Post: Wind and solar remain cheapest new build generation

Wind and solar remain cheapest new build generation

Renewable energy, led by wind and solar, has maintained its position as the cheapest new-build electricity generation source in Australia, despite a 20% average rise in technology costs, according to the latest GenCost report.

Published on 18 July, the report, which is an annual collaboration between the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Australian Energy Market Operator (AEMO), analyses electricity generation and storage, as well as hydrogen production costs.

It notes that while the COVID-19 pandemic has resulted in lingering global supply chain constraints, which have impacted the prices of raw materials required in technology manufacturing, as well as freight costs . The Ukraine war has also exacerbated global supply chain inflationary pressures by raising energy input costs for all industries. But, despite these challenges, modelling projects that technology cost pressures felt in Australia will revert to normal levels by 2027 but are delayed to 2030 in global scenarios where the speed of the energy transition is highest.

The report found:

• Technology cost rises were not uniform due to variations in material inputs and exposure to freight prices
• Globally, renewables led by wind and solar are the fastest-growing energy source
• Batteries are set to play a crucial role in supporting both variable renewable generation in the electricity sector and the rapid expansion of electric vehicle deployment in transport

The report highlights industry concerns that the rapid pace of the global energy transition will contribute to escalating cost pressures, attributed to the immense scale of manufacturing, raw materials, and labour required to develop and deploy clean energy technologies consistent with net-zero goals.

Despite these challenges, the report confirms that wind and solar remain the cheapest new-build electricity generation sources in Australia. The report also confirms that solar PV has been the fastest-growing renewable technology in 2022, surpassing wind for the first time in history.