Renewable energy generation backed up by storage and additional transmission lines remains the cheapest form of clean energy technology to build and operate across Australia, the latest report indicates.

And any large-scale nuclear energy facilities are not expected to be delivered until at least 2040.

The CSIRO has released the 2023-24 edition of its annual GenCost Report, which was prepared in collaboration with the Australian Energy Market Operator.

The report provides a comparison of the estimated costs which are associated with each of the main types of energy generation technology.

For each type of technology, the report provides an estimate of the levelized cost of electricity (LCOE).

This includes all of the costs which are expected to be incurred during design, construction, operation and maintenance across the anticipated lifespan of generation assets. It includes a profit margin to enable developers to generate an acceptable return on their investment.

For the first time, the report has included large-scale nuclear power plants.

Since Australia does not have any experience with nuclear technology delivery, estimates for large-scale nuclear costs in the report are largely based on the experience with nuclear technology in South Korea.

These costs have been adjusted to provide an estimate in the Australian context by studying the ratio of the costs of new coal generation in both South Korea and Australia.

All up, the report found that renewable energy technology supported by storage and additional transmission to connect renewable assets to the grid remains the cheapest form of energy generation across Australia.

(Note: costs associated with renewables in the CSIRO report include those which are needed to firm intermittent renewable energy sources with battery or pumped hydro storage along with additional transmission which is needed to connect new renewable assets to the electricity grid.)

According to the report, the cheapest form of technology is solar PV and wind supported by firming technologies such as batteries and pumped hydro.

On a per MWh basis, the cost of this technology is estimated at between $100 and $140 in 2023 – a number which is likely to decline to between $89 and $125 by 2030.

This is the case even as costs associated with onshore wind power have been revised upward by 8 percent as wind power has been the slowest technology to recover from global inflationary pressures.

Next cheapest is brown coal and gas – although costs associated with these technologies are estimated to blow out if carbon capture and storage is included (see chart).

Costs for large-scale nuclear amounted to between $155 and $262 per MWh in 2023 – falling to between $141 and $233 per MWh in 2030.

At this level, large-scale nuclear is expected to be more costly compared with renewables but cheaper compared with fossil fuels containing carbon capture and storage.

Meanwhile, costs associated with nuclear which is delivered through small modular reactors continue to be estimated at many times that which is associated with renewables (see chart).

When comparing costs of nuclear and renewables, a key point often made by proponents of nuclear is that nuclear facilities have a longer lifespan compared with renewables.

Whereas the life expectancy for solar farms is estimated at around 25 to 30 years as an industry benchmark, newer nuclear plants are being constructed to last between 40 and 60 years.

However, the report estimated that any development of large-scale nuclear power plants would take at least fifteen years.

This reflects the absence of a current nuclear development pipeline in Australia along with the additional legal, safety and security steps which are required during the design and construction of nuclear assets.

As a result, Australia is unlikely to have any large-scale nuclear power plants in operation before 2040 even if planning for such facilities (including the removal of a current ban on nuclear energy generation) commenced in 2025.

That timeframe means that it is unlikely that large scale nuclear would be able to be delivered in time to replace retiring coal plants.

All up, Commonwealth Government data indicates that coal accounted for almost half (46 percent) of electricity generation in calendar 2023.

However, the Australian Energy Market Operator currently expects all of the nation’s coal plants to cease operation by 2038.

This has led to a push to develop new energy generation and storage assets in order to shore up Australia’s energy supply as existing coal assets shut down.

The latest report comes amid ongoing debate regarding suitable technologies as Australia seeks to transform its energy grid in order to meet climate related objectives.

The current Labor Government is pinning its hopes on renewable energy and wants the penetration of renewable energy generation to go from 39 percent of electricity generation in 2023 to 82 percent by 2030.

By contrast, the Coalition is pinning its hopes on nuclear – although the party is yet to announce details of its policy.

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