100% renewable electricity in Australia

We present an energy balance analysis of the Australian National Electricity Market (NEM) in a 100% renewable energy scenario in which wind and photovoltaics (PV) provides 90% of the annual electricity. The key outcome of our modelling is that the additional cost of balancing renewable energy supply with demand on an hourly basis throughout the year is modest: AU$25-30/MWh (US$19-23/MWh). In our modelling we avoid heroic assumptions about future technology development by only including technology that has already been deployed in large quantities (> 100 Gigawatts), namely PV, wind, high voltage transmission (HVDC, HVAC) and pumped hydro energy storage (PHES). PHES constitutes 97% of worldwide electricity storage but is neglected in many analyses. In our scenarios wind and PV contributes about 90% of annual electricity, while existing hydroelectricity and biomass contributes about 10%. We use historical data for wind, sun and demand for every hour of the years 2006-10. Very wide distribution of PV and wind reduces supply shortfalls by taking advantage of different weather systems. Energy balance between supply and demand is maintained by adding sufficient PHES, HVDC/HVAC and excess wind and PV capacity. We term the cost of these additions as the levelised cost of balancing (LCOB). LCOB plus the levelised cost of annual generation (LCOG), combine to give the levelised cost of electricity (LCOE). Using 2016 prices prevailing in Australia, we estimate that LCOB is AU$28/MWh, LCOG is AU$65/MWh and LCOE is AU$93/MWh. This can be compared with the estimated LCOE from a new supercritical black coal power station in Australia of AU$80/MWh. Much of Australia�s coal power stations will need to be replaced over the next 15 years. LCOE of renewables is almost certain to decrease due to rapidly falling cost of wind and PV. With PV and wind in the price range of AU$50/MWh, the LCOE of a balanced 100% renewable electricity system is around AU$75/MWh. Importantly, the LCOB calculated in this work is an upper bound � we use 2016 prices and do not include demand management or batteries. A large fraction of LCOB relates to periods of several successive days of overcast and windless weather that occur once every few years. Substantial reductions in LCOB are possible through contractual load shedding, the occasional use of legacy coal and gas generators to charge PHES reservoirs, and management of the charging times of batteries in electric cars. Although we have not modelled dynamical stability on a time scale of sub-seconds to minutes we note that PHES can provide excellent inertial energy, spinning reserve, rapid start, black start capability, voltage regulation and frequency control.Support from the Australian Renewable Energy Agency (ARENA) for PHES site searching and the development of cost models for PHES is gratefully acknowledged