The Australian Government wants to transition the electricity system to net zero carbon emissions by relying on wind and solar power – excluding alternatives such as small nuclear reactors. Its justification for this switch rests on the claim that a renewables-dominated system is environmentally beneficial and economically superior to using fossil fuels and nuclear energy.

But its premise is based on a flawed argument which has left out key elements which portray a different picture.

Federal Energy Minister, Chris Bowen, policy-makers and other public figures use the CSIRO’s GenCost report and the Australian Energy Market Operator’s Integrated System Plan (ISP) to support their argument. These reports defend a belief of economic superiority for renewable energy which relies on two distinct claims:

1. That renewable energy is cheaper than alternatives, including fossil fuels, regardless of any cost of carbon or other policy constraints; and
2. That the planned transition is the cheapest pathway to reach Australia’s emission reduction targets.

The first claim is principally supported by GenCost, and the second by the ISP, though these claims are frequently conflated in policy discussions. However, the Centre for Independent Studies has identified many critical flaws in the analysis of both reports that destroy any credible support they could give to these claims.