A new report on the cost of generating electricity in Australia has been published jointly by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Australian Energy market Operator (AEMO).
Working collaboratively with energy industry stakeholders, the first GenCost report ‘GenCost 2018’ updates the cost estimates for generating electricity from new power plants in Australia finding that solar and wind technologies have the lowest costs.
Chief Energy Economist at CSIRO and report lead author Paul Graham said GenCost 2018 was an annual benchmark for guiding strategic decision making, in view of the significant changes in technology costs each year.
“Electricity generation costs are a key ingredient into the electricity sector modelling which underpins much of the sector’s strategic planning and policy analysis,” Mr Graham said.
“Our data confirms that while existing fossil fuel power plants are competitive due to their sunk capital costs, solar and wind generation technologies are currently the lowest-cost ways to generate electricity for Australia, compared to any other new-build technology.”
He said that globally, the investment costs of a new generation technologies were expected to continue falling.
“We found new-build renewable generation to be least cost, including when we add the cost of two or six hours of energy storage to wind and solar,” he said.
Group Manager, Forecasting at AEMO, Nicola Falcon said the Operator looked forward to using the GenCost figures.
“The reports will act as the foundation for initial discussions with stakeholders when we commence our modelling inputs and scenario consultations for the next Integrated System Plan,” Ms Falcon said.
The authors of the report said they largely based their analysis on levelised cost of electricity (LCOE), which included operating as well as investment costs as this was the best way to compare the costs of different technologies.
They said this too account of fossil fuel plants which required relatively low capital costs, but higher operating expenses, and wind and solar which require high capital outlays but low operating expenses.
The 72-page GenCost 2018 can be accessed at this PS News link.
