CSIRO GenCost: Falling costs of solar and batteries confirm renewables as cheapest option
The CSIRO's annual GenCost report has again confirmed that integrated renewables are the lowest cost option for Australia as it replaces its ageing coal fleet.
The draft report finds prices of both solar PV and battery storage have fallen again, and are now lower than they were before the global price spikes caused by Russia's invasion of Ukraine.
Battery storage has shown the most dramatic cost reductions – down 20% in the last 12 months alone – while solar has fallen another 8%.
Wind prices continue to rise, but the increases have slowed to just 2% in the last 12 months, and CSIRO expects prices to peak soon.
The report found inflationary pressures continue to ease but the impact on each technology’s unique raw material inputs and supply chains remains mixed.
Gas prices were estimated to have risen, but this is because most new gas generators are being made “hydrogen ready”, which has added to costs.
CSIRO chief energy economist Paul Graham says the next cheapest technology to solar and batteries would be unabated coal and gas, but that would be problematic because of their emissions.
Interestingly, the costs of battery storage are coming down so much that the CSIRO is now modelling longer duration batteries, even out to 48 hours.
The other interesting aspect is the increased prominence of solar thermal, and particularly its perceived value in providing both storage and low temperature industrial heat.
But most attention will, of course, go to a technology that few believe can be built in Australia before 2040 – nuclear.
Large scale nuclear is 1.5 to 2.5x the cost of firmed renewables, and small modular reactors are about 4-6x higher.