Investing in more fossil fuels and limiting the rollout of wind and solar farms could cut 5 per cent from Australia’s electricity costs by 2050, the CSIRO says, but the strategy would require the nation to abandon all climate commitments and allow a massive surge in atmospheric pollution.
The trade-off, which has been modelled for the first time in the national science agency’s latest electricity generation cost scorecard to be released on Wednesday, is set to inflame Australia’s decades-long climate wars.
According to the CSIRO, new coal-fired power plants and more gas use could generate electricity at $124 per megawatt hour by 2050, measured in today’s dollars. By contrast, electricity would cost $131 a megawatt hour under the current plan for a net-zero-compliant grid powered mostly by renewable energy and backed up by batteries, transmission lines and gas.
The price gap has been mapped out as conservative political parties clash over renewables and emissions targets with the Albanese government, which has set a legally binding target for net zero by 2050 and an ambitious goal for renewables to reach 82 per cent of the grid by 2030 and more than 90 per cent by 2050.
Experts including the Grattan Institute and analyst Rystad have said the renewables rollout will fall significantly short of its 2030 target.
One Nation leader Pauline Hanson has declared global warming a “hoax”, with her party’s manifesto labelling climate action a “vehicle for creating a socialist Australia” and a government move to exert totalitarian control over society.
One Nation MP Barnaby Joyce on Tuesday doubled down on his party’s hardline opposition to renewables, which he declared “an environmental disaster and a blight on our landscape … and then you’ve got the transmission lines, the cobwebs of filth”.
The federal Coalition ditched its commitment to net zero in November, with Opposition Leader Angus Taylor pledging in May to keep coal plants running “as long and as hard as possible to get electricity prices down”.
Opposition energy spokesman Dan Tehan said on Tuesday the government must answer the question “Why aren’t we doing more to develop our coal and gas resources here, rather than selling them overseas?”
However, energy experts cautioned against any moves to trade Australia’s climate commitments and international standing for a nominal 5 per cent cost saving.
Grattan Institute energy director Tony Wood said the CSIRO’s “GenCost” report was a valuable estimate of energy development costs, but its long-range modelling 25 years into the future could not be perfectly precise.
Even if it were accurate, a 5 per cent cost increase from a grid with new coal and gas, or one dominated by renewables, represented a good value, he said.
“Five per cent is within the rounding accuracy of the modelling,” Wood said. “But if it was my money and I had to compare spending an extra 5 per cent to save the planet, I reckon that’s a pretty good investment.”
The Albanese government has cited previous versions of the GenCost report that found a renewables rollout to achieve net zero was the cheapest way to expand the grid to meet future industry and population growth.
However, the government will point to CSIRO’s instruction in GenCost for precedence to be given to another major energy report, the Integrated System Plan from the Australian Energy Market Operator.
“[GenCost] results are designed to be reasonably accurate but, by design, are substantially less sophisticated than the multimodel state-of-the-art framework deployed in the Integrated System Plan,” CSIRO said.
Coal plants are typically shut down by the owners when they are 44 years old. More than two-thirds of existing coal plants are 39 years old and due to exit the grid by 2035. Investors are unlikely to greenlight new coal plants, as banks and insurers have withdrawn lending to fossil fuels, and shareholders in publicly traded power utilities have been insisting on greater emissions cuts.
Energy demand is set to double by 2050, and Industry and Science Minister Tim Ayres argued renewables would be needed to generate most of the extra electricity and attacked conservative parties opposition to clean energy.
“We know that any new coal-fired power stations would struggle to secure financing and no new projects are currently proposed – which is why GenCost also queries the assumed prices of fossil fuels in its models, noting that the world will likely continue on embracing cheap, reliable renewable,” said a spokesperson for Ayres.
Emissions from the electricity grid make up about one-third of the nation’s greenhouse output. Renewables are considered the cheapest way to cut emissions across the economy.
“Solar, wind and batteries remain the lowest-cost technologies capable of supporting Australia’s net zero goals,” CSIRO said.
Independent analyst Climate Action Tracker has found the government’s policies are inconsistent with the Paris Agreement goal to hold global warming as close to 1.5 degrees as possible.
Increased emissions from coal power would significantly increase Australia’s contribution to global warming, and it said that if all countries mirrored Australia’s actions warming would exceed 2 degrees and potentially reach 3 degrees.
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Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
Nick Toscano is a business reporter for The Age and Sydney Morning Herald.Connect via X or email.
