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CSIRO releases 2023-24 Gencost report on future cost of energy capabilities

The 2023-24 annual GenCost report on the cost of building future electricity generation, storage and hydrogen production in Australia has been released.

GenCost is an economic report by CSIRO, Australia’s national science agency, in collaboration with the Australian Energy Market Operator (AEMO).

The latest report included a range of changes in response to the highest volume of feedback since its inception in 2018, including the inclusion of large-scale nuclear for the first time.

This decision was prompted by increased stakeholder interest in nuclear following updated costings for small modular reactors (SMRs) in the 2023-24 consultation draft.

GenCost found that, while generation units of that scale are unprecedented in Australia, there are no known technical barriers to large-scale nuclear power generation.

It also determined that nuclear power was more expensive than renewables and would take at least 15 years to develop, including construction.

Wind power is recovering the slowest from global inflationary pressures and cost projections for both onshore and offshore wind have been revised upwards in the next decade.

Despite this, updated modelling found that renewables, including costs associated with additional storage and transmission, remain the lowest cost, new build technology.

This competitive position reflects the decade of cost reductions experienced by wind, solar photovoltaics (PV) and batteries before the pandemic, while the costs of their more mature competitors have remained flat.

CSIRO’s Director of Energy, Dr Dietmar Tourbier, said GenCost said the latest consultation attracted more than 40 written submissions and more than 200 industry webinar participants.

“The feedback provided by the energy community each year is invaluable, given that cost forecasts of future electricity generation, storage and hydrogen production can fluctuate significantly and no single technology can achieve our transition to net zero,” Dr Tourbier said.

AEMO’s Executive general manager of system design, Ms Merryn York, said that GenCost was one of several key reports that helped inform the continuous design of a sustainable electricity system for Australia.

“The annual collaboration with industry to assess electricity generation costs is critical to strategic planning and policy analysis, including our Integrated System Plan,” Ms York said.

CSIRO’s Chief Energy Economist and GenCost lead author, Paul Graham, welcomed the stakeholder feedback that informed the latest report.

“GenCost is flexible to adjusting assumptions, scope and methodology in response to constructive feedback received during the formal consultation period and throughout the year,” Mr Graham said.

The costs estimated in the report can only be achieved if Australia commits to a continuous nuclear building program, requiring an initial investment in a higher-cost unit.

Similar ‘first-of-a-kind’ costs in Australia also apply to other technologies such as offshore wind, solar thermal and carbon capture and storage (CCS).

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