Variable Renewable Energy is making tremendous strides towards the predominant energy source in the NEM, but its voracious capital intensity is over-running existing transmission capacity. Consumers are faced with a $3.5bn transmission build cost over the next 20 years, which to return value relies heavily on the emergence of grid scale storage solutions. However, all grid-scale investments (VRE, storage, and transmission) could be stranded if distributed energy resources arrive at scale.
In this Chart of the week, we look at the burgeoning capital overhead of the rotation to variable renewable energy from synchronous generation. The policymakers think they have it covered with plans for large scale transmission build combined with an expanding grid scale VRE and storage market – but do they?
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