CSIRO delivers the energy reality check: renewables still cheapest, nuclear SMRs most expensive

Australia's energy technologies have received their annual report card, and renewables are still the class champions whilst nuclear small modular reactors remain firmly planted at the bottom of the cost league table, according to CSIRO's latest GenCost report released on Tuesday.

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The comprehensive study found wind and solar backed by storage and transmission continue to dominate as the cheapest new electricity generation technologies. Meanwhile, nuclear small modular reactors maintain their dubious honour as the most expensive option, even with fresh data from Canada's Darlington project.

Gas with carbon capture and storage plus large-scale nuclear occupy the middle ground, though neither technology currently operates for electricity generation in Australia, potentially adding delays and premium costs for early adopters.

CSIRO's Director of Energy Dr Dietmar Tourbier said the report provides Australia's most comprehensive electricity generation cost projections. “GenCost delivers transparent, independent cost estimates that feed directly into electricity system modelling and investment planning,” Tourbier said on Tuesday.

The report revealed a sobering trend with cost projections for most technologies revised upwards, despite continued price drops for solar panels and batteries. Chief culprits include sustained increases in Australian construction costs, new work camp expenses for wind projects, and potential supply shortages for gas turbines.

Chief Energy Economist Paul Graham said fewer submissions were received during consultation compared to previous years, but reflected broader industry perspectives. “Most input we received focused on technologies already in development or under construction, such as pumped hydro, wind, solar photovoltaics, gas, solar thermal and electrolysers,” Graham said.

The Australian Energy Market Operator will use the cost data in its upcoming Draft Integrated System Plan in December. The report emphasises that whilst some technologies outperform others on cost, electricity systems require a technology mix to ensure reliability and flexibility.

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