Renewable energy backed up by storage and gas is the cheapest way to power Australia's $2.7 trillion economy in the transition to net zero in 2050, when electricity demand is expected to double.
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In its latest roadmap report, the Australian Energy Market Operator (AEMO) has confirmed the cost to reach the net-zero target, in line with the planned energy transition, over the next two decades will be $122 billion.
The integrated system plan, the result of two years of analysis and consultation, has been released as the debate over Australia's energy future went nuclear following the release of the opposition's plans to build reactors.
It belies coalition claims that the transition is going to cost Australia $1.5 trillion, Smart Energy Council CEO John Grimes said.
The opposition's so-far uncosted proposal to build seven reactors in five states - should it win the next federal election - has been met with a chorus of disapproval, ridicule and unconfirmed cost estimates of up to $600 billion.
The national energy market operator said it did not address the issue of nuclear power in its biennial system plan because the energy source "is not permitted by Australia's current laws."
It expects power demand to double to 410 terawatt hours in 2049/50, from around 180 terawatt hours now, after taking into account growth in energy efficiency.
In recent weeks, concerns have been raised about the prospect of power shortages if the energy transition slows as dirty coal power stations close down.
However, energy grid replacement with renewables represented the most cost-effective way of meeting federal, state and territory targets.
Market operator CEO Daniel Westerman said urgent updates to the national energy market are needed because of the progressive closure of coal-fired power stations reaching the end of their lifespans.
"Australia's energy transition is well underway, with renewable energy accounting for 40 per cent of electricity used in the past year," he said on Wednesday.
"The integrated systems plan is a road map to navigate Australia's power system through the energy transition, providing Australians with reliable electricity the lowest cost."
Almost 10,000km of new transmission lines are needed by 2050 as part of the energy plan.
Ten projects representing 2500km of transmission lines have already started, with a further seven projects identified.
While the transmission projects are set to cost $16 billion, the regulator's report says energy users will save $18.5 billion in avoided energy costs alongside more than $3 billion worth of emissions reductions.
Grid-scale wind and solar projects would increase six-fold by 2050, and there would be four times the amount of rooftop solar in the same time frame.
"Consumers are already a driving force in Australia's energy transition and this is set to continue," Mr Westerman said.
"If consumer devices like solar panels, batteries and electric vehicles are enabled to actively participate in the energy system, then this will result in lower costs for all consumers."
The Smart Energy Council's Mr Grimes said the AEMO plan outlined a clear path towards 2050.
"The total rollout cost to 2050 is $122 billion, to be almost entirely funded by the private sector," he said.
"This is a fraction of the federal opposition's beer-coaster economics claiming the energy transition will cost $1.5 trillion.
"We note the absence of modelling for nuclear power in the (report) because nuclear power is illegal in Australia."
Australian Associated Press
