Australia’s national science agency the Commonwealth Scientific and Industrial Research Organisation (CSIRO) has once again found that a mix of firmed renewables is the cheapest option to meet Australia’s future power needs.
The agency’s draft GenCost 2025-2026 report found that the combination of solar PV, onshore wind, storage and either natural gas or hydrogen was the least cost technology mix.
The draft report, which was compiled with the Australian Energy Market Operator (AEMO), provides cost data of new-build electricity generation in terms of capital costs and comparative costs.
The 2025 edition of the report examines the average cost of electricity for achieving Australia’s 82 per cent renewable energy target by 2030 and reaching net zero emissions by 2050.
The average cost of electricity in the National Energy Market (NEM), consistent with meeting the 82 per cent renewables target, is estimated to be AU$91 per megawatt-hour (MWh), including transmission, or AU$81MWh for generation alone.
To deliver net zero by 2050, generation costs were projected to be between AU$135 to AU$148MWh, including transmission, or AU$114 to AU$124MWh for wholesale generation costs only.
This is slightly lower than the NEM volume-weighted generation prices of around AU$129MWh in 2024-25.
CSIRO found that battery technologies have shown significant double-digit cost reductions, while large-scale solar has risen for the first time in three years.
Meanwhile, onshore wind costs show signs of stabilising after experiencing the largest increase in 2022-2023, while nuclear, coal and gas open cycle cost trends increase due to higher steam and gas turbine technology costs.
Paul Graham, CSIRO Chief Energy Economist and GenCost Project leader, said: “GenCost has evolved from delivering verifiable cost data on individual technologies to now also providing system modelling of the future generation mix and average cost of wholesale electricity.
“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.”
