Electricity generated by solar power and wind on shore are the cheapest in Australia, even after factoring in the significant expense of integrating them into the power grid, according to new analysis from the CSIRO.
Estimates of costs to build small modular nuclear reactors — a technology supported by the coalition but not expected to be commercially available until at least 2030 — have risen dramatically and would provide the most expensive power, according to draft GenCost- report.
Australia’s electricity grids were designed for large coal-fired power stations, but these outdated plants is closed because renewable power is cheaper and Australia cannot meet its climate goals by continuing to rely on coal.
Replacing coal with renewables would spread more sources of generation across the country — creating a distributed energy system — requiring expensive transmission lines and other technologies, including storage, to keep the grid reliable while keeping costs down.
CSIRO’s previous GenCost report was attacked by some critics this year for not including these integration costs up to the year 2030, by which time billions of dollars would have been spent on storage and transmission projects to integrate renewable energy not costed in the report is not.
While experts said renewable energy remains the lowest-cost technology which will enable Australia to meet its climate goals, the lead author of the new GenCost report, CSIRO energy economist Paul Graham, said the agency had listened to its critics.
“We took that feedback on board and included those pre-2030 costs, but we found that the story doesn’t change that much. Variable renewables still have the lowest cost range.”
The latest GenCost report, which went out to industry for consultation today, shows that a theoretical small modular nuclear reactor in 2030 had the second highest cost range of all available technologies. The most expensive would be power from a peak plant runs on hydrogen.
The Albanian government has a target to generate 82% of electricity from renewable energy by 2030 and extended a taxpayer scheme last month to underwrite projects after concerns that progress was too slow.
Costs to build the largely theoretical small modular nuclear reactors have risen since the last GenCost report, according to new figures from the most advanced US project.
That Utah-based project, which was scheduled to generate electricity in 2029, was canceled earlier this year due to a lack of customers for the power it would generate.
Graham said despite the cancellation, the Utah-based project, run by NuScale, provided some of the first real data of actual costs of a nuclear SMR.
“It’s better quality data because it’s from a real project, but for now we can only conclude that it’s the highest cost option to reduce emissions.”
The GenCost report also updates the capital costs of different technologies due to inflation.
Graham said the report showed that inflationary pressures had eased from the previous year, but that pressures on gas, wind and nuclear SMR costs remained.