Solar Power May Soon Drive Australian Coal Plants Out Of Business

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The UK’s Guardian reported that in the first week of July 2014, for the first time in memory, the wholesale price of electricity in Queensland, Australia fell into negative territory – in the middle of the day.

For several days the price, normally around $40-$50 a megawatt hour, hovered in and around zero. Prices were deflated throughout the week, largely because of the influence of one of the newest, biggest power stations in the state – rooftop solar.sunpower_main

“Negative pricing” moves, as they are known, are not uncommon. But they are only supposed to happen at night, when most of the population is mostly asleep, demand is down, and operators of coal fired generators are reluctant to switch off. So they pay others to pick up their output.

That’s not supposed to happen at lunchtime. Daytime prices are supposed to reflect higher demand, when people are awake, office building are in use, factories are in production. That’s when fossil fuel generators would normally be making most of their money.

The influx of rooftop solar has turned this model on its head. There is 1,100MW of it on more than 350,000 buildings in Queensland alone (3,400MW on 1.2m buildings across the country). It is producing electricity just at the time that coal generators used to make hay (while the sun shines).

The impact has been so profound, and wholesale prices pushed down so low, that few coal generators in Australia made a profit last year. Hardly any are making a profit this year. State-owned generators like Stanwell are specifically blaming rooftop solar.

Last week, the WA Independent market Operator forecast that 75% of detached and semi detached dwellings, and 90% of commercial businesses could have rooftop solar by 2023/24.

The CSIRO, in its Future Grid report, says that more than half of electricity by 2040 may be generated, and stored at the point of consumption. But they warn that unless the incumbent utilities can adapt their business models to embrace this change, then 40% of consumers will quit the grid.

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