Solar and wind to lead Australia’s decarbonisation effort
Solar and onshore wind form the basis for the least costly electricity mix for Australia moving towards the 2030 renewables target, according to CSIRO’s new GenCost draft report.CSIRO and Australian Energy Market Operator (AEMO) released their annual GenCost draft report in light of the timely debate surrounding Australia’s energy transition and taxpayer funds.Gas (4%), hydrogen (6%), coal (18%), solar PV (31%) and wind (41%) were projected to be the least-cost large-scale generation mix to achieve the 2030 renewable energies target.Battery technologies continue to show double digit cost reductions with a 15% reduction in FY26. Onshore winds costs are stabilising shown through a 5% drop in cost. Costs of solar rebounded to FY23 increases of 9% after experiencing two years of cost reductions.Contrastingly, nuclear, coal and gas open cycle cost trends have increased due to higher steam and gas turbine energy costs.CSIRO chief energy economist and GenCost project leader Paul Graham comments on the findings.“Electricity systems will always require a diversity of resources to deliver all their functions and so no single technology will meet all the system’s needs regardless of its relative cost position,” he said.The report found the average cost of wholesale electricity would be $91MWh, under the assumption of meeting 82% of the 2030 renewables target, including costs for new transmission lines.To deliver net zero by 2050, generation costs were projected to be $135-$148MWh including transmission or $114-$125MWh for wholesale generation costs alone. The National Energy Market (NEM) volume-weighted generation prices in FY25 were in line with these ranges at around $129MWh.To deliver net zero by 2050, the report found the efficient electricity sector emissions intensity estimated at .02–.05t of carbon dioxide equivalent/MWh.Eliminating all electricity sector emissions (currently estimated at 0.5t of carbon dioxide equivalent/MWh) was reported to be more costly than reducing emissions elsewhere in the economy. If the electricity emissions intensity sat higher than .05 of carbon dioxide equivalent/MWh, it would make achieving net zero more expensive overall.AEMO executive general manager system design Nicola Falcon comments on the report which will be available for public consultation.“CSIRO’s process to regularly monitor, consult on and update generation technology cost trajectories is incredibly valuable in planning for a reliable and least-cost electricity market,” she said.Formal consultation on the Draft 2025-26 Report is open from December 23 until February 2.
