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Renewables are driving down power prices from Austin to Melbourne

Wind turbines at sunset
Picture: Pixabay

Solar and wind are the cheapest sources of electricity in history – and their cost benefits are starting to show up in power grids across the world.

In the US, the states with the highest renewable energy penetration rates also have amongst the lowest tariffs.

  • Washington state, which provides America’s most affordable power, generated 76% of its electricity from renewables in 2022, according to the Energy Information Administration. Hydroelectric facilities are the biggest contributor, although wind’s share in the mix is approaching double figures.
  • Idaho, which ranks third on the affordability index, had a 75% renewables share last year. Hydropower covers half the state’s power production, and other renewables – mainly wind – account for a quarter.
  • Oregon ranks fifth on affordability and had a 70% renewables share in 2022, with the largest contributions coming from hydro and wind.
  • In Montana, which has the ninth-lowest average tariff, renewables accounted for 53% of in-state electricity generation in 2022.
  • South Dakota ranks 13th in terms of affordability and gets 52% of its power from wind alone. All renewables account for 84% of the state’s output.
  • Iowa is also notable, with the 14th cheapest power and wind accounting for 57% of the mix.
  • In Texas, wind and solar cut the average wholesale electricity price by 26% in 2022, saving households and businesses $11 billion, according to a study by Joshua Rhodes, a research Scientist at The University of Texas. The state has increased the share of renewables in its electricity mix from 10% in 2013 to 32% in 2022.
  • In Oklahoma, where wind is the single-biggest electricity source, power prices are well below average.
  • California, however, is an outlier. It has one America’s most expensive power systems, despite renewables accounting for half of in-state supply. This is partly because the state’s renewables push started long before wind and solar power were cost competitive. Also, consumers are forced to cover the costs of the wildfires that utilities frequently cause. Pricing reforms are in the works.

Meanwhile, in Australia’s main grid, the states with the lowest average wholesale power prices are those with the highest shares of renewables, according to data from the energy market operator. That’s Tasmania, Victoria (home to the city of Melbourne) and South Australia (where Adelaide is the capital).

  • The laggards in the country’s energy transition – Queensland and New South Wales – pay far more. The average wholesale price in coal-reliant Queensland was A$162.06 last year, versus A$104.60 in South Australia – which got 70% of its electricity from solar and wind.

In Europe, the same trend is evident.

  • In May, Poland had the highest wholesale prices in the region, according to data from the European Network of Transmission System Operators (ENTSO-E), via Ember. The country got 55% of its power from coal, and another 6% from gas, according to ENTSO-E stats, via ElectricityMaps.
  • On the other hand, Finland produced Europe’s cheapest electricity in May, with renewables accounting for 51% of generation, and nuclear 41%.
  • In Spain, which got 59% of its power from renewables, prices were 30% below those in Poland.
  • According to the International Energy Agency, newly installed solar PV and wind facilities will save consumers in the European Union €100 billion from 2021 to 2023. Wholesale electricity prices in Europe would have been 8% higher last year without the additional renewable capacity, the agency says.

Tags: Renewables, Solar

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