A technical paper released by the Melbourne Energy Institute has found that the costs of all solar and wind technologies have been overestimated in the development of Australia’s energy policies.

 

The assessment, authored by Patrick Hearps and Dylan McConnell, reviewed technical and economic parameters of wind, photovoltaic (PV) and concentrating solar thermal (CST) energy generation technologies.

 

Levelised Cost of Energy (LCOE) calculations were used to develop cost outlooks and compare the outlooks to other projections, derived from capital and operating cost

data at a common renewable resource level, exclusive of subsidies or carbon costs.

 

The international analyses tended to indicate cheaper costs for all of the solar and wind

technologies than the 2010 dataset used by the Australian Energy Market Operator (AEMO), particularly in the case of the solar technologies (both PV and thermal), where the rate of cost reduction expected from the global analyses is faster than that in the AEMO dataset.

 

The study concluded that “when considering scenarios for new energy technology development and deployment, especially in the context of shifting away from greenhouse gas emitting energy sources, initial higher costs of renewable energy should not be considered an impassable barrier to deployment”.

 

“Rather the focus should be on whether learning curves can give confidence that the technology is able to achieve desirable cost reductions within an acceptable timeframe, and how much the rate of deployment is expected to change the rate of cost reduction.”

 

The Renewable Energy Technology Cost Review  is available here.