The GenCost report is entirely flawed. The Centre for Independent studies recently conducted analysis of the report and found multiple instances of them overfitting the model and match fixing the transition cost
The six fundamental flaws underpinning the energy transition - The Centre for Independent Studies (cis.org.au)
The ISP claims a renewables-dominated grid is the cheapest option for our energy system without a comparison to any alternative, namely coal or nuclear. This failure to compare technologies on an even playing field amounts to apparent ‘match-fixing’ the energy transition. AEMO does this by excluding any scenario without renewables and carbon targets that could be used as a neutral baseline and reveal the true cost of policy decisions.
The CEO’s preface for the ISP states: “Renewable energy connected by transmission, firmed with storage and backed up by gas is the lowest cost way to supply electricity to homes and businesses through Australia’s energy transition.”[85]This is a tautology — there is no other conclusion the ISP could have reached regarding the cheapest option, given its exclusion of nuclear due to its legal status and the removal of the only baseline scenario that could have allowed for coal refurbishments or replacements in the model.
If AEMO had framed the ISP’s purpose as being restricted to identifying the cheapest path for building transmission to support a renewables-dominated grid, this exclusion of coal and nuclear would be understandable. But instead, the ISP has made the broader claim of finding the “lowest cost way to supply electricity”. This has resulted in Energy Minister Chris Bowen and Science Minister Ed Husic announcing the ISP “confirms that a renewable grid with hydro, batteries, flexible gas and transmission is the lowest cost way to deliver a secure and reliable energy grid.”[86]This assertion implies that other feasible alternatives have been tested through a cost-benefit analysis when none has.
Rather, AEMO has allowed government policy (i.e. renewables and emissions reduction targets and a dismissal of nuclear) to dictate the assumptions in its model, thus ‘match-fixing’ the outcome. This circularity — where policy shapes the ISP which then endorses the policy — limits a transparent evaluation of alternatives, entrenching predetermined policy directions without a full accounting of their costs and benefits.
Feasible alternatives to renewables were excluded from the analysis through the selection of scenarios that enforces binding renewable energy and carbon targets.
