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What is cheaper; coal or renewable energy?

What is cheaper coal or renewables

There is a federal election on its way – we can’t hide from it and one of the most important policies on the table is going to be climate, climate change and Australia’s energy demands.

“Environment has almost become a proxy for leadership capability at a federal level in the same way capacity to deal with infrastructure has been a proxy for leadership at a state level, as we just saw in Victoria.” (source)

Coal is still the leading energy supply in Australia and is backed by our current Coalition government. But, with energy supply and demand such a contentious issue in the upcoming election we thought we’d take a look at how coal measures up.

How does coal shape up in terms of value for money – is it worth it, compared to renewables?

Electrical energy is measured in kilowatt-hours. A megawatt-hour is 1,000 times larger.

The 2017 price of coal is <$40/MWh
However, this price is predicted to rise >$70/MWh

Current renewables are around $60/MWh (source)
And, ANU has forecast renewables would fall <$50/MWh in the 2020s

So, at the moment coal is cheaper than renewable energy options, but there is a significant caveat to that stat:

“Most of Australia’s energy comes from ageing coal plants, and much of this capacity is due to retire by 2040 when the facilities reach the end of their lives.”

“Meantime a new coal-fired power plant would cost an estimated $3 billion, drive up energy prices and take eight years to build, according to energy analysts.” (source)

So, for now, coal is cheaper, but that won’t last long. Renewables will very shortly become far cheaper and a safer, long term investment in Australia’s energy needs.


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