The Commonwealth Scientific and Industrial Research Organisation (CSIRO) in partnership with the Australian Energy Market Operator (AEMO) has released a report that shows that solar and wind hold the top spot when it comes to the cheapest ways of generating electricity.

The report also includes the costs of carbon capture and storage (CCS) in the future generation of electricity from fossil fuels as well as strong projections for quickly reducing costs of electrolyzers for hydrogen production (about 90% in the next three decades).

According to the report, while the costs of producing electricity from fossil fuels remain stable (or increase depending on the costs of CCS), the total costs of electricity generation from solar (rooftop, medium, or large) and wind (especially offshore wind) are projected to continue to decline.

In addition, the report indicates that battery costs will expectedly assume a downwards slope.

CSIRO discovered that the added costs of CCS technologies almost doubled the levelized cost of both coal and gas electricity generation.

The report notes that new coal power plant builds are likely to become more expensive to finance as the world moves towards a fossil-free future, making their deployment less likely.

The report also shows two major improvements:

Firstly, global modeling now determines the hydrogen production technology mix under each scenario, and the additional electricity demand imposed by hydrogen production from electrolysis.

Secondly, the deployment of carbon capture and storage outside of the electricity sector.

Paul Graham, Chief Energy Economist, CSIRO, said: “The energy sector is rapidly changing so we need updates like this report to ensure that our planning is based on the most up-to-date cost estimates.”

“It’s also crucial that stakeholders have an opportunity to scrutinize the changes to ensure they are consistent with direct industry experience.”

All the estimates in the report are based on a maximum of costs across nine weather years. When the costs are added to variable renewable generation costs and compared to other technology options, these estimates show that wind and solar PV remain the lowest-cost new build technologies.