Australia tips solar as its cheapest electricity source by 2040

A comprehensive new study has been published by Australia’s new Bureau of Resources and Energy Economics (BREE), providing “the best available and most up-to-date cost estimates” for 40 utility-scale electricity generation technologies between now and 2050, albeit under Australian conditions.

The Australian Energy Technology Assessment (AETA), evaluated the gamut of technologies from conventional sub-critical pulverized coal plants and combined-cycle gas turbine (CCGT) plants through to developmental wave and ocean-powered generation technologies. Being mainly a flat and dry country, hydoelectric plants are not part of the Australian equation.

Based on a raft of assumptions, including carbon emission pricing, it endeavors to come up with levelized cost of electricity (LCOE) for each technology at 2012, 2020, 2030, 2040 and 2050.

“Australia will experience an energy transformation over the coming decades that will have a profound impact on electricity networks, how energy is distributed and on Australia’s ability to meet its targeted greenhouse gas emissions reductions,” said BREE’s executive director Quentin Grafton in his forward to the report.

From a renewable energy investment perspective, it would appear you can’t go wrong with landfill gas and biomass plants (particularly those using sugar cane waste), which have amongst the lowest LCOEs, from now to 2050, as does nuclear power. The caveat for the latter, however, is that the cost of decommissioning and waste disposal is not included in the calculations.

Onshore wind, already estimated to have the fifth lowest LCOE, is projected to become Australia’s cheapest source of power by 2020 and still the second cheapest, behind non-tracking solar voltaic technology, by 2050.

In the fossil fuel sector, CCGT plants, latterly retrofitted with carbon capture and storage technology, fare quite well although the cost of fuel gradually pushes their LCOE higher.

The BREE plans to update the AETA every two years.