Groundbreaking analysis from Australia's national science agency, the CSIRO, has delivered a powerful counter-argument to claims that transitioning to renewable energy will force electricity bills to skyrocket. For the first time, the agency has modelled the system-wide cost of electricity generation from various technology mixes, rather than comparing individual sources in isolation.
Cheaper Power with a Renewable Majority
The central finding is striking. The CSIRO's GenCost report concludes that a grid powered by 82% renewable energy – matching the Australian government's 2030 target – would result in wholesale electricity costs of approximately $91 per megawatt hour (MWh). This figure includes the necessary costs of connecting new renewable projects to the network.
This projected cost is substantially lower than the current average wholesale price of $129 per MWh, suggesting a potential cost reduction of around one-third. The report notes that the real cost of renewable generation is likely to be even more favourable, as the modelling used a conservative baseline from the most expensive year for solar and wind power between 2011 and 2023.
Scenarios for 2050 and the Role of Gas
The modelling extends to 2050, presenting a range of futures. It suggests that the country's main electricity market could operate almost entirely on renewables by mid-century without increasing generation costs. However, the report indicates that a completely emissions-free grid may not be the most economically efficient path to net zero.
Instead, the analysis proposes that using fossil gas for grid back-up, rather than more expensive green hydrogen, would be a cheaper option. To achieve economy-wide net zero, it would be more efficient to allow minimal emissions from the electricity sector and offset them with carbon capture elsewhere.
The cheapest overall scenario, according to the report, would involve using only mature technologies like coal, gas, solar, and onshore wind, with no new decarbonisation efforts post-2030. In all cases, incorporating more expensive technologies like offshore wind, nuclear, or fossil fuels with carbon capture and storage increased wholesale costs.
Shifting Technology Costs and Political Debate
The report also tracks the changing costs of key technologies. It found the most significant price drop was in batteries, which fell 15% in the last year, following a 20% decrease the year before. Conversely, costs for coal and open-cycle gas generation rose due to increasing turbine manufacturing expenses.
These findings directly challenge political arguments, particularly from Australia's Coalition opposition, that adding solar, wind, and storage to the grid causes price surges. The CSIRO evidence suggests the opposite trajectory for system costs with high renewable penetration. The debate continues as many experts warn the 82% by 2030 target is likely to be missed.
For UK readers, this detailed modelling from a leading scientific body provides a crucial, evidence-based perspective on the long-term economic viability of renewable energy transitions, relevant to global energy policy discussions.
