Technical report examines generation cost curve

The Federal Government published a technical report commissioned as part of the Energy White Paper in November 2010.

The report reviews a range of expected electricity generation technologies in Australia in 2015 and 2030. The Reference Case 2010 was prepared for the Australian Government by the Electric Power Research Institute (EPRI) and is the third document published in the series of technical reports developed.

According to the key findings, costs for new and less mature renewable and low-emission technologies are expected to decline more rapidly than mature technologies that typically emit higher levels of greenhouse gas emissions.

Global market conditions and supply and demand for individual technology components are a significant source of uncertainty and are expected to continue to have a significant influence on all technology costs into the future.

In 2015 mature technologies are generally at the low end of the cost range with the exception of open cycle gas turbines (OCGT). Also of note is a significant jump in costs between OCGT and solar technologies – which are unlikely to be able to compete in the absence of other supporting measures.

Emerging low-emission technologies may experience fairly significant cost reductions in coming decades. The report noted that the inclusion of particular technologies in the report does not reflect government policy decisions regarding the deployment of particular generation technologies.

The Reference Case 2010 establishes a piece of work that will enable data and information on electricity generation technologies in the Australian energy sector to be revised and published periodically.

“In light of the changing costs and performance of these technologies, this will ensure the latest information on new and emerging technologies is available in Australia to inform policymakers and the public,” the report states.

The report is being used by the Australian Energy Market Operator, including the National Transmission Network Development Plan released in December 2010, the Electricity Statement of Opportunities and Gas Statement of Opportunities.

The Government intends for the technology cost estimates to be regularly updated and released, with another update set for 2011.