What is cheaper than free?

July 28, 2026

Is wind and solar energy cheap? Yes, because they are often free.

In the AEMO bid stack, which energy suppliers offer to meet at cost, wind and solar often bid zero.

The question any energy skeptic needs to ask is which energy supplier sets the marginal cost.

That is, who makes the final and highest bid that determines the price for all suppliers?

Here are the proportions.

Type of fuel	Part of delivery intervals as an almost trivial price setter
Hydro	34–36%
Black coal	22–30%
Gas	10-15%
battery (discharge)	5–8% (rapidly growing)
Brown coal	5–7%
the wind	5–8%
Grid-scale solar	3–6%
Battery charging (load)	2–4%
Other	<2%

Here is CSIRO’s latest SLCOE, which includes distribution costs.

ank	Technology	Relative cost to consumers
1	Current Hydro	The least
2	Current black coal	Too little (heavily depreciated assets)
3	Current brown coal	less (although emissions are higher)
4	Coastal wind (good source)	less
5	Utility Solar PV	Low – moderate
6	Wind + batteries (strong renewables)	moderate
7	Current combined cycle gas	Moderate – High (depending on fuel price)
8	Open Cycle Gas Packer	high
9	New black coal	Very high
10	nuclear	Very high (in Australia, based on current assumptions)

And finally, the technology versus commodity curves clearly show a trend toward higher fossil fuel production costs and lower renewable production costs.

By 2050, Australia has two choices. Most of our 18 coal-fired power stations will need to be replaced. The fleet is old, and most of it is past or fast approaching its 50-year age.

Rank	Power station	State	Type of coal	First Unit Commission	Approximate Age (2026)	Capacity (MW)
1	Yalorin	VIC	Brown	1973	53 years	1,480
2	Gladstone	QLD	black	1976	50 years	1,680
3	Wells Point B	NSW	black	1978	48 years	1,320
4	Maja d	W.A	black	1981	45 years	854
5	Bayswater	NSW	black	1982	44 years	2,640
6	Erring	NSW	black	1982	44 years	2,880
7	Loy Yang A	VIC	Brown	1984	42 years	2,210
8	Tarong	QLD	black	1984	42 years	1,400
9	Colloid b	QLD	black	1988	38 years	700
10	Mount Piper	NSW	black	1993	33 years	1,400
11	Stanwell	QLD	black	1993	33 years	1,460
12	Loy Yang b	VIC	Brown	1993	33 years	1,070
13	Collie	W.A	black	1999	27 years	340
14	Colloid c	QLD	black	2001	25 years	840*
15	Malmiran	QLD	black	2002	24 years	852
16	Tarong North	QLD	black	2002	24 years	443
17	Cogan Creek	QLD	black	2007	19 years	750
18	Blue Water 1	W.A	black	2009	17 years	208
19	Blue Water 2	W.A	black	2010	16 years	208

The LVO proposes to replace them with 23 supercritical models at 1000MW, $6bn each, which will take several years longer to complete (about ten years each). That’s why new black coal is so expensive: its high recovery costs are compounded by the fact that it’s only profitable for part of the day (when it can compete during wind and solar shortages), meaning fat subsidies to keep it running.

Or we can rebuild a clean and profitable grid (even with some subsidy in the absence of a carbon price) in which renewable storage and cheap gas reduce the cost to the modest price setter, always through cheap batteries (often decentralized) and cheap gas (which is why I focus so much on domestic carbon).

This is your electricity bill. What about your transport bill?

The day will come when you will no longer need a car. Or you want one and let it make you money by driving it as a taxi when you’re not using it. For example, you can let it act as a taxi while you are at work or sleeping. Electric robots will dominate the streets, and we’ll only need a third of the resulting decongested cities. Do you want to cut your annual travel bill by two-thirds or do you own a coal car that costs more than it does today?

Converting the grid to renewables is a cost-effective, carbon-neutral, and progressive no-brainer for consumers.

It’s no wonder Kane Henry is so angry.

In a keynote speech to the Clean Energy Council on Wednesday, Henry says it is the same “second-rate bigots with first-rate egos” who forced Australia to reject a carbon price – which he describes as “the most economically and scientifically rational climate policy in the world”.