Claims by the Coalition and One Nation that abandoning a net zero climate target would bring down power prices are contradicted in a new CSIRO report on the costs of generating electricity.
Generation costs will probably rise after 2030 regardless of Australia’s policy on net zero, according to the CSIRO’s annual GenCost report, but prices should then stabilise at levels below recent price spikes.
The report concludes electricity from nuclear plants, which the Coalition and One Nation promote, would be the most expensive way to generate electricity among the current options.
A boom in power-hungry datacentres in the United States was driving up the costs of gas turbines, the report said, while batteries were replacing the role of gas in providing electricity during evening peaks in Australia.
GenCost is CSIRO’s annual release of the comparative costs of electricity generation technologies and how they could change in the coming years and decades.
Electricity prices and energy policy remain politically contentious, with the Coalition abandoning a target of reaching net zero greenhouse gas emissions by 2050.
One Nation, which is polling close to Labor and above the Coalition, rejects climate change science and would abandon the Paris agreement and any net zero targets.
Paul Graham, CSIRO chief energy economist and the report’s lead author, said: “If we abandon net zero, that does not open up some low-cost pathway [for electricity].
“As coal retires, you have to replace it. If that new thing is coal, we still have the same costs [of electricity generation] as we are expecting if we replace it with renewables.”
He said if coal plant closures were delayed or new coal plants built, this would mean an increase in greenhouse gas emissions in the electricity sector.
“If you do want to reach net zero then you have to do that abatement somewhere else,” he said.
“The analysis shows the cost of abatement is lower in the electricity sector than the rest of the economy.”
The wholesale price of electricity only accounts for about 33% of a retail electricity bill. Transmitting electricity through high voltage power lines and towers makes up 7%, with 34% from the local distribution through poles and wires. Costs of metering, retail charges and government programs make up the rest.
Wholesale prices across the National Electricity Market – covering all regions except WA and NT – peaked at $189 per megawatt hour in 2022 but dropped to $104 in 2025, the report said.
Graham said analysis of electricity contracts agreed between generators and customers suggested prices would probably stay below $100 per MWh for the coming years but, as coal plants retired and new generation was built, this would see wholesale prices rise.
Prices by 2050 would depend on the amount of renewables in the system, the cost of fuels and climate policy choices, but in all cases the wholesale electricity costs were likely above $120 per MWh. The highest costs were in scenarios that included nuclear power.
“We consistently find that nuclear is the most expensive option for electricity generation in Australia,” he said.
“Even when we base our costs on South Korea’s very efficient deployment of nuclear, we still can’t see that it can be competitive relative to the other options that we have.
“We have been tracking electricity costs for eight years and the market still surprises us,” he said.
“We are still delivering cost reductions in solar and batteries when the world is really unstable. It has made Australia far more resilient than a lot of people appreciate.”
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: theguardian.com
