Nuclear still most expensive energy, says CSIRO
Renewable energy from the sun and wind remains the cheapest form of newly built electricity generation, according to GenCost’s draft annual report.
Nuclear remains the most expensive form of newly installed electricity generation, and renewable energy from the sun and wind the cheapest, according to GenCost’s draft annual report.
The collaboration between the CSIRO and the Australian Energy Market Operator each year creates a benchmark – the “levelised cost of electricity” – to compare the competitiveness of different electricity generation technologies built now and in the future.
The latest report incorporates criticism that GenCost’s previous estimates were from 2030, and failed to capture the billions of dollars spent on building green energy infrastructure in the preceding years.
“While technically correct, some stakeholders interpreted this approach as hiding the cost of creating the existing system in 2030,” the GenCost report said.
To address this issue, GenCost calculated an LCOE for 2023, and found it led to higher costs for renewable energy, but still left it as the most competitive form of new-build electricity generation.
CSIRO chief energy economist and GenCost lead author Paul Graham said that the new approach assured there were “no free rides” for renewable energy project costs, and that the estimates created a “like-for-like” comparison to guide policymakers and investors.
Large-scale solar power was estimated to cost between $47 and $79 per megawatt hour from 2023, falling to $36-$61 per MWh in 2030 as technology costs decline through to 2050 – an assumption that is extended across the different technologies.
Electricity from a newly built onshore wind project was estimated to cost $66-$109 per MWh now and $44-$78 from 2030.
With the cost of technology assumed to fall over the coming years and decades, half to three quarters of the higher costs today were due to investors having to pay inflated 2023 technology prices, the report said.
“The remainder is due to the cost of the pre-2030 committed projects which must be paid for in the 2023 analysis, but are considered existing capacity at no cost in 2030,” it said.
In contrast, a megawatt hour from new brown coal projects was estimated to cost $118-$190 in 2023, and slightly lower at $110-$175 per MWh from 2030 – or more than twice the cost of the cheapest renewable options.
Gas was estimated at $124-$183 now and $79-$136 from 2030. Black coal with carbon capture and storage was estimated to produce electricity at a cost of between $193 and $364 per MWh in 2023, and $161-$256 from 2030.
A mix of wind and solar including integration costs when they represent 60 per cent or more of total electricity generation was estimated at about $90-$135 per MWh in 2023, and about $65-100 by the end of the decade.
Climate Change and Energy Minister Chris Bowen said “the latest GenCost report reiterates what we already know – renewable energy is the cheapest form of energy in Australia now and in 2030, even when accounting for storage and transmission costs”.
“The Albanese government is making sure more households and businesses have access to abundant, affordable renewables,” Mr Bowen said.
In a blow to the Coalition’s efforts to overturn the ban on nuclear energy, electricity created from the new breed of small modular nuclear reactors, which are yet to be used on a commercial basis, was the most expensive – at $382-$636 per MWh in 2023, and $212-$353 from 2030.
Mr Graham said nuclear was “showing up as one of the higher cost technologies, there’s no denying that”. There was also the issue that it would be 15 years “at the earliest” for SMRs to be commercially viable. “That does make it a difficult project for contributing significantly to our decarbonisation plans,” he said.