Despite the costs involved, wind and solar energy will continue to be the cheapest source of electricity for Australians.
According to a draft of the CSIRO’s latest GenCost resort, renewable energy continues to come in cheapest, compared with the cost of different forms of electricity sources (including coal and gas).
The report shows solar and wind are the cheapest sources of electricity generation and are predicted to remain the cheapest in 2030 even when new transmission network infrastructure and energy storage are taken into account.
The levelised cost of new wind and solar projects are likely to fall below $50 per MWh, as estimated in the GenCost assessment.
A maximum additional cost of $29 per MWh for new network infrastructure and energy storage is estimated. This estimate even applies to scenarios with up to 90 per cent renewable energy penetration.
Essentially, in nearly every instance, the combined cost of renewable energy, storage and networks would still be cheaper than building new gas or coal generation.
Paul Graham, CSIRO chief energy economist, says this latest GenCost report took into account all the costs involved with supporting different energies.
“Even taking into account these extra system integration costs, solar photovoltaics (PV) and wind continue to be the cheapest sources of electricity for any expected share of renewables in the grid – anywhere from 50 per cent to 100 per cent.”
“This is projected to continue to be the case throughout the projection period to 2050.”
The ongoing development of renewable technologies will continue to drive down the cost of solar and wind energy.
Comparatively, there is little room for improvements to gas and coal technologies, and only the smallest cost reductions for fossil duels are expected.
The possibility of a carbon price being reintroduced (as is likely due to future governments introducing climate policies) was taken into consideration, increasing the cost benefits of renewable energy further.
Nuclear energy remains one of the most expensive sources of new generation capacity.
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