A CSIRO report shows that solar and wind power are the cheapest options for generating electricity in Australia.

Paul Graham

The GenCost report released this week found that photovoltaics and wind power are the cheapest sources of electricity generation, even when the integration costs, including storage and infrastructure, are factored in.

The report analyzes the cost of generating electricity in a number of scenarios and using different technologies, including coal, gas, hydrogen, biomass, solar and wind.

CSIRO chief energy economist Paul Graham says the cost of renewable energy increases when the integration and the amount that goes into the system are factored in, but the report takes that into account.

“We find renewables are still the cheapest technology, even if you add those integration costs,” he told Government News.

“Solar photovoltaics and wind are the two cheapest and they work well together because the wind sometimes blows when the sun isn’t shining.

Estimates range from around $ 40 per MWh for 50 percent variable renewable energies (wind and solar) to $ 70 per MWh for 90 percent.

Meanwhile, a low-emission lignite load of 40 to 80 percent drives 300 dollars per MWh.

Source: CSIRO GenCost report

The report includes estimates through 2050 that show the cost of wind and solar power will fall.

The report also found that batteries are the technology that has seen its costs drop the most year over year, helping to reduce integration costs.

According to Graham, this is mainly because batteries last longer.

“This is one of the reasons why the integration costs for renewable energy are quite low, because batteries are an important part of supporting renewable energy,” he said.

The future is renewable

The share of renewable energies in Australia’s energy is currently 23 percent and the federal government predicts that this will reach 50 percent by 2030.

With this in mind, the GenCost report gives an outlook on what the Australian power sector will look like in the future, says Graham.

“It will be a combination of wind, solar voltaics, batteries and other storage,” he says.

“We will develop many renewable zones in regional areas and they will become important solar and wind production areas.”

According to Graham, Australia has access to large amounts of good quality renewable energy that is likely to dominate its future energy production.

“Even if the world used CO2 capture and storage to generate electricity, it would not be used here because it would still be expensive compared to our extremely inexpensive renewable energies.”

Hydrogen and nuclear energy

The report notes that hydrogen is embarking on a path similar to more established renewable energies and suggests significant cost reductions in hydrogen technologies over the next few decades.

“Hydrogen is something we are watching closely because it has been shown to be a potential low-emission fuel around the world,” said Graham.

He said while the current focus is not on nuclear power plants, nuclear power generation could cut rail if the cost of small modular nuclear reactors goes down.

“Then we can think about doing that later, but the advice we got from the stakeholders was that they didn’t think we would build a (nuclear) power plant before 2030,” he said.

You can find the report here.

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