The cheapest and lowest emissions option to replace Liddell power station is clean energy backed up by storage, a new report by energy analytics firm RepuTex says.
The NSW renewable road map scenario, where wind and solar power are backed up by batteries, would generate 17 per cent cheaper electricity and fewer emissions than replacing Liddell with gas, the Scenarios for the replacement of the Liddell power station report, commissioned by Greenpeace, found.
With Liddell due to shut down by April 2023, the report modelled three scenarios for the National Electricity Market (NEM) to replace the 2000megawatt power station.
The first - current policies at time of publication i.e 2.6 gigawatts of new renewables are added to the NEM by July 2023, the second - in addition to the central case, the market builds an additional 1000 megawatts of renewables and third - in addition to the central case, 1000 megawatts of new peaking gas is added to the NEM by July 2023
Reputex's analysis found that the renewable-powered market solution, which would see 1000 megawatts of new renewable capacity built to replace Liddell, offers the best value for money and makes the greatest impact on lowering Australia's emissions.
The wholesale electricity price under the renewables scenario by 2026 is $35 megawatts per hour (MWh) versus $42/MWh for the "gas" scenario.
"Renewables firmed with storage solves the so-called 'energy trilemma' - affordable, reliable and cleaner power," Simon Holmes à Court, senior advisor to the Climate and Energy College at Melbourne University, said.
"This report demonstrates that by continuing to add renewables and storage to NSW's grid, the state will enjoy reliable power that's cheaper and much better for the environment than gas."
The central finding is also at odds with the federal government's argument that gas-peaking power is crucial for the "reliability" of the grid after the closure of Liddell.
"The federal government's obsession with fossil gas is undermining private sector investment in our energy system," Mr Holmes à Court said.
"Economics and technology have overtaken the federal government's ideology.
"It needs to drop the obsession with gas, and let the market complete the clean replacement of Liddell - a transition that is creating jobs for the Hunter and securing a lower cost, reliable energy supply.
"Business, state governments of all stripes, and Australia's major trading partners are all ditching coal and gas for renewables and storage because the economics overwhelmingly win out."
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