The Albanese Government is reaffirming its commitment to affordable and clean electricity, following the release of the latest GenCost 2025–26 consultation draft report, which identifies firmed renewable energy as the lowest-cost option for electricity generation in Australia.
The report highlights that a combination of solar PV, wind, storage, and a small amount of gas or hydrogen represents the least-cost technology mix across all scenarios examined. CSIRO modelling further indicates that solar and wind are projected to outperform coal and nuclear in cost efficiency by 2030 and 2050.
Batteries, supported through government initiatives such as the Cheaper Home Batteries program, are also becoming more cost-effective, with capital costs for large-scale batteries falling by 15%. In contrast, black coal-fired power has become significantly more expensive, rising by 13%, while gas turbine prices have surged 32%.
“Renewables backed by storage remain the most cost-effective way to power Australia,” the report states, noting that recent electricity price increases are primarily due to supply shortages and fuel price volatility, not renewable energy.
The GenCost report also points out that coal, gas, or nuclear plants would need to operate at nearly full capacity—around 89 per cent—to achieve the low end of their cost range, compared to Australia’s current coal baseload operating at roughly 60 per cent. It adds that higher penetration of zero-fuel-cost renewables could limit the capacity factor achievable by new baseload plants depending on overall demand.
The Albanese Government emphasized that clear policy and stable investment are essential to deliver affordable, reliable, and cleaner energy. Alternative approaches, the government warned, risk undermining investor confidence, driving up costs, and delaying access to low-cost power for households, businesses, and industry.
Chris Bowen MP, Minister for Climate Change & Energy, said:
“GenCost is clear; renewables remain the cheapest new electricity, and firming them with battery storage, transmission, hydro, and a small amount of gas peaking is the best way to keep the lights on and put downward pressure on bills. Sadly, we are playing catch up after a decade of delay. The failure to build new generation energy supply has left Australians vulnerable to fossil fuel prices. Ageing coal and expensive nuclear would mean higher costs, higher bills, and decades waiting for a plan that does not stack up.”
Senator Tim Ayres, Minister for Industry, Innovation & Science, added:
“Renewables are not just the cleanest energy option, they’re the cheapest. This independent report reinforces the importance of continued investment in wind, solar, and storage to deliver affordable, reliable energy for Australian businesses, homes, and industry. We need to build out more renewable energy more quickly to replace retiring coal-fired power generation. The economics are clear, and Australians expect it of us.”
The GenCost 2025–26 report, which serves as Australia’s most comprehensive benchmark on electricity generation costs, has introduced a new System Levelised Cost of Electricity (SLCOE) methodology to enhance transparency and accessibility for industry stakeholders and policymakers.
Discover more from SolarQuarter
Subscribe to get the latest posts sent to your email.
