Renewables backed by storage and transmission remain the lowest-cost new-build electricity generation technologies in Australia.
The 2024–25 GenCost report was released by CSIRO and AEMO this week.
Now in its seventh year, GenCost is Australia’s most comprehensive projection of electricity generation costs, incorporating detailed capital cost estimates, technology forecasts, and stakeholder consultation to support evidence-based energy planning.
This year’s report revised up the projected capital costs of most technologies, citing sustained construction cost inflation, higher capital financing rates, and new inclusions such as work camp costs for wind developments.
Notably, capital costs for gas turbines rose due to the standard inclusion of hydrogen readiness, while large-scale batteries recorded the largest cost drop, falling 20 per cent.
Solar PV costs fell by 8 per cent for the second consecutive year, while onshore wind costs continued to rise, albeit more slowly.
Despite these pressures, large-scale solar PV and onshore wind – with integration costs for storage, transmission and firming included – continue to offer the lowest levelised cost of electricity (LCOE) across all new-build technologies in both 2024 and 2030.
These costs sit well below those for coal, gas and nuclear options, assuming alignment with Australia’s net zero by 2050 trajectory.
The report shows that nuclear small modular reactors (SMRs) remain the most expensive.
Gas with carbon capture and storage (CCS), solar thermal, and large-scale nuclear are the next most competitive low-emission technologies, although none are yet operational in Australia.
Nuclear SMRs, even incorporating new benchmark data from Canada’s Darlington project, remain the highest-cost option and are not expected to be operational until the 2040s.
The report also includes new analysis addressing public critiques of GenCost’s treatment of nuclear.
It confirms no unique cost advantages from nuclear’s long operational life, due to refurbishment needs and the lack of ongoing cost declines.
Capacity factors for nuclear were modelled using a 53 to 89 per cent range, based on Australian baseload experience and global averages, rejecting a fixed 93 per cent figure used in US-based estimates.
Lead times for first-time nuclear deployment in Australia remain at a minimum of 15 years, with CSIRO noting that faster construction timelines in countries like the UAE are unlikely to be replicated in Australia’s democratic regulatory environment.
“GenCost delivers transparent, independent cost estimates that feed directly into electricity system modelling and investment planning,” said CSIRO Director of Energy Dr Dietmar Tourbier.
AEMO confirmed it will use GenCost’s capital assumptions in its upcoming Draft Integrated System Plan.