Australian utility Alinta Energy is ramping up its push into renewables, citing stunning low costs that will enable dispatchable wind and solar to compete with existing fossil fuel plant.

In a wide-ranging interview on RenewEconomy’s Energy Insiders podcast, Alinta CEO Jeff Dimery says the company has enjoyed record profits in the past year, but also flags the likely early closure of coal-fired power, including the Loy Yang B brown coal generator in Victoria.

Alinta currently has a partly-filled mandate for 1,000MW of wind and solar plants across the country, a call out for offers that attracted more than 100 different wind, solar and storage proposals.Dimery says this mandate is now being increased to 1500MW.

“I’m happy to announce an increased target from 1,000MW to 1,500MW,” Dimery tells the Energy Insiders podcast. “That’s a 50% increase for our target for the clean energy space.”

One of the reasons is the stunning fall in wind and solar costs. Alinta has just held a formal ceremony to mark the start of construction of the 212MW Yandin wind farm in Western Australia, which will not just be the biggest in the state, but also likely the cheapest in the country.

“I can tell you that the levellised cost of energy coming out of that plant is in the mid to high 40s (per megawatt hour) before firming,” Dimery tells Energy Insiders.

That makes Yandin – thanks to its excellent wind resource and an expected capacity factor of 50 per cent, likely the lowest cost wind farm in Australia, beating the “low $50s/MWh” quoted for Stockyard Hill in Victoria.

Dimery points out that Alinta owns the plant that will “firm up” the wind power, and had invested in making its gas plants more flexible. “We will be in a position to compete in the wholesale market at prices sub $70/MWh.” That makes it cheaper than the usual gas-only alternatives as a fully dispatchable power source.

Alinta recently signed an off-take agreement for the 200MW Solar River solar project in South Australia, which is likely to come with a big 100MW battery, likely with three hours of storage, and several big solar projects in the Pilbara mining region.

RenewEconomy has already broken news that one of those projects is a 60MW solar farm that will help power iron ore mines owned by billionaires Gina Rinehart and Andrew Forrest’s Fortescue Metals.

Dimery says he is unable to confirm talks with any particular parties, but says the company is working “several large projects in the Pilbara” and an announcement is likely before the end of the year.

The importance of Alinta’s increased renewables mandate is significant, given that most of the other major “Gen-tailers” have stalled in their switch to renewables, and appear to be following only federal government policy.

Alinta, or at least its parent company CTFE, also owns the Loy Yang B brown coal generator in Victoria, which currently has a licence to operate until 2047.

But Dimery makes it clear that it is unlikely to stay open that long – the lower cost of renewables, and the emergence of storage means that the transition to a renewables-dominated grid was going to happen anyway.

“Do I think we’ll be there in 2047?

“Unlikely,” he says. “We going through a fairly major transition … change is coming and it is coming rapidly. Technology cost curves have made the debate about carbon target redundant.

“The stationary energy sector will sail past its Paris targets – and that is without RET (renewable energy target) extensions or a carbon emissions trading scheme.

“I’m not saying we wouldn’t have got there quicker (with them in place), but they are no longer required.

“Industry will behave rationally and commercially. As cost curves come down, that’s what is going to happen. Coal fired power station will continue to be marginalised and closed over time, depending on their own cost structures. They will be replaced by renewable energy and battery technology, pumped hydro, solar PV etc.”

How quickly does that play out?

“I mentioned earlier that 2047 was our licence (for Loy Yang B). I would think that we are probably talking early 2030s when those assets will really struggle to be around,” he says, based on his “gut feel” from 20 years in the industry.

“They are the time frames we are dealing with. Anything we do around the edges is really noise. It’s going to happen anyway. I can’t see it being brought forward without wasting a lot of money and having little effect.

“And I don’t see it being delayed. I don’t think it beneficial to talk about delaying it. I just think … let it happen. It is happening naturally.”

Dimery says Alinta’s record profit in the last year, which will be revealed shortly (the company is no longer listed), was based around strong wholesale markets, and a big increase in consumer numbers, although he noted that the “margins” on consumers had fallen substantially.

See also Alinta sees sub 5-year payback for unsubsidised big battery at Newman.

And listed the podcast in full here, or click below.