News & insights
Date: May 2024 | Client: AEMO | Sector: Energy | Energy markets | Energy infrastructure | Expertise: Regulatory finance
The Weighted Average Cost of Capital (WACC) for various electricity generation and storage technologies in Australia
In 2023, AEMO Services commissioned CEPA to provide independent advice on appropriate assumptions on the weighted average cost of capital (WACC) for various electricity generation and storage technologies and various revenue strategies. CEPA’s report is available from AEMO Services’ website.
The WACC is influenced by many uncertain factors and is highly project specific, making it challenging to estimate. However, this assumption has a material impact on AEMO Services’ market modelling outcomes, which inform its system planning functions.
More than 20 market stakeholders were engaged to better understand the risks currently faced by renewable energy and storage projects. CEPA’s report considers the outcomes of this survey - alongside other sources of evidence - and presents a stylised set of WACC assumptions suitable for electricity market modelling.
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