I am much less optimistic than CSIRO when it comes to storage.  We need vast quantities of storage capacity to support anything like 60-90% renewable energy in the National Electricity Market (NEM) at the reliability level that we need. 

Today, we don't really know what storage technology will emerge.  Pumped hydro exists, but we are discovering that it is actually expensive and long to build.  Lithium-ion batteries are the dominant technology because there are large factories that build battery packs for EVs; it is not clear that it is the best technology for large scale storage. Figure 6.2 in the report makes little sense: the bulk of the cost in a renewable-only NEM is storage. not generation, which Figure 5.15 suggests costs in excess of $500/kWh in 2030 and about $600 today.

So here is an exercise: the NEM is 43 GW of dispatchable capacity.  Take 60% variable renewable energy (VRE) penetration, supported by storage.  You need 25.8 GW of VRE cum storage available 24h per day.  Say you want 12 hours of storage, from 6pm to 6am, and hope the VRE capacity can supply the rest of the time.  You need 310 GWh of storage capacity, at a cost of $500,000 per MWh if using batteries, so an investment of $155 Bn (using optimistic 2030 cost estimates).  Most people agree that batteries may last about 10 years.  Putting it together, 310 GWh x365 day x 10 years: 1,131,500 GWh of energy over the lifetime of the investment.  Divide $155 Bn by this number and you get approximately 137,000/GWh or 137/MWh.  This is storage alone, with no redundancies of any kind.

I think the report misses the point, which is two-fold.  First, we need a staggering amount of money to be invested in storage to have a chance at the transition.  There is no transition without storage.  Take last Saturday in Sydney: no sun and no wind.  So who is going to invest these billions?  Second, the only two technologies currently available are either very expensive, or cannot be deployed (or both): how many sites in Australia can really accommodate a project like Snowy 2.0, irrespective of costs?"

The latest CSIRO findings are not surprising. We need to face up to the climate change threats facing our civilisation now not in the next decades. With the cost of renewables and storage continuing to decline and time for action to slow down climate change not on our side, we have no choice but to go full throttle on renewables and storage. The CSIRO findings demonstrate once again that renewables offer the best economic solution for Australia over nuclear by a factor of two. Renewable are also the best solution on technical, social and environmental grounds. Australia needs to act now to do our share if we are serious about limiting global climate change to below 3 degrees.

This year's Gencost report reaffirms that Renewable energy with firming and storage will form the backbone for Australia's transition to net zero emissions. 

Detailed estimates that the most effective and affordable solution to enabling our transition of the electricity sector will require renewable energy with firming technology. 

It is also very clear that nuclear energy is not competitive as a generation option for Australia. 

As we decommission aging coal fired electricity generation, nuclear is simply not a viable option without dramatically increasing electricity prices for consumers.

The report summary demonstrates how nuclear remains on the horizon while PV and wind continue to shine brightly as key players. It will be interesting to see how interconnectors and smart grids will influence LCOE in the coming years. Rooftop PV is also a significant contributor to the electricity generation mix, especially in SA, with installations growing despite reduced feed-in tariffs. It will be worth tracking how rooftop PV and battery progress in the future with minimal or no feed-in tariffs, given that our feed-in tariffs are already quite small.

Solar panels and wind turbines are now the cheapest ways to produce electricity, thanks to their rapid growth and improvements in technology. Over the last decade, there has been an exponential growth in photovoltaic (PV) deployment in Australia. The levelised cost of electricity (LCOE) of the variable renewables is seen decreasing to the surplus energy generation in Australia – “the location hugely favours PV generation”.  

The remarkable growth has introduced a paradox of abundance: during many periods of the year, these renewable systems produce more electricity than the grid can use. This surplus generation leads to curtailment—a scenario where renewable energy is intentionally reduced to balance supply and demand to maintain grid stability. We have to think ahead to firm the power and invest in storage for load shifting and having a reliable net zero transition.

I'm incredibly proud to be one of the founders of Gencost: we knew at the time that given the furious debate about Australia's energy future, the entire country needed a focal point as to the price of different energy options.

Predicting future prices is hard if not impossible. The best we can do is come up with a 'best guess', make that best guess based on scientific principles, the process for getting that best guess open and fully transparent, and then improve that process based on wide-ranging feedback.

I don't know of a more transparent and open energy pricing process than Gencost: it comes from consultation across Australia's energy industry, a broad search of what’s going on around the world, and anybody has the chance to submit feedback on drafts. I’ve left CSIRO, but knowing the team that does the work, I’m sure these founding principles of science, open and transparent process, and careful consideration of all feedback, remain.

In the difficult choices of our energy transition, we should welcome alternate views and approaches. But it is incumbent on anyone putting these forward to be just as open, transparent, broadly consultative and rigorous.

 In my opinion, the findings of the GenCost 2024-25 report are a clear indication of the transformative role renewables continue to play in Australia's energy transition. The report highlights that large-scale solar photovoltaic (PV) costs have fallen by 8% in consecutive years, while battery costs dropped by 20%, making renewables the lowest-cost new-build electricity technologies, even after factoring the integration costs.

The report also addresses nuclear power, noting its long operational life but highlighting its extended development timelines and integration challenges, which limit its viability for near-term needs. In my opinion, a more immediate and effective solution lies in community microgrids and peer-to-peer (P2P) energy sharing. Community microgrids enable local generation, storage, and trading, reducing reliance on centralized grids, minimizing transmission losses, and empowering communities. Coupled with digitalized grids and self-healing technologies, they create a resilient energy ecosystem that balances renewable supply with growing demands, such as EV charging. These systems play a critical role in reducing the levelised cost of electricity (LCOE) and enhancing grid resilience.

The GenCost report provides vital insights for policymakers and industry leaders, emphasizing the importance of investing in decentralised, adaptive energy systems for a sustainable future.

Size matters when discussing the economics of nuclear and renewable energy generation. A critical issue is the comparison of a technology that needs to be built at large scale and will have large upfront construction costs with a technology that is modular and can be built at different sizes. For example, in the case of roof-top solar, individual households get to choose the size of their system.
 
For nuclear to achieve the lowest levelized cost of electricity, it needs to be built big and operate all the time and for a long time. Yet, the bigger it gets; the more upfront cost needs to be paid. And if it isn’t used as often or as long as expected, then it gets more costly. The true cost of nuclear will be revealed over a long time and is subject to construction costs, plus there’s also the issue of operational, fuel, and waste costs, which will be higher for nuclear.
 
There will be fewer opportunities for inflexible large scale generation assets in the future as our grid is changing. We will need more assets with variable or flexible generation profiles to balance out intermittent renewables, including roof-top solar. Those days with high demand but low renewable generation are likely to be infrequent. The requirements of the grid of the future are likely to be incompatible with generation assets that need to operate all the time.
 
The roll out of roof-top solar also impacts the economic feasibility of nuclear. People comparing nuclear and renewable energy generation options are also evaluating whether we allow many people to produce electricity, via roof-top solar, or whether we revert to centralised electricity generation amongst fewer assets.

Future Projections for levelised cost of electricity (LCOE) of Onshore Wind are likely to be too low:

The GenCost 2024-25 report's projected LCOE for wind energy in 2030 and 2040 (Apx Table B.10) may be significantly underestimated due to recent trends in capital costs. Over the last three years, the capital cost of wind projects has risen by nearly 50% driven by supply chain constraints, rising material costs, labour costs, and inflationary pressures. The report appears to rely on outdated assumptions, ignoring these recent developments. If these trends persist, the capital cost of wind energy will remain elevated, leading to higher-than-anticipated costs for project deployment for new wind farms. Furthermore, new wind farms might have to be invested at locations with less favourable wind conditions, yielding lower output than existing farms.

LCOE of Variable with integration costs are likely to be underestimated:

The GenCost 2024-25 report likely underestimates the true cost of Variable with integration cost (Apx Table B.10). Key challenges arise from the lack of adequate storage infrastructure, while levelised cost of storage (LCOS) seem to be significantly underestimated in the report. Large-scale storage is essential for balancing supply and demand during periods of low renewable generation, yet existing storage capacity falls significantly short of requirements. These underestimations could distort policy and investment decisions by failing to account for the full economic burden of ensuring system reliability and stability in a high-renewables grid.

This annual CSIRO/AEMO Gencost report on the cost of electricity generation has just been updated for 2024.  What is different?  There have been refinements showing pronounced decreases in the cost of solar and especially of batteries, small increases in the cost of wind and coal, and a pronounced increase in the cost of gas generation. \

Particular attention has been paid to the cost of nuclear, in part following a workshop that I helped convene on behalf of the Academy of Technological Sciences and Engineering and the Australian Academy of Science to provide input to the Gencost team.  The report subsequently looked at the effect of the longer expected lifetime for nuclear plants (up to 60 years), and the potential annual operating time (capacity factor).  The former made very little difference to the relative costs, and the latter will be determined by market competition with cheaper solar and wind, large amounts of which will be installed in Australia in the coming decades.

Solar and wind remain the cheapest form of electricity generation, even when taking into account the additional cost of firming with storage, and the additional transmission costs. 

This cost advantage over nuclear is projected to widen over the coming decades – especially by the earliest date that nuclear could foreseeably be expected to operate in Australia in the late 2030s, given the projected lead time of around 15 years.

The future is uncertain and technology is changing quickly in ways that no one can predict for certain. But CSIRO had made a helpful contribution in what appears to be an honest and open update to its previous studies.

In addition to the capital cost and the operating cost, these options have a cost associated with decision making and obtaining social and political support. These costs significantly impact the project initiation and approval stages, and continue to be a major part of the decision on the operation and decommissioning of the options. There is a need to ensure decisions for selection of the options are made considering the social and technical systems and their interaction, that is, how communities, organisations and businesses are interacting with their infrastructure systems.

The latest CSIRO report confirms the recent trend of continually reducing costs of solar panels and battery storage, showing solar energy with enough storage to be firm capacity is the least expensive new generation option. 
 
The increasing cost of gas-fired power as a backup reinforces the need to invest urgently in more storage to increase the use of renewables.
 
The study shows nuclear power would be much more expensive, even after making three assumptions that are extremely generous:

1.  construction time is assumed to be up to eight years, but no recent project in the Western world has achieved that target. Even the UAE’s most recent reactor took more than nine years, while projects in Western Europe have taken much longer.
2. The optimistic lifetime of 60 years is assumed, even though no nuclear power station has ever continued to perform for that long, so the costs of extending the operating life that far are not known.
3. The capacity factor, the percentage of time that the power station would be operating, looks very optimistic in the light of continuing expansion of cheaper solar and wind.

Overall, the study confirms the view of the electricity industry that solar and wind with storage are much cheaper than any nuclear power station would generate, even with extremely generous assumptions about the costs and operating life of nuclear reactors. The world investment figures for new capacity reflect that conclusion, with literally about a hundred times as much new renewables investment as new nuclear power this year.