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Australian report shows renewables now the cheapest source of power

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A report from Australia’s national science agency CSIRO (Commonwealth Science and Industrial Research Organisation) and energy market operator AEMO has found that solar and wind technologies are now the lowest costing form of electricity generation.

The Gannawarra Solar Farm and Energy Storage System is one of the largest renewable energy sources in Australia
(Gannawarra Solar Farm and Energy Storage System - image via Edify Energy)

The collaborative report involved consultation with a range of industry stakeholders, including reviewing draft estimates, projections, industry workshops and briefings. It took into account a levelised cost of electricity (LCOE), factoring in operating as well as investment costs.

Fossil fuel plants require relatively low capital costs but have high operating expenses, while wind and solar plants can be expensive to build, but then are much cheaper to operate.

The report was created as an annual benchmark to guide strategic decision making through analysing changing technological costs year on 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,” said Paul Graham, CSIRO’s Chief Energy Economist.

“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.

“At a global level, the investment costs of a wide range of low emission generation technologies are projected to continue to fall, and 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.

“This also holds when the cost of fossil generation technology is adjusted for climate policy risk or not.”

The Acciona Waste-to-Energy plant is an innovative design for creating renewable energy in Australia

Around 60% of Australia’s electricity comes from coal, with the continued usage becoming a major issue on the political stage. However renewable energy has been shown to be increasing significantly in the area in the last few years thanks to major projects such as the Gannawarra solar farm and Acciona’s Waste-to-Energy plant.

The report goes on to highlight that in order to maximise the value of low-cost renewable energy, further investment will have to go in to new technologies, creating more jobs within the industry.

“Data from GenCost 2018, combined with some of our previous research, indicates we may need additional flexible technologies – such as energy storage, demand management, and peaking gas plants – if the share of variable renewables increases beyond 50 per cent.”

Work within the growing power & renewables industry

Fircroft recruits technical engineers throughout the worldwide power and renewables industry. View our job boards to see all the latest opportunities.

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Australian report shows renewables now the cheapest source of power - Time to read 3 min
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