2025–26 GenCost report released for public consultation

Together with the Australian Energy Market Operator (AEMO), CSIRO has released the draft GenCost 2025-26 Report for public consultation.

Released annually since 2018, these reports provide the cost of new-build electricity generation in terms of capital costs, as well as comparing the cost of delivered electricity from individual technologies.

In both cases, and consistent with previous report findings, solar PV and onshore wind form the basis for the least-cost generation mix.

“Under any scenario, there is a cost associated with the build of Australia’s future electricity system and GenCost plays a vital role in producing and sharing trusted, evidence-based information with stakeholders to help understand that cost,” said Dr Dietmar Tourbier, CSIRO Director of Energy.

“Through updating and publishing its data, its modelling and its cost projections every year, GenCost reflects the best available data in the most transparent way to help guide the electricity component of Australia’s energy transition journey.”

The most recent report has introduced a new method that calculates the mix of electricity sources and average cost of electricity needed to achieve Australia’s 82% renewable energy target by 2030 and net zero emissions by 2050, under different electricity emission intensity scenarios.

Unlike the previous, levelised cost of electricity (LCOE) metric, which compared costs of individual technologies, the new ‘system levelised cost of electricity’ (SLCOE) method estimates a mix of electricity generation sources and their costs. CSIRO has also developed a new Simple Electricity Model (SEM) to apply it.

The SEM is designed to give industry users such as data scientists, engineers and academics more efficient and greater access to the electricity system modelling tools and data sets used to derive GenCost’s conclusions.

“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,” said Paul Graham, CSIRO Chief Energy Economist and GenCost Project leader.

“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.”

Key findings from the draft report are as follows:

• Capital cost trends: Battery technologies continue to show significant double-digit cost reductions; large-scale solar has had its first cost rise in three years; onshore wind costs show tentative signs of stabilising; and nuclear, coal and gas open-cycle cost trends increase due to higher steam and gas turbine technology costs.
   
• 2030 generation costs: To meet Australia’s target of 82% renewable energy by 2030, the electricity cost is estimated to be about $91 per MWh when transmission is included, or $81/MWh for generation alone.
   
• 2050 generation costs: To deliver net zero by 2050, generation costs were projected to be $135–$148/MWh including transmission, or $114–$124/MWh for wholesale generation costs only. This is slightly lower than the National Energy Market (NEM) volume-weighted generation prices of around $129/MWh in 2024–25.
   
• Electricity sector emissions: To deliver net zero by 2050, the efficient electricity sector emissions intensity is estimated at 0.02–0.05 tCO₂e/MWh, compared to the current level of about 0.5 tCO₂e/MWh. The report found eliminating all electricity sector emissions would be costlier than reducing emissions elsewhere in the economy. However, if electricity emissions intensity was higher than 0.05 tCO₂e/MWh, it would make achieving net zero more expensive overall.
   

Stakeholders are invited to review the consultation draft and provide feedback. For details on how to participate, visit the AEMO consultation website.

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