Insights
The National Energy Analysis Centre (NEAC) aims to support the energy transition with trusted insights for investors, planners, policy makers and the wider community. We will publish non-confidential insights into the Australian energy ecosystem developed through NEAC, CSIRO and other reliable sources.
We would love to know the sorts of insights that you would find most valuable!
Levelised costs analysis is an example of future insights available on NEAC
An example of the type of insight NEAC plans to share is levelised cost analysis. This method, utilised by CSIRO researchers, represents the sum of discounted costs per unit of delivered output over a technology’s lifetime.
Levelised cost analysis plays a crucial role in supporting energy policy decisions, guiding investment strategies, acting as an input into whole of economy modelling, and informing research and development priorities. However, levelised cost analysis is typically delivered through static reports, which presents several challenges. The quality and relevance of the data can vary significantly between sources, and the assumptions underpinning the analysis – such as technology, regional, and application specific assumptions – can greatly influence the outcomes. As a result, the findings may not always be current or directly applicable to the Australian energy landscape.
NEAC can provide levelised cost analysis of energy technologies using transparent, consistent, and Australia-specific assumptions, delivered in a digital format that enables interactive exploration and downloadable outputs.
An example of levelised costs analysis: Grid-scale medium duration storage
CSIRO researchers have been crunching the numbers to determine the levelised cost of medium duration energy storage technologies. For storage, levelised costs represent the average price at which energy can be sold for the storage investment’s net present value to be zero.1
Energy storage exemplifies the inherent variability in cost dynamics and suitability across diverse applications. Medium duration storage bridges the gap between short-term fluctuations and long-term energy needs, making it a versatile solution for grid stability. Assumptions related to energy input costs (e.g. electricity price), annual cycles and capital costs can have a large impact on the results when looking across technologies. The rapid evolution of energy storage solutions underscores the need for dynamic insights as new technologies emerge to meet diverse demands.
The interactive graph above breaks down the costs of various energy storage options for new medium duration storage technologies, both current and projected for 2050.
Technologies such as pumped hydro energy storage (PHES), compressed air energy storage (CAES), thermal energy storage with electricity input and electricity output (eTESe), and thermal energy storage with heat input and electricity output (hTESe) are illustrated.
Sensitivity analysis was conducted to better understand the input assumptions that have a major influence on the levelised cost results. Use the sensitivity selector to choose from a range of sensitivities, such as hours per cycle and cycles per year, offering deeper insights into cost dynamics. For example, the default 12 / 234 scenario assumes each technology stores electricity for 12 hours per cycle, with 234 cycles over the course of a year. This feature highlights the uncertainty inherent in storage technology costs due to variable usage.
All electricity storage costs are directly sourced from the CSIRO (2023) Renewable Energy Storage Roadmap, except for the Capex and Opex for Lithium-ion battery and PHES, which have been directly sourced from: Graham P, Hayward J, Foster J (2024) GenCost 2023‐24: Final report. CSIRO, Australia.
1Schmidt O, Melchior S, Hawkes A, Staffell I. Projecting the future levelized cost of electricity storage technologies. Joule 2019; 3:81–100.
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