Is coal now more expensive than solar?

pile of coal

The declining cost of solar is making Aussie coal exports look increasingly expensive.

Not-so-strange bedfellows Greg “Smiley” Hunt and Big Clive emerged hand in hand after negotiating the “Dirty Deeds Done Dirt Cheap” (sorry “Direct Action”) legislation earlier this week. Meanwhile a less publicised news article revealed the dirty truth behind the future, or otherwise, of fossil fuel exports to one of our major markets.

That truth is that it is now more expensive for India to import Aussie coal than produce their own solar power.

The warning bells must be clanging and the teeth gnashing at FossilFuel HQ as the data coming in from India’s latest solar farm auctions show that it is cheaper for India to produce their own solar power that import Australian coal.

The new Indian government has shown its energy colours and has supported massive renewable projects around the world’s biggest democracy. The solar auctions that have taken place demonstrate how far solar has fallen down the cost curve — to the great concern of Australian coal exporters to India.

“Wind, solar and hydro facilities can be built faster and / or at lower [Power Purchase Agreement] PPAs. Additionally, the use of renewable energy incorporates a zero fuel cost, such that there is an inbuilt deflationary driver – i.e. zero indexation,’ said a research note from the Institute of Energy Economics and Financial Analysis (IEEFA).

“Given the recent drive by the Reserve Bank of India (RBI) to prioritise the sustained reduction in inflation, renewables support a series of GoI / RBI targets. Importing thermal coal achieves none of these goals, and more likely contradicts them.”

Meanwhile here in Oz, the agenda couldn’t be clearer. Save the anachronistic fossil fuel industry at the expense of viable and environmentally-friendly renewables such as solar power.

Experts have been scathing of this week’s Direct Action deal.

“Direct Action is a subsidy scheme that gives taxpayers’ money to companies for claimed emissions reductions. It is vastly inferior to putting a price on emissions,” said Frank Jotzo, Director, Centre for Climate Economics and Policy at the Australian National University.

So no wonder Hunty is doing dirty deals to pour taxpayer billions into equally dirty industries, paying them to pollute during an [alleged] budget emergency. With a major export market like India rapidly shutting the door, they’ll have to raise their domestic electricity prices further.

With coal billionaire exporter (and part time populist pollie) Clive Palmer helping force through the legislation, the question is coal more expensive than solar for taxpayers must be a resounding “YES”.


  1. EmpowerRepower says

    Another great read, Rich, thank you. There is such a weird disconnect between the words coming out of the mouths of some of our “coal is good for humanity” politicians and the realities of the energy sector and our changing climate.

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