Cost of electricity generation in Australia grid powered by 82% renewable energy This would be a third cheaper than current wholesale electricity prices, according to new CSIRO analysis.
For the first time, the organization has modeled the likely cost of generating electricity from different technology combinations that could make up Australia's power grid in 2030 and 2050. Previous work only looked at the comparative costs of individual technologies.
Modeling suggests that by 2050, the country's primary electricity market, covering all states and territories except the Northern Territory and Western Australia, could be powered almost entirely by renewables without any increase in the cost of power generation.
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The results refute the Coalition's claims that adding solar, wind and storage such as batteries into Australia's power grid will cause electricity prices to soar.
The Albana government has set a target for 82% of electricity generation to come from renewables by 2030, but many experts warn that the goal will likely be missed.
KSIRO The GenCost report shows that a grid with this level of renewable energy would result in wholesale electricity costs of $91 per megawatt-hour, including the additional costs of connecting renewables in 2030. This compares to the current average cost of $129 per MWh, the report said.
The actual cost of generation from renewable sources is likely to be lower as CSIRO based the most expensive year for solar and wind power between 2011 and 2023.
Wholesale electricity costs account for about a third of domestic bills.
Another third comes from the costs of distributing power through local poles and wires, and the rest consists of transmission costs, retail costs and government programs.
The price of electricity has been the dominant political issue this year, with the Coalition blaming the influx of renewable energy for a 40 per cent rise in electricity bills.
Energy bills jumped 37.5% in the 12 months to October, mainly because federal and state government rebates ended, according to the Australian Bureau of Statistics. Excluding these rebate changes, electricity prices rose 5% last year. ABC said.
CSIRO has modeled a range of scenarios to estimate the cost of electricity in 2050, from a future in which there are no further system-wide emissions cuts after 2030 to a grid that is completely emissions-free.
The GenCost report says it is “not cost effective” to have a completely emissions-free grid.
Instead, the report suggests using fossil gas rather than green hydrogen to provide backup power to the grid.
If Australia were aiming to achieve net-zero emissions economy-wide, it would be more efficient, the report says, to allow small amounts of gas emissions into the electricity system and then capture CO2 in other parts of the economy.
The cheapest option for electricity generation would be to use only mature technologies – coal, gas, solar and onshore wind – and no further efforts to reduce emissions in the electricity market after 2030, the report said.
In all scenarios, the addition of offshore wind, fossil fuel generation with carbon capture and storage, and nuclear power increased the cost of wholesale electricity.
Elsewhere, the report looks at cost changes across different technologies and finds that the biggest change was in battery prices, which fell 15% year-on-year after falling 20% the year before.
The largest cost increases were observed in open-cycle coal and gas production due to rising turbine production costs. Large-scale solar costs rose slightly, while onshore wind costs showed “tentative signs of stabilization.”
