Electricity produced by floating offshore wind farms is expected to be nearly three times cheaper than that produced by small modular nuclear reactors by 2030, a new draft report from the CSIRO has found.
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The CSIRO released the draft of its annual GenCost report last week which calculates the relative cost of various electricity technologies under different policy scenarios.
In the "current policies" scenario, by 2030 floating offshore wind is calculated as costing $5863 and small modular nuclear reactors as $15,959 per kilowatt.
A motion to scrap the Illawarra renewable energy zone and investigate small modular nuclear reactors instead was proposed by the Cronulla branch of the NSW Liberal Party for the party's November annual conference, however was later brought into line with the party's existing policy.
The cheapest electricity is calculated as being produced by gas, with large open cycle reactors producing a kilowatt of electricity for $865, however once carbon capture and storage is factored in, the cost of gas increases to $4526/kw.
Rooftop solar is expected to become the cheapest form of energy by 2040 as the price of panels comes down.
In the more ambitious scenario of global net zero emissions by 2050, the cost of floating offshore wind decreases to $3516 per kilowatt, while nuclear remains largely the same price.
If countries adopt more ambitious decarbonisation targets, the cost of floating offshore wind is expected to fall further, as additional deepwater sites are developed.
In the latest version of the report, the cost of offshore wind has decreased by nine per cent on previous years' estimates as the global offshore wind industry undergoes a period of adjustment.
A number of offshore wind projects in Europe have been cancelled due to higher costs, however the GenCost report expects these costs to reduce as the industry stabilises.
Volunteer for pro-wind farm group Good for the Gong Sophia Walter said the report highlighted the path forward for the decarbonisation of the Illawarra.
"For the east coast of Australia, offshore wind provides the best, consistent clean energy source for both domestic and industrial transition," she said. "It also reduces local environmental impacts with floating offshore construction methods."
Grant Drinkwater, spokesperson for the Coalition Against Offshore Wind said the group had a number of concerns with the report.
"Key concerns include the omission of recycling costs for solar panels and wind turbine blades which are significant, the sharp increase in cost estimates for nuclear power based on a single experimental case for small modular reactors rather than a comprehensive industry-wide analysis of established nuclear energy, the disregard of integration costs for renewable energy sources, potential overstatement of wind and solar capacity factors the inclusion of an arbitrary climate policy risk premium for coal and gas and an incorrect estimation of the lifespan of renewables."
In contrast to offshore wind, the cost of nuclear power has increased, after a leading small modular reactor project in the US failed to sell enough power to fund the project.
CSIRO director of energy Dr Dietmar Tourbier said the plan would inform Australia's renewable energy policies.
"As we work to reduce our emissions, GenCost plays a pivotal role in guiding decision-makers to plan and build reliable, low-cost energy solutions that will help power the future of Australia."
The report includes the cost of transmission and firming projects committed to be built between today and 2030, a response to critics of the previous versions of the report.
Energy and climate change minister Chris Bowen said the updated calculations reaffirmed the path towards net zero.
"The latest GenCost report reiterates what we already know - renewable energy is the cheapest form of energy in Australia now and in 2030, even when accounting for storage and transmission costs," he said.
Ted O'Brien, shadow climate change and energy minister, slammed Mr Bowen's response to the report, saying the Energy Minister was "deliberately misinterpreting" the findings.
"Labor should adopt an 'All-of-the-Above' approach to technology, which would protect against the premature closure of baseload energy, pour more gas into the market and better integrate renewables."
The final version of the report will be released in mid-2024.
