GenCost: cost of building Australia’s future electricity needs

GenCost 2023-24 report released

The latest release was shaped by an unprecedented level of industry participation.

What's new?

• Renewables (solar and wind + firming) remain the lowest cost new build electricity technology.
• Large-scale nuclear technology costs included for the first time.
• Future wind costs revised upwards.
• An extensive FAQ section addressing common questions from current and past consultations.

Read the Executive Summary PDF (498 KB)

Next steps

The GenCost 2024-25 draft report will be released in the final quarter of 2024. The consultation period will be open for six weeks to gather stakeholder feedback.

A stakeholder webinar will take place during the consultation process to discuss the report's key insights and its role in AEMO's forecasting and planning activities. Details to be advised.

The final GenCost 2024-25 report will be released in the second quarter of 2025.

AEMO's Integrated Systems Plan

GenCost is an important input into AEMO's Integrated Systems Plan (ISP).

Updated every two years, the ISP outlines the lowest-cost investment to ensure Australians can access reliable, secure and affordable electricity, while meeting our national emission reduction targets. It provides a comprehensive roadmap for developing generation, storage and transmission as ageing coal-fired power stations retire.

The most recent ISP was published by AEMO on 26 June, 2024.

Large-scale nuclear costs introduced

The inclusion of large-scale nuclear costs this year was prompted by increased stakeholder interest in nuclear technology following the updated cost estimates for SMRs in the 2023-24 consultation draft.

Applying overseas costs to large-scale nuclear projects in Australia is complex due to the lack of a domestic nuclear industry and significant global differences in labour costs, workforce expertise, governance, and standards.

The GenCost 2023-24 report team estimated large-scale nuclear costs using South Korea’s successful nuclear program. They adjusted for differences in Australian and South Korean deployment costs by comparing the cost ratio of new coal generation in each country.

GenCost found nuclear power to be more expensive than renewables and estimated a development timeline of at least 15 years, including construction. This reflects the absence of a local development pipeline, additional legal, safety and security requirements, and stakeholder evidence. Long development times mean nuclear won’t be able to make a meaningful contribution to achieving net zero emissions by 2050.

Achieving the reported nuclear costs depends on Australia committing to a continuous building program like South Korea’s. Initial units are likely to incur higher costs, and a first-of-a-kind premium of up to 100 per cent is possible, although not included in the cost estimates for nuclear or other new electricity technologies in the report.