The Commonwealth Scientific and Industrial Research Organisation (CSIRO) has released its third report on energy generation and storage costs. The report, which was published in collaboration with the Australian Energy Market Operator (AEMO), named solar and wind as the most cost efficient resources even with integration costs.
In addition, battery costs were found to have fallen the most in 2020-2021 when compared to any other generation and storage technologies – a downward trend that is expected to continue.
Integration costs have previously proven a source of contention over the viability of renewable uptake, both in terms of transmission and storage infrastructure. As wind and solar are weather dependent, the cost of storing them on overcast or still days has been a factor working against them. However, with the new report showcasing battery solutions’ declining costs, these fears are proven to be unfounded.
“Solar photovoltaics (PV) and wind continue to be the cheapest new sources of electricity for any expected share of renewables in the grid — anywhere from 50% to 100%” CSIRO Chief Energy Economist Paul Graham said. “This is projected to continue to be the case throughout the projection period to 2050.”
He added that an earlier draft of the report was updated to include feedback on the impacts of weather variability bumping up integration costs.
“The final report addresses this feedback: our analysis of renewable integration costs now includes greater recognition of this year to year weather variability and the impact it has on electricity demand and supply,” Graham says.
The report also found hydrogen electrolysers will continue to experience cost reductions, making it cost-competitive with hydrogen, while hydroelectric power was identified as another strong contender to watch. Given the fact that the Australian Government spent $10.3 billion in fossil fuel subsidies between 2020-2021, heeding the findings and shifting to a cleaner future could see some big savings for the country.
Other clean technologies such as carbon capture and storage, nuclear small modular reactors and ocean energy were identified as needing higher levels of global investment to be considered viable alternatives.