CSIRO Releases 2023-24 GenCost Report

Key Points:

• Renewables remain the lowest-cost new electricity technology.
• Large-scale nuclear technology costs included for the first time.
• Future wind costs revised upwards.

CSIRO, in partnership with the Australian Energy Market Operator (AEMO), has released the 2023-24 GenCost report, a leading economic analysis of the costs associated with building future electricity generation, storage, and hydrogen production in Australia.

Significant Updates:

• Inclusion of Large-Scale Nuclear: Responding to increased stakeholder interest, this edition includes cost assessments for large-scale nuclear power for the first time. Despite nuclear being more expensive than renewables and requiring at least 15 years for development, the report found no technical barriers to its implementation in Australia.
• Wind Power Costs: Projections for onshore and offshore wind costs have been revised upwards due to slow recovery from global inflationary pressures.
• Renewables’ Competitive Position: Renewables, even with associated storage and transmission costs, remain the lowest-cost new build technology. This is due to a decade of cost reductions for wind, solar photovoltaics (PV), and batteries prior to the pandemic.

Stakeholder Engagement: CSIRO’s Director of Energy, Dr. Dietmar Tourbier, emphasised the importance of stakeholder feedback, which included over 40 written submissions and participation from more than 200 industry webinar attendees. This feedback is crucial as cost forecasts can fluctuate significantly, and diverse technologies are necessary for the transition to net zero.

Report Highlights:

• Nuclear Power: Based on South Korea’s successful nuclear program, the cost estimates for large-scale nuclear assume a continuous building program in Australia. The initial investment would be high, but costs could decrease over time.
• Solar Thermal: Revised cost estimations now show solar thermal power to be competitive with nuclear and other non-renewables that utilize carbon capture and storage (CCS) technologies.
• Inflation Impact: While inflationary pressures have eased, their impact varies across technologies. Onshore wind costs increased by 8%, while large-scale solar PV costs decreased by the same proportion. Gas turbine costs saw an increase of up to 14%, while other technologies remained relatively steady.

Additional Resources: The report includes a new frequently asked questions section (Appendix D) to address common stakeholder queries from current and past consultations.

AEMO’s Executive General Manager of System Design, Ms. Merryn York, and CSIRO’s Chief Energy Economist and GenCost lead author, Paul Graham, highlighted the importance of the GenCost report in strategic planning and policy analysis, particularly for the Integrated System Plan.

For more detailed information, the full report can be accessed on the GenCost website.

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