Each year, CSIRO, and the Australian Energy Market Operator (AEMO), collaborate with industry stakeholders to update GenCost, a leading economic report that estimates the cost of building future electricity generation, storage and hydrogen production in Australia.
Have a general question? Try our FAQs below. If you have a more technical question, GenCost provides a comprehensive list of responses to commonly asked technical questions received during the past seven years. These responses are provided in the Final GenCost 2024-25 Report's Appendix D starting from page 105.
Each year, CSIRO, and the Australian Energy Market Operator (AEMO), collaborate with industry stakeholders to update GenCost, a leading economic report that estimates the cost of building future electricity generation, storage and hydrogen production in Australia.
Infographic depicting different forms of energy generation and storage including:
Have a general question? Try our FAQs below. If you have a more technical question, GenCost provides a comprehensive list of responses to commonly asked technical questions received during the past seven years. These responses are provided in the Final GenCost 2024-25 Report's Appendix D starting from page 105.
FAQ: General GenCost questions
The GenCost report is one of several studies used by business leaders and decision-makers to plan and build reliable and affordable future energy solutions and help us achieve net zero emissions by 2050.
Each year, CSIRO publishes GenCost in collaboration with the Australian Energy Market Operator (AEMO). It’s an unbiased, accurate and up-to-date economic report that provides cost estimates for building new electricity generation and storage projects, and hydrogen technologies, up to the year 2050.
These technologies include coal, natural gas, solar photovoltaics, onshore and offshore wind, solar thermal, nuclear, bioenergy, pumped hydro, hydrogen electrolysers and batteries.
The GenCost process is highly collaborative and draws on the deep expertise and knowledge of a large number of electricity industry stakeholders. It includes engagement and consultation with members of the electricity community to review the work and provide pre-publication feedback to improve its quality.
For more detail watch this animation explaining the GenCost process.
GenCost reports are developed over an annual cycle and actively provides opportunities for government, industry, the private sector, and economic specialists to ask questions and provide feedback.
Each year a large number of organisations provide input, ensuring a diverse range of perspectives and deep industry knowledge help refine the report.
GenCost receives unprompted feedback throughout the year, but specifically targets the December and January periods for open consultation.
The project maintains a mailing list to share draft outputs. To request inclusion, contact us
On CSIRO’s behalf, AEMO also hosts a consultation web page which outlines the submissions period and procedures.
The consultation is over a six-week period. The input and feedback gathered during consultation shapes the final report, which is released mid-year. Greater weight is given to input provided that is fact-based and includes verifiable data.
For more detail go to the GenCost 2024-25 Final Report Section 1.1: Scope of the GenCost project and reporting on page 15.
GenCost estimates the cost of electricity generation and storage for a wide range of technologies up to the year 2050.
To do this, the report includes two types of data:
- Capital costs: The upfront investment required to build each technology, updated with input from an engineering consultancy. Capital costs do not include ongoing operating expenses.
- Levelised cost of electricity (LCOE): The average cost of building and operating a generator over its lifetime, expressed as a cost per unit of electricity. This provides a standard way to compare costs across technologies.
LCOE is provided as a simplified guide, not a substitute for detailed system analysis.
For more detail go to the GenCost 2024-25 Final Report, Section 3: Current technology costs on page 35, and Section 6: Levelised cost of electricity analysis on page 68.
Levelised cost of electricity (LCOE) is a simple and widely used metric for comparing the cost of different technologies.
Levelised costs combine capital costs with running costs such as operating, maintenance and fuel, in units that enable us to compare technologies side by side.
The costs to maintain reliable renewable energy supply, known as ‘firming’ costs, are factored in from the current year forwards.
For an investor, LCOE indicates the average price of electricity they would need to receive over the design life of their investment to recover all their costs and make a reasonable return on investment. The technology with the lowest LCOE is considered the most competitive.
LCOE is only meaningful as a quick guide to competitiveness. Investors will need to carry out more in-depth modelling to support investment decisions and more complex questions such as policy analysis also require deeper modelling approaches.
For more detail go to the Final GenCost 2024-25 Report, Section 5: Levelised cost of electricity analysis from page 68. You can also read the Understanding the Cost of Australia’s Electricity Transition explainer.
Integration costs refer to the investments needed to support variable renewables like solar and wind, ensuring they provide a reliable and secure electricity supply. This is sometimes called 'firming costs', but GenCost uses the term 'integration costs'.
These costs cover investments in:
- Storage
- Peaking generation
- Transmission infrastructure
- System security devices such as synchronous condensers.
Our modelling identifies the most cost-effective combination of these investments.
Pre-2030 integration costs were first incorporated in the 2023-24 consultation draft in response to stakeholder feedback. While this change led to higher cost estimates, renewables were still found to have the lowest cost range of any new build technology.
For more detail go to the Final GenCost 2024-25 Report, Section 6.2.1: Framework for calculating variable renewable integration costs on page 69. The Frequently Asked Questions Appendix, D.4.7 and D.4.8 from page 113 are also helpful.
GenCost focuses on providing capital cost estimates and Levelised Cost of Electricity (LCOE) for new generation technologies. This information supports researchers and planners to conduct their own system cost studies, which assess the broader cost to society of different energy mixes.
Several Australian researchers and consultants are well-equipped to deliver these more complex system-wide analyses.
FAQ: Questions about renewables
The 2024-25 GenCost Final Report doesn’t fully reflect some recent transmission cost increases, as those figures weren’t finalised when our modelling was completed.
It’s common for complex economic reports like GenCost and AEMO’s ISP to have timing differences. AEMO’s ISP often uses GenCost data that is about a year old, as both organisations rely on the most recent published data available when modelling begins.
Because this data is typically 6 – 12 months old, the two reports can’t always align perfectly on cost figures.
Importantly, even if AEMO's latest draft figures had been included, the overall cost rankings of technologies in GenCost would not have changed, given transmission represents around 15 per cent of renewable costings. Confirmed figures will be considered in the 2025-26 GenCost Consultation Draft Report.
The levelised and capital costs for offshore wind are usually included in the GenCost report.
However, GenCost only calculates the levelised cost of 60 per cent to 90 per cent variable renewable energy (VRE) shares for the years 2024 and 2030. Offshore wind was not included in these calculations as there was none in 2024, and AEMO has not projected offshore wind for 2030.
These considerations are detailed in the GenCost 2024-25 Final Report, Section 5.3.12: Fixed and floating offshore wind on page 60.
But even when transmission costs are included, renewables remain the lowest cost option across most of Australia.
That’s why GenCost recognises the need for a mix of technologies in our electricity system – to ensure our grid remains affordable, reliable and secure.
For the seventh consecutive year, renewables are assessed as the lowest cost option for any new-build low-emission electricity generation technology.
The latest report highlights a slower recovery in wind power costs from global inflationary pressures, leading to upward revisions for onshore wind costs over the past year. In contrast, costs for solar PV and batteries have fallen.
Despite these shifts, the updated analysis reaffirms that renewables, including storage and transmission costs, remain the lowest-cost, new-build, low-emission technology.
This competitive position reflects a decade of cost reductions in wind, solar PV and batteries before the pandemic, compared to the flat costs of more mature alternatives.
GenCost does not recommend 100 per cent solar and wind for the electricity or broader energy sector. While technically feasible, it is not the most cost-effective solution for our energy transition.
A reliable electricity system needs a mix of technologies with different generation capabilities to efficiently meet demand at different times and regions.
Australia’s existing (but limited) hydro capacity offers low-emissions and flexible supply, while solar and wind provide the lowest-cost energy at scale.
Natural gas and storage are best suited to respond quickly to demand changes, and storage also helps shift intermittent renewable supply.
Australia is moving away from the need for traditional baseload power, but where continuous supply is preferred, gas with carbon capture and storage is currently the most competitive baseload option based on levelised cost data.
GenCost calculates the breakeven cost of new generation - the price needed for investors to recover capital, fuel and operating costs, plus a reasonable return on investment.
This is an indicator of what electricity prices need to be to encourage new investment, but it does not control the electricity price.
Electricity prices are controlled by the balance of supply and demand in the market. If supply is tight relative to demand, then prices go up. If supply grows faster than demand, then prices go down. Fossil fuel prices also have a major influence on price volatility.
For example in 2022, global gas supply constraints, triggered by the Russian-Ukraine war and unplanned coal outages, caused a gas price spike in Australia and other countries. Australian retailers responded by locking in higher-priced supply contracts for 2023-24.
Prices may ease if gas prices fall or new capacity is added faster than old plants retire, but if gas prices rise again or capacity retires too quickly, prices can go up - even when new renewables are cheaper to build.
Some of the factors affecting global electricity prices include:
- Fuel prices
- Resource quality
- Pace of the energy transition
- Market incentives
- Subsidies
- The age of energy infrastructure.
These differences mean there is no direct correlation between electricity prices and the share of renewables in a country’s energy mix.
For electricity price forecasts, refer to the Australian Electricity Market Commission's ten-year outlook.
More information is in the Final GenCost 2024-25 Report, Frequently Asked Questions Appendix, D.4.17 on page 121.
Traditionally, our electricity system was thought to rely mainly on steady baseload power from coal, supplemented by gas and hydro to meet varying demand throughout the daily cycle.
This view oversimplifies the historic reality; only a few of the very low-cost coal plants operated consistently at full capacity, most ramped up during the day and backed off at night.
For many decades the average capacity factor of coal plant in Australia has been around 60 per cent, not the idealised 90 per cent.
In moving to variable renewables, the capacity factor of our main energy source will be even lower at around 30 per cent and supply will be more intermittent.
Operating an electricity system with intermittent resources in a reliable way can be achieved with increased deployment of storage and the continued use of peaking generation technology powered by natural gas or its lower emission substitutes such as biogas or hydrogen.
Fortunately, the low cost of solar PV and wind and the declining costs of storage make this approach to operating a reliable electricity system economically viable whilst delivering lower emissions to address climate change.
For more detail go to the Final GenCost 2024-25 Report, Section 6.3 Storage requirements underpinning variable renewable costs on page 79.
FAQ: Nuclear questions
At the request of several consultation submissions, the 2023-24 GenCost Report (released May 2024) included the first detailed costings for new build large-scale nuclear electricity generation in Australia. As Australia has never deployed nuclear power, applying overseas costs to large-scale nuclear projects here is not a straightforward process. There are significant differences in labour costs, workforce expertise, governance, and standards, so the data source must be carefully selected.
GenCost used South Korea’s successful nuclear program as a basis for its large-scale nuclear cost estimates. It adjusted for differences between Australian and South Korean deployment costs by comparing the ratio of new coal generation costs in both countries.
GenCost's method offers a logical, transparent, and policy-neutral approach to estimating the costs of large-scale nuclear deployment in Australia. However, the reported costs can only be achieved if Australia commits to a continuous building program after constructing an initial higher-cost unit. The first unit of any new technology in Australia is expected to be impacted by higher costs, with a first-of-a-kind cost premium of up to 120 per cent. In the 2024-25 report, we've provided some first-of-a-kind premiums for electricity generation technologies we haven't built before in Australia.
The GenCost 2023-24 Final Report provides a detailed discussion of the method for estimating large-scale nuclear costs in Section 2.5 from page 31.
It's standard practice that the financing period for an asset is less than its full operational life, similar to a car or house loan.
For power stations, warranties expire and refurbishment costs increase around the 30-year mark. As a result, we use a 30-year lifespan for financial planning.
For more detail go to the Final GenCost 2024-25 Report, Frequently Asked Questions Appendix, D.4.1 on page 109 and D.4.14 on page 120.
Yes. The Final GenCost 2024-25 Report calculates the potential cost advantages of nuclear's long operational life.
It found that nuclear does not have a unique cost advantage from operating longer than other technologies. Similar cost savings can be achieved with shorter-lived technologies, even when factoring in that these may need to be built twice over the same period.
This is because the second build of shorter-lived technologies is typically cheaper, thanks for ongoing cost reductions.
Additionally, nuclear requires substantial reinvestment to achieve long operational life, which offsets any potential advantage. Without this reinvestment, nuclear plants cannot continue operating for extended periods.
Because nuclear projects take so long to deploy, any cost savings from the second half of their operational life would not be realised until around 45 years from now - making them far less valuable to consumers compared to technologies that can be built and updated sooner.
For more detail go to the Final GenCost 2024-25 Report, Section 2.1: Nuclear capital recovery period and long operational life on page 25.
While the average capacity factor for nuclear in the US is 93 per cent, the global average is lower at 80 per cent and 10 per cent of nuclear plants operate at below 60 per cent.
When planning investments, it’s important to consider a range of operational outcomes, not just a single figure - especially in places like Australia where there is no existing nuclear industry to inform local performance.
Australia does, however, have over 100 years of experience running baseload coal plants, which operate similarly to nuclear. Over the past decade, these coal plants had an average capacity factor of 59 per cent, with the highest reaching 89 per cent.
GenCost applies a consistent method across all technologies, assigning a capacity factor range that spans:
- A high point based on the 10-year maximum, and
- A low point set at 10 per cent below the 10-year average.
For more detail go to the GenCost 2023-24 Final Report, section 2.5: Estimating large-scale nuclear costs from page 31.
No. To keep calculations simple and transparent across all technologies, GenCost excludes costs that won’t significantly affect a technology’s competitive position.
The common cost factors we include for each technology are:
- generation capital
- capacity factor
- construction time
- operating and maintenance costs
- fuel efficiency
- fuel cost.
For more detail on cost factors included in LCOE calculations go to the GenCost Final Report 2024-25 Frequently Asked Questions Appendix, D.4.4 on page 111 and D.4.10 on page 118.
New large-scale nuclear projects are generally lower cost than Small Modular Reactors (SMRs), but both remain moderate to high-cost sources of electricity. This can seem inconsistent with reports of low-cost nuclear electricity in some countries, but there are two key reasons:
- Costs don't transfer easily between countries
Even with the same technology, nuclear generation costs vary between countries due to:- Differences in installation, maintenance and fuel costs
- Subsidies or government support
- Levels of state versus private ownership
- Most low-cost nuclear is from older, fully paid off plants
Many low-cost nuclear projects overseas refer to existing plants that were:- Built with government funding, or
- Have already recovered their capital costs
These circumstances allow older plants to supply electricity at lower prices than new nuclear projects. In countries like Australia, where no nuclear infrastructure exists, building nuclear would reflect the full capital and development costs of new construction.
More information on why nuclear may be lower cost in some countries is available in the Final GenCost 2024-25 Report, Frequently Asked Questions Appendix, D.4.18 on page 122.Public discussion on nuclear deployment in Australia often conflates total development time with construction time.
Total development time includes construction, as well as pre-construction activities such as:
- site selection and acquisition
- technology design and engineering
- grid connection and impact studies
- environmental and technology permits
- sourcing fuel and water
- accessing project financing development and construction teams.
All these steps must be completed before construction can begin. Given Australia’s lack of a nuclear development pipeline and additional legal, safety, and security requirements, the first nuclear plant is likely to face significant delays. Subsequent plants could be built more quickly once a pipeline is established.
The GenCost 2024-25 Final Report highlights that global median construction times have increased from 6 to 8.2 years over the last five years. Only countries with low levels of democracy have achieved construction times of less than ten years. Among democracies, Asian nations have shortest construction times, while western democracies have the longest - with recent builds taking 17 years in Finland and 21 years in the US.
These construction times do not include the pre-construction activities listed above or the regulatory and legislative changes Australia would need to enable nuclear deployment.
For more information on nuclear development times, visit the GenCost 2024-25 Final Report, Section 2.3: Nuclear development lead times from page 32.
ANSTO was a reviewer of the GenCost report as part of standard consultation between government bureaus.
Written submissions made to GenCost during the AEMO-hosted consultation phase can be viewed on the AEMO website.