Report: CSIRO confirms renewables still cheapest

Solar photovoltaics (PV) and wind continue to be the cheapest sources of new electricity generation capacity in Australia, even when the integration costs of renewables are included, according to the final 2020-21 GenCost Report, released this week.

Each year Australia’s national science agency, CSIRO, and the Australian Energy Market Operator (AEMO) consult with industry stakeholders to estimate the cost to generate electricity for new power plants in Australia through their GenCost report.

The report from CSIRO and AEMO uses an approach for analysing the cost of renewables like solar and wind including additional ‘integration’ costs such as storage and new transmission infrastructure, and found solar and wind continue to be the cheapest sources of new-build electricity generation.

This report concludes that:

• Solar and wind continue to be the cheapest sources of new-build electricity.
• Battery costs fell the most in 2020-21 compared to any other generation or storage technology and are projected to continue to fall. Lower battery storage costs underpin the long-term competitiveness of renewables.
• Pumped hydro is also important and is more competitive when longer durations of storage (above eight hours) are required.
• The new approach is a model of the electricity system that optimises the amount of storage needed, and also includes additional transmission expenditure.
• Previous reports added arbitrary amounts of storage costs and did not include transmission or other costs.

For the first time the report includes hydrogen electrolysers and finds that hydrogen is following a similar trajectory to more established renewables. Due to increased interest in global deployment and many demonstration projects worldwide, substantial cost reductions in hydrogen technologies are expected over the next decades.

For further information and access to the report, visit CSIRO