The Commonwealth Scientific and Industrial Research Organisation (CSIRO) of Australia has issued a report on calculated integration costs of new-build power in the country, which concludes that wind and solar are the cheapest sources.
In their latest GenCost report, CSIRO and the Australian Energy Market Operator used a more accurate system for calculating the levelised cost of energy. Paul Graham, Chief Energy Economist with CSIRO, said: “Previous GenCost reports added arbitrary amounts of storage costs, but this year we used a model of the electricity system that optimises the amount of storage needed, and also includes additional transmission expenditure. Even taking into account these extra system integration costs, solar PV and wind continue to be the cheapest new sources of electricity for any expected share of renewables in the grid, anywhere for 50 per cent to 100 per cent. This is projected to continue to be the case throughout the projection period to 2050.”
The report found that solar PV and batteries are projected to continue experiencing the fastest cost reductions of any source of energy technology, while electrolysers are projected to experience substantial cost reductions that will make them competitive with natural gas.
In addition, the report said that while the relative maturity of wind power means that its capital costs are falling more slowly than solar, it continues to make efficiency gains that see the technology capture more energy from the same wind resources.