The Commonwealth Scientific and Industrial Research Organisation (CSIRO) has declared that solar photovoltaics (PV) and wind continue to be the cheapest sources of new electricity generation capacity in Australia.
Chief Energy Economist at the CSIRO, Paul Graham said the organisation’s report, GenCost 2020-21, saw it and the Australian Energy Market Operator (AEMO) consult with industry stakeholders to estimate the cost to generate electricity for new power plants.
“This year’s Report used a new, more accurate approach for analysing the cost of renewables, like solar and wind, to include additional ‘integration’ costs such as storage and new transmission infrastructure, and still found solar and wind continue to be the cheapest sources of new-build electricity generation,” Mr Graham said.
He said an early draft of the Report, released to stakeholders in December, had been improved to reflect feedback about the impact of weather variability on driving up integration costs.
“The final Report addresses this feedback,” Mr Graham said.
“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,” he said.
“We took the integration costs from the highest of nine historical weather years.
“Stakeholders asked that the analysis recognise batteries are achieving longer lives before they need to be replaced and costing less, meaning the costs of storage from batteries is lower than previously thought.”
Mr Graham said the Report found solar and wind continued to be the cheapest sources of new-build electricity; battery costs fell the most in 2020-21 compared to any other generation or storage technology and were projected to fall further; and pumped hydro was more competitive when longer durations of storage (above eight hours) were required.
He said the annual Report included hydrogen electrolysers for the first time and found hydrogen was 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,” he said.
The CSIRO’s 81-page Report can be downloaded at this PS News link.
