Why wind and solar remain the cheapest energy options
The GenCost 2024-25 report, produced at CSIRO's Newcastle Energy Centre, argues that Australia's electricity network relies on a mix of technologies, because no single option can deliver all the capabilities required for a reliable, secure and flexible supply.
It also found that rising construction costs and supply chain constraints for some technologies remain a challenge.
CSIRO's chief energy economist and GenCost lead author Paul Graham said fewer submissions were received during this year's consultation process than previously, which reflected a broader range of perspectives.
"Most input we received focused on technologies already in development or under construction, such as pumped hydro, wind, solar photovoltaics, gas, solar thermal and electrolysers," he said.
"Following consultation, cost projections for most technologies have been revised upwards, despite continued declines in solar PV and battery costs.
Key drivers of these changes include:
Overall, the report found renewables (wind and solar) backed by storage and transmission remained the lowest-cost new-build electricity generation technologies.
However, it found that offshore wind remains a higher cost option to on-shore wind, even though transmission costs tended to be lower.
"Offshore wind can be built much nearer to Australia's major cities, which means they can avoid the higher transmission costs faced by onshore projects," Mr Graham said.
"However, overall, offshore wind generation is generally higher cost than onshore wind. Offshore wind runs the risk of a first-of-a-kind premium, given Australia's workforce does not have any experience building this type of project."
After renewables, gas with carbon capture and storage (CCS) and large-scale nuclear were the next lowest cost options.
As neither is currently deployed for electricity generation in Australia, they could be subject to longer lead times and first-of-a-kind premiums.
Small modular nuclear reactors (SMRs) remain the highest cost option, even with new data from Canada's Darlington project.
This represented the first commercial-scale benchmark from a western country and fell within the range previously projected by GenCost.
Climate Change and Energy Chris Bowen said the GenCost report supported the government's net-zero policy.
"Australia has the best wind and sun to power our future and we're harnessing it to secure the better, fairer energy system our nation deserves," he said.
"The latest GenCost confirms what our energy experts have been saying for a long time: the most affordable path to deliver reliable energy in future is with new renewable generation and storage, firmed by gas and pumped hydro.
This year's report calculated the potential cost advantages of nuclear technology's longer operational life for the first time.
"Our finding is that there are no unique cost advantages arising from nuclear technology's long operational life. Similar cost savings are achievable from shorter lived technologies, even accounting for the fact that shorter lived technologies need to be built twice to achieve the same operational life,' the report said.
The CSIRO's director of energy, Dr Dietmar Tourbier, said GenCost is Australia's most comprehensive source of electricity generation cost projections, supporting evidence-based decisions across the sector.
"We refresh forecasts annually using the best available data at the time to ensure GenCost reflects current market conditions and remains a trusted benchmark," he said.
"By drawing on expert input from across the electricity sector, GenCost reinforces CSIRO's role as a neutral source of scientific insight to help guide Australia's energy transition."
Electricity generated by solar and on-shore wind projects remains the cheapest option for Australia, while small nuclear reactors are the most expensive, the latest report from the CSIRO and energy market regulator has found.
The GenCost 2024-25 report, produced at CSIRO's Newcastle Energy Centre, argues that Australia's electricity network relies on a mix of technologies, because no single option can deliver all the capabilities required for a reliable, secure and flexible supply.
It also found that rising construction costs and supply chain constraints for some technologies remain a challenge.
CSIRO's chief energy economist and GenCost lead author Paul Graham said fewer submissions were received during this year's consultation process than previously, which reflected a broader range of perspectives.
"Most input we received focused on technologies already in development or under construction, such as pumped hydro, wind, solar photovoltaics, gas, solar thermal and electrolysers," he said.
"Following consultation, cost projections for most technologies have been revised upwards, despite continued declines in solar PV and battery costs.
Key drivers of these changes include:
Overall, the report found renewables (wind and solar) backed by storage and transmission remained the lowest-cost new-build electricity generation technologies.
However, it found that offshore wind remains a higher cost option to on-shore wind, even though transmission costs tended to be lower.
"Offshore wind can be built much nearer to Australia's major cities, which means they can avoid the higher transmission costs faced by onshore projects," Mr Graham said.
"However, overall, offshore wind generation is generally higher cost than onshore wind. Offshore wind runs the risk of a first-of-a-kind premium, given Australia's workforce does not have any experience building this type of project."
After renewables, gas with carbon capture and storage (CCS) and large-scale nuclear were the next lowest cost options.
As neither is currently deployed for electricity generation in Australia, they could be subject to longer lead times and first-of-a-kind premiums.
Small modular nuclear reactors (SMRs) remain the highest cost option, even with new data from Canada's Darlington project.
This represented the first commercial-scale benchmark from a western country and fell within the range previously projected by GenCost.
Climate Change and Energy Chris Bowen said the GenCost report supported the government's net-zero policy.
"Australia has the best wind and sun to power our future and we're harnessing it to secure the better, fairer energy system our nation deserves," he said.
"The latest GenCost confirms what our energy experts have been saying for a long time: the most affordable path to deliver reliable energy in future is with new renewable generation and storage, firmed by gas and pumped hydro.
This year's report calculated the potential cost advantages of nuclear technology's longer operational life for the first time.
"Our finding is that there are no unique cost advantages arising from nuclear technology's long operational life. Similar cost savings are achievable from shorter lived technologies, even accounting for the fact that shorter lived technologies need to be built twice to achieve the same operational life,' the report said.
The CSIRO's director of energy, Dr Dietmar Tourbier, said GenCost is Australia's most comprehensive source of electricity generation cost projections, supporting evidence-based decisions across the sector.
"We refresh forecasts annually using the best available data at the time to ensure GenCost reflects current market conditions and remains a trusted benchmark," he said.
"By drawing on expert input from across the electricity sector, GenCost reinforces CSIRO's role as a neutral source of scientific insight to help guide Australia's energy transition."
Electricity generated by solar and on-shore wind projects remains the cheapest option for Australia, while small nuclear reactors are the most expensive, the latest report from the CSIRO and energy market regulator has found.
The GenCost 2024-25 report, produced at CSIRO's Newcastle Energy Centre, argues that Australia's electricity network relies on a mix of technologies, because no single option can deliver all the capabilities required for a reliable, secure and flexible supply.
It also found that rising construction costs and supply chain constraints for some technologies remain a challenge.
CSIRO's chief energy economist and GenCost lead author Paul Graham said fewer submissions were received during this year's consultation process than previously, which reflected a broader range of perspectives.
"Most input we received focused on technologies already in development or under construction, such as pumped hydro, wind, solar photovoltaics, gas, solar thermal and electrolysers," he said.
"Following consultation, cost projections for most technologies have been revised upwards, despite continued declines in solar PV and battery costs.
Key drivers of these changes include:
Overall, the report found renewables (wind and solar) backed by storage and transmission remained the lowest-cost new-build electricity generation technologies.
However, it found that offshore wind remains a higher cost option to on-shore wind, even though transmission costs tended to be lower.
"Offshore wind can be built much nearer to Australia's major cities, which means they can avoid the higher transmission costs faced by onshore projects," Mr Graham said.
"However, overall, offshore wind generation is generally higher cost than onshore wind. Offshore wind runs the risk of a first-of-a-kind premium, given Australia's workforce does not have any experience building this type of project."
After renewables, gas with carbon capture and storage (CCS) and large-scale nuclear were the next lowest cost options.
As neither is currently deployed for electricity generation in Australia, they could be subject to longer lead times and first-of-a-kind premiums.
Small modular nuclear reactors (SMRs) remain the highest cost option, even with new data from Canada's Darlington project.
This represented the first commercial-scale benchmark from a western country and fell within the range previously projected by GenCost.
Climate Change and Energy Chris Bowen said the GenCost report supported the government's net-zero policy.
"Australia has the best wind and sun to power our future and we're harnessing it to secure the better, fairer energy system our nation deserves," he said.
"The latest GenCost confirms what our energy experts have been saying for a long time: the most affordable path to deliver reliable energy in future is with new renewable generation and storage, firmed by gas and pumped hydro.
This year's report calculated the potential cost advantages of nuclear technology's longer operational life for the first time.
"Our finding is that there are no unique cost advantages arising from nuclear technology's long operational life. Similar cost savings are achievable from shorter lived technologies, even accounting for the fact that shorter lived technologies need to be built twice to achieve the same operational life,' the report said.
The CSIRO's director of energy, Dr Dietmar Tourbier, said GenCost is Australia's most comprehensive source of electricity generation cost projections, supporting evidence-based decisions across the sector.
"We refresh forecasts annually using the best available data at the time to ensure GenCost reflects current market conditions and remains a trusted benchmark," he said.
"By drawing on expert input from across the electricity sector, GenCost reinforces CSIRO's role as a neutral source of scientific insight to help guide Australia's energy transition."
Electricity generated by solar and on-shore wind projects remains the cheapest option for Australia, while small nuclear reactors are the most expensive, the latest report from the CSIRO and energy market regulator has found.
The GenCost 2024-25 report, produced at CSIRO's Newcastle Energy Centre, argues that Australia's electricity network relies on a mix of technologies, because no single option can deliver all the capabilities required for a reliable, secure and flexible supply.
It also found that rising construction costs and supply chain constraints for some technologies remain a challenge.
CSIRO's chief energy economist and GenCost lead author Paul Graham said fewer submissions were received during this year's consultation process than previously, which reflected a broader range of perspectives.
"Most input we received focused on technologies already in development or under construction, such as pumped hydro, wind, solar photovoltaics, gas, solar thermal and electrolysers," he said.
"Following consultation, cost projections for most technologies have been revised upwards, despite continued declines in solar PV and battery costs.
Key drivers of these changes include:
Overall, the report found renewables (wind and solar) backed by storage and transmission remained the lowest-cost new-build electricity generation technologies.
However, it found that offshore wind remains a higher cost option to on-shore wind, even though transmission costs tended to be lower.
"Offshore wind can be built much nearer to Australia's major cities, which means they can avoid the higher transmission costs faced by onshore projects," Mr Graham said.
"However, overall, offshore wind generation is generally higher cost than onshore wind. Offshore wind runs the risk of a first-of-a-kind premium, given Australia's workforce does not have any experience building this type of project."
After renewables, gas with carbon capture and storage (CCS) and large-scale nuclear were the next lowest cost options.
As neither is currently deployed for electricity generation in Australia, they could be subject to longer lead times and first-of-a-kind premiums.
Small modular nuclear reactors (SMRs) remain the highest cost option, even with new data from Canada's Darlington project.
This represented the first commercial-scale benchmark from a western country and fell within the range previously projected by GenCost.
Climate Change and Energy Chris Bowen said the GenCost report supported the government's net-zero policy.
"Australia has the best wind and sun to power our future and we're harnessing it to secure the better, fairer energy system our nation deserves," he said.
"The latest GenCost confirms what our energy experts have been saying for a long time: the most affordable path to deliver reliable energy in future is with new renewable generation and storage, firmed by gas and pumped hydro.
This year's report calculated the potential cost advantages of nuclear technology's longer operational life for the first time.
"Our finding is that there are no unique cost advantages arising from nuclear technology's long operational life. Similar cost savings are achievable from shorter lived technologies, even accounting for the fact that shorter lived technologies need to be built twice to achieve the same operational life,' the report said.
The CSIRO's director of energy, Dr Dietmar Tourbier, said GenCost is Australia's most comprehensive source of electricity generation cost projections, supporting evidence-based decisions across the sector.
"We refresh forecasts annually using the best available data at the time to ensure GenCost reflects current market conditions and remains a trusted benchmark," he said.
"By drawing on expert input from across the electricity sector, GenCost reinforces CSIRO's role as a neutral source of scientific insight to help guide Australia's energy transition."
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