The Hidden Costs of Wind Generation in a Thermal Power System: What Cost?

Abstract

New renewable energy generation in Australia is unambiguously more expensive than thermal plant, at least when comparing direct costs. The federal government claims the 20 per cent renewable energy target will increase electricity tariffs by 4 per cent. Apart from the direct costs, critics of renewables cite additional 'hidden costs' arising from the intermittency of wind and the subsequent causation of 'backup plant' for system security. South Australia, where wind's market share now exceeds 17 per cent, provides a valuable case study to analyse 'hidden costs'. The evidence is that hidden costs are trivial and the government's claim appears accurate.