Nuclear power ‘much more expensive’ than renewables, CSIRO finds

An independent report showing nuclear energy in Australia would be significantly more expensive than renewables has put political pressure on opposition plans to introduce the reactors into the energy grid.

May 22, 2024, updated May 22, 2024
Nuclear power would be much more expensive than renewables, according to a study by the CSIRO. (Arvin Temkar/Atlanta Journal-Constitution via AP)

Nuclear power would be much more expensive than renewables, according to a study by the CSIRO. (Arvin Temkar/Atlanta Journal-Constitution via AP)

Updated economic modelling released on Wednesday found that renewable energy – including costs associated with transmission and big batteries to support it – remains the lowest-cost, new-build technology.

Prepared by the national science agency CSIRO and the Australian Energy Market Operator, the latest edition of the benchmark GenCost report found the cost of building a large-scale nuclear power plant would be at least $8.5 billion.

It comes as the coalition has vowed to add nuclear power to the nation’s energy grid, but has not revealed the locations of possible sites.

Energy Minister Chris Bowen said the report highlighted why the focus on wind and solar, as opposed to nuclear, was important.

“The CSIRO points out that nuclear will (have a) very long lead time to build, very slow to build,” Mr Bowen told ABC radio on Wednesday.

“Nuclear is slow and expensive and risky when it comes to the reliability of Australia’s energy system.”

While the report found electricity generated from renewables would cost between $73 and $128 per megawatt hour, it would cost $141 to $233 per megawatt hour for large-scale nuclear reactors and $230 to $382 per megawatt hour for small modular reactors.

It could take until 2040 at the earliest to build a single plant, as nuclear power has extra safety and security hurdles, no investors circling, and laws banning it would need to be repealed, the report said.

GenCost also warned of a massive “first of a kind” premium when starting from scratch to build a reactor, which would likely double the cost of going nuclear.

Further, large-scale nuclear units are typically 1000 to 1400 megawatts, which means the wider network would have to build in a large reserve to cover any outages – at a time when there are no coal plants in operation.

But, in theory, so long as that reserve is built there would be no technical barriers for nuclear reactors in Australia, the report found.

Opposition foreign affairs spokesman Simon Birmingham said the coalition would consider the findings of the report.

“We want to make sure that we present a comprehensive policy there that doesn’t just look at one part of the energy sector, namely generation, but also includes all of the things that go into the prices,” he told ABC radio

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CSIRO’s chief energy economist and GenCost lead author Paul Graham said the modelling provided a “logical, transparent and policy-neutral” method of costing nuclear’s potential deployment in Australia.

But the costs estimated in the report can only be achieved if Australia commits to a continuous nuclear building program, he warned.

Small modular nuclear reactors (SMRs) – potentially suited to worksites far from the national grid – remain prohibitively expensive and would not be available until the 2030s.

The new-build cost of solar and wind overlaps with the lower-end of the cost range for coal and gas generation, but these high-emission technologies are not consistent with Australia’s existing climate change policies.

Excluding high-emission generation options, the next most competitive were solar thermal, gas with carbon capture and storage, large-scale nuclear and coal with carbon capture and storage.

One year on from energy technology costs jumping 20 per cent on average, inflationary pressures have eased but the results are mixed as each is grappling with different supply chains.

Onshore wind generation technology has increased by a further eight per cent, solar farms cost eight per cent less, and gas turbine costs are up 14 per cent.

Wind has suffered the largest increase in costs and has been the slowest to recover from global inflationary pressures associated with the pandemic.

Onshore and offshore wind costs are expected to take longer to fall than rival sources.

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