The Last 0.2%: Solar, Batteries and the Cost of Eliminating Gas

A ten-year thought experiment across South Australia, Victoria and NSW

What Would It Actually Take?

Australia’s electricity debate is usually conducted in percentages: renewable penetration, emissions reductions, storage targets and dates by which coal should disappear. Those numbers are useful, but they do not give much intuition for the physical system underneath them.

So I tried a different approach. I asked a simple question:

If South Australia had to cover its electricity demand with solar, its existing wind fleet and batteries, what would we actually need to build—and what might it cost?

This was never intended as a forecast or a proposed electricity plan. It was a thought experiment designed to expose the scale of the problem. The point was not to prove that renewables “work” or “don’t work.” It was to understand what changes as we progressively replace convenient assumptions with more demanding ones.

We began with an ordinary day. How much electricity does South Australia consume? How much of it is consumed after the sun goes down? How much extra solar would be required to meet daytime demand while also charging a battery for the night?

That produced a manageable-looking answer—but an ordinary day is the easy problem.

We then replaced flat demand with a realistic daily demand curve. We replayed actual solar and wind conditions from 2024 and 2025. We extended that to ten years of weather, from 2016 through 2025, while holding demand and today’s generating fleet constant. That allowed us to ask what the present system would have experienced under ten different years of weather.

The result for South Australia, population 1.9M, rose to approximately 15.6 GW of grid solar and 5.1 GW/54 GWh of batteries, costing about A$45.5 billion in incremental capital. That system survived every half-hour in our ten historical weather years—but that is still not the same thing as guaranteeing future reliability.

South Australia: the existing fleet and the additional solar and storage required by the ten-weather-year no-gas model.

We then repeated the process for Victoria, population 7.2M, whose demand is much larger and whose winter conditions are less forgiving. Its ten-year no-gas result was approximately 53 GW of grid solar and 383 GWh of battery storage, at about A$213 billion.

The next step was to stop treating the states as islands.

We combined South Australia, Victoria and NSW, combined population 18M, allowing them to exchange electricity through Heywood, Project EnergyConnect and the major NSW–Victoria links. We used their end-2025 wind, grid-solar and battery fleets, fixed 2025 operational demand, and the same ten weather years.

The first three-state no-gas result required approximately:

• 131 GW of additional grid solar

• 42.5 GW of battery power

• 1,020 GWh of battery energy

• A$556 billion of incremental capital

Annualised over the lives of the assets, including financing, battery augmentation and operating allowances, that was about A$47 billion a year—roughly 17% of the three state governments’ combined annual expenditure.

This is where the exercise became especially interesting.

Tripling the major cross-border interconnectors barely changed the answer. The modeled generation-and-storage bill fell from A$556 billion to about A$538 billion, before paying for the additional transmission. Interconnectors can move electricity, but they cannot create it. When several states experience the same broad shortage, a larger wire has little surplus electricity to carry.

Tripling the wind fleet made a much greater difference.

That scenario added 22 GW of wind, taking the three states to 33 GW of wind nameplate, and still required approximately 85 GW of additional solar and 628 GWh of battery storage. Including the cost of constructing the additional wind farms, the total fell to approximately A$448 billion, or A$38 billion a year.

To put the physical scale in perspective, the resulting system had about 126 GW of wind and solar nameplate capacity serving average demand of only 13.7 GW and a coincident peak of approximately 23.3 GW. Renewable nameplate was therefore more than nine times average demand and more than five times peak demand.

South Australia, Victoria and NSW together: the lower-cost tripled-wind no-gas case, compared with average and peak demand.

That is not evidence of a simple calculation error. Solar is unavailable every night, wind output varies, batteries lose energy while charging and discharging, and the system must survive prolonged periods when renewable production is poor. Much of the generation produced during favorable weather must therefore be curtailed.

Finally, we relaxed the most severe assumption and allowed the existing gas fleet to operate for a limited number of hours.

This produced perhaps the most important intuition of the entire exercise. The four cases below show the capital staircase. Tripling the major interconnectors alone saved only A$17 billion—and that is before paying for the extra wires. Tripling wind as well saved a further A$90 billion, including the wind construction. Then, in that same tripled-wind system, allowing freely dispatched gas up to 0.25% of annual demand reduced required capital by another A$70 billion, to A$378 billion.

Four cases in the three-state thought experiment. Tripled-interconnector construction is unpriced; the additional wind fleet is included.

The gas allowance was 0.25% of annual demand, but the optimized system actually used gas for only about 0.06%—roughly 73 GWh a year. Gas was valuable because it covered the rare, controlling intervals that otherwise set the size of the entire renewable and storage fleet. The modeled fuel-and-variable operating cost was about A$11 million a year: tiny beside the A$70 billion of avoided capital, although keeping gas plants available has a fixed cost that this thought experiment does not price.

None of these figures should be read as a detailed plan for the National Electricity Market. The model simplifies transmission, ignores many local network constraints, assumes perfect coordination between states and does not constitute a formal reliability study. Some regional construction results—particularly the enormous concentration of new solar in NSW—are just optimizer artifacts rather than realistic siting proposals.

But the exercise does provide something that is often missing from the public discussion: a sense of scale.

It shows why an ordinary night is not the real storage problem; why ten years of weather matter more than a representative day; why transmission is valuable but cannot cure a shared energy shortage; why additional wind can be more valuable than still more solar; and why eliminating the final fraction of dispatchable generation can be vastly more expensive than eliminating most of it.

For anyone who wants to inspect the machinery, I include the detailed report.

Scienceofdoom Sa Vic Nsw Network Extensions And Gas Report

1.45MB ∙ PDF file

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