Coal and gas power prices need to fall to compete with renewables but they keep going up and are accelerating their own demise.
"Here is a summary of the most interesting parts of the New South Wales story for you. 1) Wholesale energy costs have virtually doubled
One of the key drivers behind the rise is an almost doubling of wholesale energy generation costs; the days of abundant, cheap coal fired energy are history and has caught almost every regulator and forecaster by surprise. Although shrouded in complexity, the insights that WattClarity provide hereshow that compared to last year, average NEM prices in NSW (in simple terms the bulk wholesale price of energy) are around 7.7c kWh in Q2, compared to around 3.6c kWh in Q2 2015. Interestingly, this is even higher than when the allegedly evil, economy destroying carbon price applied.
Secondly, gas is making an increasingly large contribution to our energy mix – and it has been steadily increasing in price as a result of a wide variety of factors, but most notably supply and demand as described here. Wholesale spot gas prices have risen from a historical level around $4/GJ to $29/GJ in Sydney recently."
