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, storage 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 2025-26 Consultation Draft Section 1.1: Scope of the GenCost project and reporting on page 12.
The Simple Electricity Model (SEM) is an open-source model developed by CSIRO to support the new System Levelised Cost of Electricity (SLCOE) method in GenCost. It provides a streamlined way to estimate future National Electricity Market (NEM) generation mixes and average generation costs, including renewable integration costs.
The SEM is publicly available and designed for industry professionals such as data scientists, engineers, and academics who want greater transparency and access to the modelling behind GenCost. While the model simplifies system-level cost estimation, it still requires:
- Specialised knowledge (typically university-level, including linear programming concepts)
- Access to external software and licences to run the model
This means the SEM is best suited for users with technical expertise and resources, rather than for general public use. Simpler spreadsheet type models were considered but were not accurate enough to reliably estimate system costs.
SLCOE takes a system-wide approach. It estimates the average cost of electricity when a mix of generation, storage, and transmission assets are deployed to meet demand reliably. This includes renewable integration costs and models different emissions reduction scenarios out to 2050. By considering the lowest-cost mix of technologies rather than individual options, SLCOE provides a more comprehensive view of future electricity costs.
Electricity system models are mathematical tools that help identify the most cost-effective mix of generation, storage, and transmission to meet electricity demand and emissions targets.
Most system models are complex commercial tools that require large teams to operate.
System modelling also helps explore the costs of integrating renewable energy sources like solar and wind, which depend on weather. It identifies the most affordable ways to maintain supply when renewables produce less power for long periods.
Supporting resources include:
- Storage (eg. batteries)
- Peaking generation (eg. gas plants for short bursts)
- Transmission infrastructure
- System security devices (eg. synchronous condensers)
While new coal projects in Australia are unlikely due to their high emissions, GenCost includes the most efficient design - called advanced ultra-supercritical pulverised coal for two key reasons:
- Lower emissions: This design produces fewer emissions than older, less efficient coal plants, making it the only coal option with even limited plausibility in a net zero context.
- Carbon capture readiness: If coal generation were ever paired with carbon capture and storage (CCS) in the future, the process would reduce fuel efficiency. Starting with a high-efficiency design helps offset that loss.
This approach ensures modelling represents the most technically and environmentally plausible coal pathway, rather than including outdated designs that are incompatible with net zero targets.
Stakeholders asked for greater transparency and a more comprehensive method to estimate future electricity costs. While the Levelised Cost of Electricity (LCOE) is useful for comparing individual technologies, it doesn’t capture the broader impacts of integrating multiple energy sources into the grid. SLCOE addresses this by taking a system-wide approach, considering generation, storage, transmission and renewable integration costs under different emissions reduction scenarios.
Making the SEM publicly available further responds to requests for open access to the modelling and data behind GenCost. This collaborative approach ensures GenCost remains a trusted, evidence-based reference for planning and investment decisions across the electricity sector.
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 three 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 an individual generator over its lifetime, expressed as a cost per unit of electricity. This provides a standard way to compare costs across technologies.
- System levelised cost of electricity (SLCOE): This is the average cost of supplying electricity across the whole system. It’s calculated by dividing the total cost of generation, storage, and new transmission by the total electricity demand in the National Electricity Market (NEM). To do this, GenCost uses system modelling to find the lowest-cost mix of technologies and then works out the average cost for that mix.
SLCOE is the best measure for projecting future average generation costs, while LCOE is helpful for comparing the costs of individual technologies, even those that may not end up in the lowest-cost mix.
For more detail go to the GenCost 2025-26 Consultation Draft, Section 2: Current technology costs on page 14, and Section 5: Levelised cost of electricity analysis on page 46.
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.
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 2025-26 Consultation Draft, Section 5: Levelised cost of electricity analysis from page 46. You can also read the Understanding the Cost of Australia’s Electricity Transition explainer.
FAQ: Questions about renewables
The 2025-26 GenCost Consultation Draft includes AEMO's most recent transmission cost data which was released in July as part of its 2025 Inputs Assumptions and Scenarios Report.
GenCost explores a limited set of scenarios for Australia's future electricity mix finding that onshore wind is chosen over offshore wind in those cases.
However, this doesn’t mean offshore wind has been ruled out. Our modelling only considers average costs, not the full range of possible outcomes. When we look at LCOE analysis, which does include the full range, the lowest-cost offshore wind resources could be competitive with projected future generation prices.
These considerations are detailed in the GenCost 2025-26 Consultation Draft, Section 5.5: LCOE estimates.
But even when higher 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.
System modelling shows that renewables make up the largest share of electricity generation under a wide range of emissions targets.
Costs for coal, gas, and nuclear have risen, but they are unlikely to fall significantly. These technologies are mature, so major cost reductions from new innovations are not expected.
Wind power costs were affected by global inflation, leading to several years of upward revisions for onshore wind. These increases have only started to moderate in the past year.
In contrast, costs for solar PV and batteries have recovered more quickly, including periods where costs fell.
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 future supply.
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 GenCost 2025-26 Consultation Draft, Frequently Asked Questions Appendix, D.4.13 on page 196.
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 (weather dependent).
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 GenCost 2024-25 Consultation Draft, Section 5.4 SLCOE on page 49.
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 one or two initial higher-cost units. The first units of any new technology in Australia are expected to be impacted by higher costs, with a first-of-a-kind cost premium of up to 120 per cent. GenCost provides estimates of first-of-a-kind premiums for a wide range of 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 GenCost 2025-26 Consultation Draft, Frequently Asked Questions Appendix, D.4.1 on page 89.
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 2025-26 Consultation Draft, Appendix D.4.2 page 90.
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 91.
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 GenCost 2025-26 Consultation Draft, Frequently Asked Questions Appendix, D.4.14 on page 96.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 are published on the AEMO website.