Based on an assessment of the cost of generating electricity using 40 different technologies until 2050, a report released on Tuesday identified nuclear and wind power as competitive energy alternatives to coal-fired power.
However, while many nations are embracing wind power because it is an environment-friendly solution, nuclear power has become less attractive following the Fukushima Daiichi nuclear power plant disaster in Japan caused by the March 2011 magnitude 9 earthquake and tsunami.
The Australian Energy Technology Assessment Report developed by the Bureau of Resources and Energy Economics tapped for the first time carbon pricing to compare levelised cost of electricity using different technologies, said Ken Baldwin, a member of the steering committee that prepared the study.
By using carbon pricing, governments can make decisions on which technology to choose as the world moves toward a carbon-free economy, said Mr Baldwin, who is also the director of the Energy Change Institute of the Australian National University.
The study said solar and onshore wind productions are expected to produce some of the lowest electricity generation cost in Australia by 2030. He explained that the price of commercial solar cells had dropped drastically in recent years.
However, one more bad news for Australia's mining industry which is starting to slow down is that coal, one of the country's major exports, will be gradually cost out of the market in the future.
Other cost-competitive forms of electricity generators are combined cycle gas, biogas, biomass and nuclear power. Mr Baldwin warned that having restrictions on alternative energy such as nuclear would make battling climate change more difficult.
Global climate change initiatives aim to limit carbon dioxide levels to less than 450 parts per million to prevent temperatures form rising beyond two degrees Centigrade.
In response to the report, Clean Energy Council Deputy Chief Executive Kane Thornton said it confirmed that the ways Australia generated and consumed energy are changing fast.
"While the recent public debate often oversimplifies Australia's energy choice as 'clean vs cheap', this report shows that argument is now desperately out of date. Renewables are rapidly becoming the cheapest source of energy. By building renewable energy now we are able to create the diversity of sources we need to have low-cost and reliable energy in the future," Mr Thornton said in a statement.
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