SA’s electricity generation issues have been well documented over the past months as rapid increases in renewable power generation capacity – mostly from wind turbines – to more than 40% on average and as much as 80% on some days, has helped drive gas and coal-fired generators out of the state’s market.

In fact, RISC says, SA’s generation has exceeded demand for periods of up to 10 hours, providing as much as 120% of demand during off peak periods.

As the renewables share increases, the profitability of traditional baseload generators drops, and they can be forced out of the market, creating further problems.

RISC warned the erosion of traditional baseload generation appeared to have already started in WA, with the share of electricity supplied by coal and gas dropping from 95% in 2006 to less than 90% last year.

Alarmingly, the share of gas as a fuel is dropping faster than coal.

Currently every new unit of renewable energy replaces one-third of a unit of coal and two-thirds of a unit of gas, which RISC believes is because gas is marginally more expensive than coal as a generation source.

RISC warned that this trend of replacing gas fired generation over coal had adverse implications both environmentally and economically.

“Gas fired generation is far more complementary to rising renewables than coal fired generation due to its greater responsiveness and faster start-up time,” RISC said.

Greenhouse gas emissions are reduced by more than 50% when a unit of renewable energy replaces coal fired generation rather than gas fired generation.

In WA, coal-fired power stations produce roughly 1-1.5 tonnes of carbon dioxide per megawatt hour, whereas gas-fired power stations produce about half a tonne of CO2 per megawatt hour.

This means that in order to achieve the same amount of emissions reductions approximately twice as much investment in renewables is required if gas fired generation is turned off rather than coal.

RISC believes the current trends will lead to a substantially greater increase in the future cost of electricity than is required for a given emissions reduction target.

Although WA does not have a renewable energy target there has still been significant growth in renewable power in WA due in part to both national and state subsidies.

Power generated by renewables in the state’s main power grid the South West Interconnected System has risen from less than 5% 10 years ago to more than 12% last year.

RISC’s analysis shows that the rate of increase of renewable energy generation is speeding up and that by 2020 the SWIS will likely have over 20% of its electricity generated by renewable sources – mostly from wind turbines and solar photovoltaics.