The Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Australian Energy Market Operator (AEMO) have jointly declared wind and solar to be the cheapest source of electricity generation and storage in Australia.
Admitting that inflation and supply chain disruptions were likely to put cost reductions on hold over the next year, CSIRO and AEMO worked with industry to give an updated cost estimate for large-scale electricity generation in Australia.
Chief Executive of CSIRO, Larry Marshall said CSIRO’s annual GenCost for 2021-22 confirmed the findings even when considering additional integration costs arising due to the variable output of renewables such as energy storage and transmission.
“With the world’s largest penetration of rooftop solar, unique critical energy metals, a world class research sector and a highly skilled workforce, Australia can turn our challenges into the immense opportunity of being a global leader in renewable energy,” Dr Marshall said.
“Projections in the Report assume that cost reductions for all technologies will stall for the next 12 months because tight global supply chains will require more time to recover from the pandemic.”
He said however that after the current inflationary cycle ended, solar, wind, and batteries were all projected to keep becoming cheaper.
Chief Energy Economist at CSIRO, Paul Graham said researchers had observed year-on-year cost reductions for most technologies and this year’s Report was no exception.
“What will be different in the next year is that we will have a confluence of factors impacting project costs,” Mr Graham said.
“The war in Ukraine has resulted in fossil energy price inflation which flows through to all parts of the economy through transport and energy costs,” he said.
“We also have tight supply chains that are still recovering.”
Executive General Manager, System Design at AEMO, Merryn York said the analysis showed that timely investment in new, firmed renewables would provide the most economic form of electricity generation moving forward.
CSIRO and AEMO’s 85-page joint Report can be downloaded at this PS News link.
