The GenCost report also makes some other key observations: cost reductions in widely promoted technologies, such as carbon capture and storage (CCS), small modular nuclear reactors (SMRs), solar thermal power, and l Ocean energy is lagging behind and would require a stronger investment to realize its full potential.
And, despite intense pressure from the nuclear lobby and many of the mainstream media (News Ltd, Nine / Fairfax and others), the CSIRO says the status of the nuclear SMR has not changed and that it sees no prospect of projects. in Australia this decade, given the commercial immaturity and high cost of technology.
Worse, the GenCost report says the best chance of nuclear deployment worldwide is only if the world doesn’t take climate change seriously.
If the world wants to achieve the Paris goals of limiting average global warming to 1.5 ° C, then other technologies will rule because they are cheaper and faster to deploy and the share of nuclear generation will decrease significantly. (See table below).
It is important to keep this in mind, because the 30-year plan for the Australian energy market operator known as the Integrated System Plan represents a share of renewables of around 80% by 2030, as does the newly elected Labor federal government. . All brown coal generators are expected to close by 2032.
CSIRO’s observation that hydrogen electrolyzers are experiencing a “rapid” drop in costs and could accelerate the uptake of green hydrogen will also encourage many to believe that the likely baseline scenario for AEMO’s ISP is it will soon become the scene of the “hydrogen superpower.”
This scenario of hydrogen superpower means an even faster shift to renewable energy: at the top 90% in a decade, and no coal generator in the fleet of any kind.
Another important new aspect of this GenCost report is the abandonment of the “diverse technologies” scenario. This echoes AEMO’s decision to dump the “gas-driven recovery” advocated by the previous coalition government, mainly because virtually no one thought it was plausible or took it seriously.
“Stakeholder feedback received during the development process of AEMO’s Australian 2020-21 scenario found that alternative technologies were unlikely to be able to compete significantly with renewables,” the report notes.
“This reflects relatively uncompetitive gas prices, a lack of confidence in the future cost competitiveness of CCS technologies and abundant low-cost renewable resources.
“Some of these concerns about a diverse technology scenario are specific to Australia’s circumstances. However, there are countries with similar energy resource profiles where the Diverse technology scenario also lacks plausibility. This scenario has been removed.” .
However, CSIRO notes that wind and solar cost reductions are likely to stop this year due to supply restrictions and higher material costs, but CSIRO says this is difficult to quantify (all and that BNEF has recently noted increases of 7). percent to 14 percent in average capital costs).
“We don’t have a lot of good evidence for projects to be built next year,” Paul Graham of CSIRO, lead author, told RenewEconomy. “It will have to affect projects eventually, so no further declines in real terms would be expected next time. It’s that we don’t know how much. It could be in line with inflation.”
However, next time cost increases for gas and coal could be considerable, mainly due to the sharp rise in commodity prices that have already reached wholesale electricity prices in Australia.
This is where the CSIRO estimates get interesting. It puts the cost of a renewable energy-based network at as low as $ 70 / MWh, including storage and transmission. Even in Western Australia, with an isolated network with limited transmission options, the increase is only marginal, to as high as $ 70 / MWh.
Compare this with the current prices of the still fossil fuel-dominated Australian grid, driven by rising coal and gas prices. Prices have averaged more than $ 500 / MWh on the country’s most dependent fossil fuel network, Queensland, so far in July.
As the CSIRO points out, reducing emissions goes hand in hand with reducing costs for consumers. It’s amazing that the interests created and the lazy media continue to do the opposite.
CSIRO also notes the fall in offshore wind costs, further bolstered by the historic UK auction last week, which will encourage those looking to develop more than 20 GW of offshore wind projects on the south coast of Australia, and Victoria and NSW in particular. .
“Both onshore and offshore wind costs have fallen faster than expected,” the report says.
“Changes in onshore wind costs reflect Australian projects. Offshore wind has not yet been developed in Australia, however, cost reductions achieved abroad make Australian projects have a lower cost than which was previously expected “.
Graham says offshore wind costs were expected to be even lower, but says it’s clear that offshore wind is the “cheapest technology after wind (onshore) and solar.”