The Age: Green energy costs 'out of date'

THE federal government and the power industry have massively overestimated the cost of renewable energy, according to new University of Melbourne research, commissioned by the the government's own Garnaut climate change review.

Forecasts prepared last year for the Department of Resources, Energy and Tourism as it helped plan the future electricity network suggest solar and wind power are far more costly than they actually are.

In some cases, rooftop solar panels are already cheaper than the prices they were predicted to fall to in the year 2030.

''If you make the international comparisons to the US Department of Energy and the IEA [International Energy Agency], Australia is really relying on information that's very out of date,'' said Patrick Hearps, a University of Melbourne research fellow and technical director at the group Beyond Zero Emissions.

''If you're looking at how we should be planning energy over the next 10 or 20 years, and you are using the data provided to the government, you are not going to be looking at large-scale renewables. You are going to be looking at gas as an interim measure.''

The report Renewable Energy Technology Cost Review, launched last night, says that the ''cost curve'', dictating that solar, wind and hydro power becomes cheaper as more people use it, has dipped more sharply than predicted five years ago, suggesting that billions of investment could be misdirected.

It critiques the most recent assessment of the nation's future energy mix late last year by Australia's electricity generators, which used data developed by the Electric Power Research Institute, a non-profit US research organisation funded by energy companies.

The report found that photovoltaic panels produce energy at a cost of about $300 a megawatt hour - the cost predicted for 2030.

Wind power today can cost about $130 a megawatt hour, but the generator's data said it would not dip to that price until 2030. Solar thermal energy, which can directly replace ''baseload'' coal-fired power, is also dropping quickly in price.

The Minister for Resources and Energy, Martin Ferguson, said changes to the cost of renewable energy would be noted.