Respondents are also dead set on an outcome that will benefit all three legs of the same trilemma. When asked what they might be prepared to compromise on if not all of their desired outcomes could be achieved simultaneously, almost a third admitted they wouldn’t be prepared to compromise at all. A further 38% felt that if just one of the elements had to give, it would be price; followed by emissions (20%) and then reliability (16%).
Is it possible to have affordable electricity while transitioning to a lower emissions energy sector?
The answer could be ‘absolutely’ or ‘no way’. It really depends on what we mean by ‘affordable’. If we think affordable means that we have to have wholesale prices of AU$50 per MWh or consumer prices of just over 10c per kWh, as was the case a few decades ago, the answer is certainly ‘no’. The reason is that a lot of assets in our system, for example coal fired generators from the 1960s and 1970s, are now approaching the end of their lifespans and will eventually require replacement. In order to make these new investments work for investors, we will have to pay more than in the past for energy, regardless of which technology we chose to replace the existing coal generators with.
However, if ‘affordable’ means that we are paying as much or even a little bit less than the current volume weighted wholesale prices, then we can absolutely maintain affordability while transitioning to a lower emission sector because renewables are quite cost-effective on an energy basis nowadays. The question then becomes one of how to stabilise renewable energy during those periods when the sun isn’t shining or the wind isn’t blowing. Gas turbines, batteries, pumped hydro and demand response are all good options to do just that.