Wind & Solar Will Replace Coal & Gas In Australia Quicker Than Many Think

June 24th, 2016 by Giles Parkinson

Originally published on RenewEconomy.

The policies may not yet be in place, and the resistance from the incumbents will be fierce, but according to global analysts Bloomberg New Energy Finance, the future is clear: wind and solar will replace coal and gas fired generation, and a lot quicker than many think.

By 2040, BNEF predicts, one third of all capacity which will be located “behind the meter” – which means via rooftop solar on households and businesses (38GW), and mostly tied to battery storage (15GW).

Over the same period, some 27GW of large scale solar plants and 19GW of large scale wind farms will be added to the system. Combined with small scale solar PV and hydro, this will provide two thirds of Australia’s power capacity and 59 per cent of generation by 2040.

These new solar and wind farms will replace 16GW of coal fired generation that has been retired either because of old age, or because they are not flexible enough to compete in a high renewables market. Only 12GW will remain in the market by 2040, with nearly of that with “life extensions”.

“This is a fundamental change,” says BNEF’s chief analyst in Australia, Kobad Bhavnagri. “Australia’s power sector is expected to fundamentally change over the next 25 years as an influx of end-user PV and energy storage is driven into the system.”

He estimates that $A116 billion will be invested to achieve this near 60 per cent renewable energy capacity, and 89 per cent of that money will be spent on renewables themselves.