The CSIRO has released the 2023-24 GenCost Report draft, a leading report on the cost of building future electricity generation in Australia, for a six-week public consultation.
The draft report indicates that new build costs have generally stabilised since the 20% increase in GenCost last year, with some outliers. Onshore wind generation costs rose by 8%, while large-scale solar photovoltaic (PV) fell by the same proportion. Gas turbine technologies increased by 14%.
The report highlights nuclear small modular reactors (SMRs) as the most cost-effective technology, based on data from the most advanced US SMR project.
The study suggests that the inconsistent impact of global inflation is due to the unique material inputs and supply chains of each new build technology.
GenCost is an annual partnership between the CSIRO and the Australian Energy Market Operator (AEMO) to update new-build electricity generation, storage, and hydrogen production costs while emphasising stakeholder engagement.
The 2023–24 draft report includes pre–2030 integration costs (e.g., storage and transmission for variable renewables) in the levelised cost of electricity (LCOE) statistics in response to feedback on the previous report. This tackles the concern that the cost of the renewable transition is underestimated when pre-2030 initiatives are excluded.
Variable renewables were determined to have the lowest cost range of any new-build technology, although this modification increases cost estimations.
CSIRO’s Director of Energy Dr Dietmar Tourbier stated that GenCost is a crucial economic analysis tool for the Australian energy market to plan for future electricity generation.
“The evolving landscape of cost-drivers is complex, and shaped by new and changing technologies, rising consumption and our transition to net-zero emissions,” Dr Tourbier said.
According to him, GenCost utilises the most recent data cycles to offer unbiased and current insights into the electricity market.
“As we work to reduce our emissions, GenCost plays a pivotal role in guiding decision-makers to plan and build reliable, low-cost energy solutions that will help power the future of Australia,” he added.
CSIRO Chief Energy Economist and GenCost lead author Paul Graham emphasised the importance of stakeholder input in GenCost and anticipates receiving feedback through the consultation process.
“Technology costs are a crucial piece of the larger puzzle, providing vital input to our electricity sector analysis. This underscores why consultation is key to ensuring the relevance of our data and projections,” Graham said.
“We value the deep collective expertise of the energy community to enhance the quality of our work,” he noted. “It’s important to recognise that no single individual or organisation can comprehensively track the detailed evolution of all energy technologies.”
The GenCost consultation draft shows steady battery costs at 2%, offshore wind decreasing by 9%, and increased costs for pumped hydro, wave, and tidal energy technologies, reflecting a combination of new information and inflationary pressures.
“We welcome the continued consultation with industry and other stakeholders to update electricity generation and storage cost trajectories,” AEMO Executive General Manager System Design Merryn York said.
“Updated cost assessments are an important input for planning the transition of the National Electricity Market to efficiently deliver secure, reliable and affordable electricity for consumers,” she added.
