Global race to net zero pushes up technology prices by 20pc
Solar and wind are still the cheapest form of new-build power generation in Australia, but supply chain issues since the pandemic have pushed up the costs of all power sources, according to a new report.
The GenCost report by the CSIRO and Australian Energy Market Operator, to be released on Tuesday, also revealed that nuclear power was still the most expensive form of generation out to 2050.
Large-scale solar and wind is the cheapest form of new-build power generation.
The report found the capital costs of all technologies had increased by about 20 per cent since 2021-22, ranging from 9 per cent for solar to 35 per cent for onshore wind.
The rising construction costs in the global race to cut carbon emissions will make Australia’s task to reach its ambitious 2030 targets even harder – with some energy experts saying it will be next to impossible – not to mention making electricity more expensive for customers.
CSIRO chief energy economist and GenCost lead author Paul Graham said the pandemic had resulted in lingering global supply chain constraints that impacted the prices of raw materials in technology manufacturing as well as freight costs.
This has been exacerbated by the war in Ukraine. Costs are not expected to return to normal levels until 2027, just three years before Australia is supposed to reach 82 per cent renewable energy.
“During the recovery from these global events, various input costs are showing signs of moderation,” Mr Graham said.
“However, there is an expected delay due to future price uncertainties and the robust demand associated with the global energy transition.”
Mr Graham said analysis by the CSIRO and AEMO showed technology costs had mostly peaked and were unlikely to extend beyond 2030 as
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