Wind and solar, and not nuclear, the key to cheaper energy: CSIRO
December 17, 2025
Sydney Morning Herald
A mix of solar farms, onshore wind turbines, energy storage assets and gas is the cheapest option for the future of Australia’s electricity grid, new CSIRO modelling has found, but adding nuclear energy, carbon capture or offshore wind projects will push up power prices.
The Commonwealth science agency’s latest cost projections confirm a power system dominated by backed-up renewables is the lowest-cost way to replace the nation’s retiring fleet of coal-fired power plants while catering for growing electricity demand and cutting net emissions to zero over the next 25 years.
The CSIRO has found that combining onshore renewables with back-up from batteries, hydropower and gas to be the cheapest transition path away from coal-fired power plants.
The draft CSIRO report, to be released on Wednesday, comes amid renewed political debate over the cost of Australia’s energy transition, as the Coalition fights to dismantle the Albanese government’s clean energy targets and argues taxpayer funds should be available to technologies including carbon capture and storage, and nuclear energy.
Today’s average wholesale electricity cost – what retailers pay for power before on-selling it to customers – is around $129 a megawatt-hour on the eastern seaboard. The CSIRO estimates Labor’s ambition for an electricity grid powered 82 per cent by renewable energy by 2030 could deliver wholesale electricity prices of $81 a megawatt-hour – or $91 a megawatt-hour including the cost of transmission lines.
Experts and industry leaders, however, warn the rollout is currently lagging the speed required for the government to meet that target, and an urgent uplift in investment and project approvals is needed to keep it within reach.
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By 2050, wholesale power costs are expected to increase to between $115 and $124 a megawatt-hour, which would still be cheaper than today, the CSIRO said. However, when factoring in the cost of transmission lines, it would be between $135 and $148 a megawatt-hour, the agency said.
But adding “first-of-a-kind” technologies, such as carbon capture and storage and offshore wind farms, to the mix alongside solar and onshore wind farms to deliver net zero emissions by 2050 would push average projected electricity costs even higher, it added. Nuclear remains “consistently the highest cost” option, the CSIRO said.
“The combination of solar PV [photovoltaic], onshore wind, storage and either natural gas or hydrogen was the least-cost technology mix in all cases examined, with the addition of carbon capture and storage, offshore wind and nuclear leading to higher average electricity costs,” said the GenCost report, which was jointly prepared by CSIRO and the Australian Energy Market Operator.
CSIRO director of energy Dr Dietmar Tourbier said there was a cost associated with the build-out of Australia’s future electricity system under any potential scenario. “GenCost plays a vital role in producing and sharing trusted, evidence-based information with stakeholders to help understand that cost,” he said.
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Jackie Trad, the chief executive of the Clean Energy Council, which represents renewables developers, said the figures demonstrated that Australia could replace retiring coal capacity while maintaining affordability and reliability for households and businesses.
“Research continually shows that if Australia wants affordable power as coal retires, the answer is to build more renewables, invest in storage and firming, and keep the system flexible,” Trad said. “Delaying the transition or forcing in higher-cost technologies will only push bills up.”
Energy Minister Chris Bowen said the findings demonstrated renewables, backed up by battery storage, hydropower, transmission lines and fast-start gas “peaking” plants, were the “best way to keep the lights on and put downward pressure on bills”.
“GenCost also confirms the Coalition’s expensive ageing coal and nuclear obsession would mean higher costs, higher bills, and decades waiting for a plan that does not stack up,” Bowen said.
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