Power of the wind - how renewables are lowering South Australien electricity bills

● By Dylan McConnell, University of Melbourne ● Renewable energy sources such as wind and solar power appear to be the impetus behind a South Australian proposal to substantially drop electricity prices, just as other states are hiking theirs. The Essential Service Commission of South Australian (ESCOSA), which regulates retail electricity prices, has released a draft price determination that proposes an 8.1% reduction in the electricity standing offer, (that is, the default retail price that must be offered to South Australians, at a minimum). The proposal, which follows an ESCOSA investigation into the wholesale energy costs, translates to a reduction of $27.19/MWh, potentially lowering South Australian electricity bills by an average of $160 per household. And while it is not specifically acknowledged in the determination, this may be the first time the “merit order effect” of renewable energy sources can conclusively be seen flowing through to consumers in Australia. The Merit Order Effect There is nothing special about the “merit order effect”. Quite simply, if you introduce more of a product into a market (that is, increase supply) then prices fall. The introduction of new capacity upsets the prevailing merit order (the order in which electricity is dispatched, from lowest to highest cost) lowering market prices. Historically this has been observed when new coal power plants have been added to the market. But the Renewable Energy Target (RET) and other schemes such as the state based feed-in tariffs, are introducing more renewable electricity (supply) to the national electricity market. Renewables typically have no fuel costs (free sun and wind), and thus have the lowest short run marginal cost of production. This ensures they are lower in the merit order and dispatched prior to anything else in the market. Like a new coal plant, this additional (and low marginal cost) supply also lowers wholesale prices ...Zum vollständigen Artikel


Cookies helfen bei der Bereitstellung unserer Dienste. Durch die Nutzung erklären Sie sich mit der Cookie-Setzung einverstanden. Mehr OK