Experts agree on cheap power
AEMO and CSIRO say wind and solar are clearly the cheapest new form of electricity generation.
The Australian Energy Market Operator has joined with scientists at CSIRO to create the inaugural GenCost report.
The study found that if variable renewables are backed up with just a few hours of battery or pumped hydro storage, renewable generators can already undercut their competitors.
Looking ahead to 2050, the models show the gap widening further with the cost of solar predicted to fall dramatically.
The new study was developed through a collaboration between AEMO and CSIRO and will be updated annually to reflect the changing costs of technology.
As well as finding that solar and wind provide the lowest levelised cost of electricity (LCOE), the report foreshadows the growing need for storage as the supply of energy from variable renewables increases ‘towards or beyond’ 50 per cent.
The study draws on earlier work by ARENA into the levelised cost of different generation technologies.
GenCost 2018 also predicts that the electricity sector will draw more deeply on demand response to maintain the stability of the system and reduce costs.
The projections show that the cost of solar PV is continuing to fall faster than other technologies, which the authors expect will make solar one of the largest contributors to electricity generation by 2050.