonstration; successful operational deployment; funding for R&D; government policies regarding research funding, preferential tariffs or other incentives for renewable energy; policies relating to the level of greenhouse gas emissions such as emissions trading; encouraging fuel switching and shortening the operational lives of conventional power stations, and any future policies to encourage decommissioning of coal-fired power stations in favour of less polluting alternatives.

As mentioned earlier, one Australian scenario proposes that a ‘clean energy supply mix’ could be delivered by 2040; entailing coal-powered generation of 9 per cent (plants decommissioned as circa 35-year operational life is reached); natural gas 30 per cent (the least polluting of the fossil fuels, using both cogeneration and combined cycle power stations); bioelectricity from crop residues 28 per cent; wind 20 per cent; hydro 7 per cent; solar 5 per cent (produced during peak periods when its economic value is highest); and oil 1 per cent (which could progressively be replaced by biofuels).[72]

This scenario is relatively consistent with a German model which claims that by 2050 half of global energy demand can be met by renewable energy technology in use today.[73] This model foresees a much greater role for solar generation than the Australian model. Meanwhile, the State and Territory jurisdictions are embarking on programs which will demonstrate the capability of renewables to contribute to the energy mix and reduce the need for new conventional baseload power stations. For example, the ACT Government is encouraging the construction of larger scale solar facilities (minimum 200kW per facility with a cap of 40MW total capacity) through an auction of Feed-in-tariff entitlements[74] and South Australia has achieved its target of 20 % of energy production from renewable through the installation of 1,150 MW of wind generating capacity since 2007.[75]

A less optimistic contribution for renewables by 2050 is indicated by scenarios developed jointly by CSIRO and ABARE in 2006.[76] Their most ‘renewable-friendly’ assessment, assuming high levels of policy intervention on emission levels and maximum use of technology, concludes that coal (with and without carbon capture and storage) will still contribute about 30 per cent of total electricity, gas around 20 per cent, renewables about 47 per cent, and possibly nuclear 3 per cent. Potential for significant contributions from solar energy and geothermal energy (hot fractured rocks) is discounted on the basis of technological infancy, lack of demonstration, and unknown costs of electricity produced.

It appears safe to conclude from these three views of the future that at least 50 per cent of electricity will be generated from renewables by 2050 – provided that suitable policy instruments are in place to encourage transition from a high-carbon (coal/gas/petroleum) to a low-carbon (biomass/solar/wind) infrastructure. With increased penetration of the more reliable renewable sources (i.e. biomass and potentially hot dry rock), and successful development of storage systems, there appears to be little impediment in the longer term to the total displacement of coal as the mainstay of baseload generation.

Gas will probably play the role of a change agent in moving from the high-carbon to the low-carbon infrastructure. Like coal, Australia possesses very large resources of gas. But gas offers greater flexibility than coal in providing for both baseload and peak load needs, with significantly less CO2 emitted per joule of energy and lower infrastructure costs. Provided that policy and pricing settings are amenable, the contribution to the power mix from gas would diminish as the generating capacity and reliability from renewables is established.


Combinations of renewable sources of electricity can significantly augment electricity generating systems based on fossil fuels and nuclear power (see Table 4). With renewable sources, reliable supply to meet base-load electricity demand can be met by biomass, hot rock geothermal, solar thermal electricity with storage, and wind power with storage. Gas turbine energy with its lower CO2 emissions can replace coal-fired power stations as they are decommissioned and provide support until renewable power installations ramp up in size and number. By 2040 renewable energy could supply over half of Australia’s electricity, reducing CO2 emissions from electricity generation by nearly 80 per cent. In the longer term, it appears that there is no technical reason to stop renewable energy from supplying 100 per cent of grid electricity.

The key challenges in meeting such an objective would be achieving the necessary technical advances to provide cost-effective and reliable energy storage devices; delivering appropriate policy and funding frameworks for major restructuring of the electricity generating industry in order to move away from the dominance of coal; and significant funding to provide for restructuring of power distribution infrastructure away from the highly centralised coal-based infrastructure, towards a more widely distributed infrastructure reflecting the very different geography of renewable resources. A more distributed network would carry with it the benefits of reducing transmission losses, and improving the stability and reliability of supply to end-of-grid consumers.

Table 4: Summary of renewable energy technologies and their suitability to produce continuous/reliable power

Renewables best suited to continuous power output are:

  • biomass: relatively low cost, could contribute 10 per cent total load by 2020;
  • wave power: demonstrated but no full scale commercial installations at this point; low cost, avoids land-based environmental issues, by-product desalination is a bonus; and
  • geothermal hot fractured rock: very high potential to produce large amounts of electricity at low cost; drilling limitations may need to be overcome.

Other renewables with high intermittency can contribute to the power mix, but this total contribution above about 20 per cent is unlikely without development of suitable large-capacity power storage systems or improved grid design and management. They include:

  • wind: technology well established, and upscaling is bringing down costs;
  • solar thermal concentration: early development stage, high long term potential but requires large land area, moderate cost;
  • photovoltaics: high capital cost and small scale of installations. Research and development is likely to improve its suitability for large-scale installations. Ideal for off-grid installations. Continued development and uptake is highly responsive to policy and financial support; and
  • tidal energy: has considerable potential but owing to the remoteness of suitable areas, and environmental impacts, development is not anticipated in the foreseeable future.


Following recent rises in fossil fuel prices, renewable energy is already cost-competitive with diesel-powered off-grid systems in outback Australia. The decentralised nature of renewable power and the ability to hybridise between different types of renewable energy and with fossil-fuel based back-up systems suggests that renewables will dominate in the expansion of electricity supply to the one third of the global population presently without power, especially in mountainous and island regions where the cost of extending grid power is very high and major centralised power stations may be impractical. For example, there are many thousands of remote villages in India that are not connected to the electricity grid, and the Indian Government has decided to provide power these villages using decentralised power systems based on renewable energy sources.

Any major change in direction towards renewables carries several significant uncertainties. Whilst some argue that the technical challenges and costs of renewable energy are so great that it is foolhardy to commit to strict deadlines, others point out that the development and implementation of CO2 geosequestration and clean coal technologies are not guaranteed and will incur costs which will substantially increase the cost of energy to the consumer.

This review shows that there is a lot of potential for major advances in renewable energy technologies over the next few decades: rapid advances in the science and engineering of renewable energy are being made on several fronts, continuing through to demonstration and implementation of commercial projects across most of the renewable energy technologies. The coal-fired electricity market is pinning its hopes on geosequestration of CO2 in order to conform to the demands of the future carbon economy, but its commercial feasibility is yet to be demonstrated and it may prove so costly that the energy cost advantage currently offered by coal relative to renewables is likely to be eroded.

The term ‘baseload’ closely reflects the characteristics of electricity generated by coal (and nuclear) power stations and has been used as a basis for arguments that renewable sources cannot supply reliable energy to power key infrastructure, health services, and industrial and domestic needs to support activities which are fundamental to the operation of Australian society. However, energy requirements from these key sectors also extend to intermediate and peak power. This review suggests that the term ‘baseload’ is misleading, and that the essential requirement is for reliable and continuous power, with flexibility of output to match diurnal and seasonal fluctuations in demand.

Some renewable energy resources such as biomass, waves, and hot fractured rock are clearly capable of delivering reliable and continuous electricity. Other sources such as wind and solar thermal concentration will be able to enhance the flexibility of supply by contributing power during periods of intermediate and peak demand. As energy storage technology becomes sufficiently well developed this ability will expand, and also extend into the supply of continuous power.

The dollar cost of energy derived from renewable resources will be greater than we have been used to, and considerable investment will be needed by government and industry on research and development, and construction of the appropriate distribution infrastructure. Costs may also accrue in relation to restructuring of the electrical energy sector. Offsetting these costs will be the dividends that accrue to Australia through decreased environmental impact, meeting national and international targets for greenhouse gas reductions, and maintaining a defensible position in international negotiations.



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[39].      Australian Parliament, Renewable Power, op. cit.

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[54].      United Kingdom, House of Lords Select Committee on the European Community’s, ‘Electricity from Renewables’, House of Lords, Paper 78–I, June 1999, para 61.

[55].      N. Jenkins, and G. Strbac,’Increasing the value of renewable sources with energy storage’ in Renewable Energy Storage, Institution of Mechanical Engineers Seminar Publication 2000–7.

[56].      A.C.R. Price, ‘The Regenesys™ energy storage system’,in Renewable Energy Storage, Institution of Mechanical Engineers Seminar Publication 2000–7.

[57].      M. Peacock, ‘Solar takes off with US power supply deal’, ABC News, 2 October 2007, accessed on 26 May 2008. Major projects (Desert Sunlight, Topaz Solar) using this technology are in progress in California, each with a capacity of 550 MW: , accessed 18 July 2011.

[58].      ‘Cooma Project receives $5 million in funding’, Bombala Times, 8 May 2007,, accessed on 26 June 2008.

[59].      Malcolm Turnbull, ‘$17.6 million funding to reduce barriers to renewable energy’, 2 May 2007 , accessed 18 July 2011.

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[66].      ibid.

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[68].      Electricity Storage Association, EESAT Conference covers wide range of storage topics, February 2004, page 4, accessed on 16 May 2008.

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[70].      Department of Industry, Australian Hydrogen Activity Report, 2006.

[71].      Australian Government Department of Climate Change, ‘Australia’s renewable energy target’,, accessed 18 July 2011.

[72].      H. Saddler, M. Diesendorf and R. Denniss, op. cit.

[73].      Fraunhofer Ise, Solar Electrical on a large scale linear fresel collectors for solar thermal power stations in a practical test, 16 April 2007,, accessed on 20 July 2011.

[74].      J Simon Corbell. ACT Minister for the Environment, Media release 30 June 2011, Large scale solar energy auction   . accessed 20 July 2011

[75].      Premier Mike Rann, Ministerial Statement 22 June 201, South Australia meets 20 % energy target. accessed 20 July 2011.

[76].      CSIRO and ABARE, Modelling Energy Futures Forum Scenarios using ESM, December 2006,, accessed on 20 July 2011.

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