Solar & wind still cheapest generation sources in Australia, despite costly integration, CSIRO finds


The CSIRO and Australian Energy Market Operator (AEMO) have consulted with industry stakeholders to deliver a new, more accurate approach for analysing the costs of new power plants, with their findings published in the 2020-21 GenCost report released today.

Despite the troublesome and often high integration costs of connecting renewable projects in Australia, solar PV and wind continue to be the cheapest sources of new electricity generation capacity. The report also found the costs of storage from batteries is lower than previously thought.

Battery costs fell the most in 2020-21 when compared to any other generation and storage technologies, and are projected to continue to fall, the CSIRO found. Lower battery storage costs underpin the long-term competitiveness of renewables.

The report also included hydrogen electrolysers for the first time and found the technology is following a similar trajectory to more established renewables. “With increased interest in global deployment, and many demonstration projects worldwide, substantial cost reductions in hydrogen technologies are expected over the next decades,” the CSIRO said.

The CSIRO’s Chief Energy Economist, Paul Graham, said an early draft of the report had been released to stakeholders in December 2020 and was subsequently improved to reflect feedback about the impact of weather variability on driving up these integration costs. “The final report addresses this feedback: our analysis of renewable integration costs now includes greater recognition of this year to year weather variability and the impact it has on electricity demand and supply,” Graham said.

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