Renewable Energy Technology Cost Review

Renewable Energy Technology Cost Review
Melbourne Energy Institute



Executive Summary - Renewable Energy Technology Cost Review
This paper has undertaken a review of current and future costs of three forms of renewable energy
technology, comparing data from a range of international and Australian-specific studies, taking care
to compare data on the same basis of financial assumptions (discount rates) and resource quality.
The purpose was to compare both the current costs, along with the rate of decrease, and the reason
for differences between the studies. The Australian-specific datasets are the ‘Australian Energy
Generation Technology Costs’ report by EPRI, and the 2010 dataset used by the Australian Energy
Market Operator (AEMO), largely based on the EPRI data with a review from ACIL Tasman.
The  assessment reviewed  technical and economic parameters of  wind, photovoltaic and  solar
thermal energy generation technologies, considering technology specific learning rates and cost
reduction potentials.  It includes a detailed exploration of the factors contributing to the learning
rates and cost reductions.
Common financial assumptions (in particular discounting rates) are used, to provide a common basis
of comparisons and analysis. These parameters were utilized in  Levelised Cost of Energy (LCOE)
calculations to develop cost outlooks, and compare the outlooks to other projections.  Where
relevant, LCOE  is calculated from capital & operating cost data at a common renewable resource
level,  and includes the revenue generated from the sale of Renewable Energy Certificates, priced
under a simplified assumption at an unchanging $50/MWh.
The international analyses tended to indicate cheaper costs for all of the solar and wind technologies