Because in fourteen days time the country enters a national federal election year and, one likely to be dominated by misinformation and downright lies on the Internet, television, radio and in political flyers stuffed in letterboxes - especially on the subject of nuclear powered electricity - here are the basic positions of the three main parties distributing either political opinion or science-based information.
Perhaps consider bookmarking it for future reference as the election campaign heats up.
The latest Coalition Dutton-Littleproud position on its proposal to insert nuclear power as a preeminent component in Australia's energy mix began with this media release on 13 December....
Frontier Economics, INSIGHT, 13 December 2024:
Economic analysis of including nuclear power in the NEM
At Frontier Economics, we’ve been providing the economic analysis and frameworks to key energytransition decisions in Australia for more than 25 years. As independent economic consultants, we regularly inform ourselves on, and dig deep into, the most important decisions impacting society.
This is the second independent report in this series on modelling the economics of including nuclear in Australia’s National Electricity Market (NEM).
The objective of the first report, Report1 – Developing the base case to assess the relative costs ofnuclear power in the NEM, was to establish a proper basis for comparing the cost impacts of nuclear power – based on AEMO’s Integrated Systems Plan (ISP) results.
Once again, we expect and welcome robust debate on the work we present. Our report has been funded and directed solely by Frontier Economics, and consultation with various government and private sector parties has been sought to ensure we modelled the inclusion of nuclear power in the NEM most accurately.
Report 2: Economic analysis of including nuclear power in the NEM
In this second report, we again using AEMO modelling as our basis for comparison, using their ‘Step Change’ and ‘Progressive’ scenarios to compare the costs of nuclear power in our energy ecosystem.
"You can’t compare renewable energy and nuclear power generation and costs like apples to apples. We’ve done the modelling in these AEMO scenarios with a wider, and more detailed, lens on how the two options compare in real life, and the data speaks for itself. In both scenarios, including nuclear power in our energy mix is cheaper – by up to 44% - for Australians in the medium-term future. - Danny Price, Managing Director, Frontier Economics"
Key considerations from the report:
Many commentators simply and erroneously compare the cost of a renewable generator (wind or solar) plus the costs of back-up generation to the capacity and operating costs of a nuclear power station.
Such crude assessments do not account for the fact that much more renewable capacity is required to produce the same amount of electricity compared to a nuclear power station.
Nor does it account for the requirement to store surplus electricity from renewable sources as well as the back-up generation. An enormous amount of investment required to connect renewable generators located in areas where there is presently no or inadequate transmission network capacity.
Many other calculations are ignoring transmission costs entirely, which we have considered in this modelling.
Our modelling in this report has concluded:
The AEMO’s Progressive scenario including nuclear power is 44% cheaper than the Step Change model without nuclear.
Using a Step Change model with nuclear will garner a 25% cheaper solution than using renewable and storage alone.
Highlighting that nuclear power in Australia’s energy system is cheaper in both scenarios.
The Australian Government response begins thus....
Minister for Climate Change and Energy, Chris Bowen
Under the Opposition's nuclear scheme Australians will pay more to sit in the dark
13 December 2024
Peter Dutton has today confirmed his nuclear scheme will not bring down household bills and will instead leave Australians paying billions to sit in the dark.
Despite their bold claims that the most expensive form of energy will bring down bills, the Coalition’s dodgy costings released today are silent on tackling household bills. The report simply says on page 18: “they do not, at this stage, present any results for price.”
But experts have previously found that adding nuclear to Australia’s energy mix would push up power bills by up to $1,200 a year, while it risks blackouts as households wait 20 years for reactors to come online.
Aside from failing to offer anything to households on power bills, there are three immediate fatal flaws in the Coalition’s nuclear energy costings.
One, the Coalition are irresponsibly asserting that costs will be lower because Australians will use less power. They ignore the independent advice from the Australian Energy Market Operator.
Peter Dutton’s nuclear scheme isn’t a plan to meet our growing energy needs –it’s nothing more than a recipe for bringing our economic growth to a halt.
Two, the costs don’t reflect any real world experience. The Coalition’s modelling spuriously assumes nuclear will be supplied at $30Mwh. The CSIRO, which bases their work on the international experience, says that in order to pay off its costs, it needs a price of between $145-$238Mwh.
The Coalition is ignoring the massive cost blowouts and delays seen routinely around the world during the construction of nuclear reactors, including in countries where the industry is well established.
These costings are also silent on how much taxpayers will pay for it, and exactly what services Peter Dutton would cut to fund his nuclear scheme. Given his mega costs today are equivalent to more than 10 years of the Medicare budget Australians should be worried.
Three, the Coalition just takes a guess that there is no need to build transmission to get power into homes and businesses. They invent a $52 billion difference in transmission spend, but have no plan to transport nuclear energy to wherever it’s needed.
Nothing in today’s so-called “costings” addresses the need for energy bills coming down now or the near-universal evidence that nuclear would take too long, cost too much, and slow renewable investment and generation. This is not a plan to keep the lights on.
Australia needs new, cheap power now, not expensive power in 20 years. Ageing, expensive and unreliable coal plants are closing and we have to fill the gap. Dutton’s nuclear scheme would have us short on power for two decades – a sure-fire recipe for rolling and expensive blackouts.
Labor’s plan is delivering cheaper energy right now. Since coming to Government we have brought online new electricity that is the equivalent of more than 3 entire Snowy Hydro schemes.
Australia is on track to bring more renewable energy online this year than any other year, and bills are forecast to come down as more renewables come online over the next decade.
We are rolling out batteries that can store renewable energy around the country – providing enough power storage to cater for 90% of peak household demand to make sure night or day Australians have the power when and where they need it.
The considered scientific position.....
CSIRO, News, December 2024:
The question of nuclear in Australia’s electricity sector:
9 December 2024
Key points
Nuclear power does not currently provide the most cost competitive solution for low emission electricity in Australia.
Long development lead times mean nuclear won’t be able to make a significant contribution to achieving net zero emissions by 2050.
While nuclear technologies have a long operational life, this factor provides no unique cost advantage over shorter-lived technologies.
This explainer was updated on 09 December 2024 to reflect costings included in the draft GenCost 2024-25 Report.
AEMO's Integrated Systems Plan
As Australia works towards emissions reduction targets in the transition to net zero, we know the electricity sector has a major role to play. We also know it makes sense to assess a full range of technologies: some new and emerging, some established and proven.
In this context some proponents want nuclear to be considered as an option for decarbonising the electricity sector.
Despite nuclear power being a component of electricity generation for 16 per cent of the world’s countries, it does not currently represent a timely or efficient solution for meeting Australia’s net zero target.
Here’s why:
Nuclear is not economically competitive with solar PV and wind and the total development time in Australia for large or small-scale nuclear is at least 15 years.
Small modular reactors (SMRs) are potentially faster to build but are commercially immature at present.
The total development lead time needed for nuclear means it cannot play a major role in electricity sector emission abatement, which is more urgent than abatement in other sectors.
Understanding GenCost calculations
GenCost is a leading economic report by CSIRO in collaboration with the Australian Energy Market Operator (AEMO) to estimate the cost of building future electricity generation and storage, as well as hydrogen production in Australia.
It is a policy and technology neutral report and the annual process involves close collaboration with electricity industry experts. There are opportunities for stakeholders to provide pre-publication feedback, ensuring the accuracy of available evidence.
Paul Graham, our Chief Energy Economist and lead author of the report, said GenCost is an open and public process.
"The report's data is not just for AEMO planning and forecasting; it’s also used by government policymakers and electricity strategists who require a clear, simple metric to inform their decisions," Paul said.
"To facilitate a straightforward comparison across different technologies, the GenCost report conducts a levelised cost of electricity analysis. This method calculates a dollar cost per megawatt hour (MWh) over the economic life of the asset, incorporating initial capital expenses and any ongoing fuel, operation, and maintenance costs."
The draft GenCost 2024-25 Report released on 09 December 2024 found renewables continue to have the lowest cost range of any new build electricity generation technologies.
Infographic showing annual change in capital costs and levelised cost of electricity (LCOE).
One of the factors that impacts the high and low cost range is the capacity factor. The capacity factor is the percentage of time on average that the technology generates to its full capacity throughout the year. Costs are lowest if technologies. such as nuclear, can operate at full capacity for as long as possible so they have more generation revenue over which to recover their capital costs.
Nuclear technology is capable of high capacity factor operation but globally its capacity factor ranges from below 60% to above 90% with an average of 80%. Australia operates a similar steam turbine based technology in coal generation for which the average capacity factor over the last decade was 59% with a maximum of 89%.
The shape of the electricity load and competition from other sources is very different between countries and so our preference is to always use Australian data where it is available. Consequently, we apply the historical coal capacity factors when considering the potential future capacity factors of Australian nuclear generation.
Capital cost assumptions
While nuclear generation is well established globally, it has never been deployed in Australia.
Applying overseas costs to large-scale nuclear projects in Australia is not straightforward due to significant variations in labour costs, workforce expertise, governance and standards. As a result, the source country for large-scale nuclear data must be carefully selected.
GenCost estimates of the cost large-scale nuclear are based on South Korea’s successful continuous nuclear building program and adjusted for differences in Australian and South Korean deployment costs by investigating the ratio of new coal generation costs in each country.
The large-scale nuclear costs it reported could only be achieved if Australia commits to a continuous building program, following the construction of an initial higher-cost unit or units. Initial units of all first-of-a-kind technologies in Australia are expected to be impacted by higher costs. A first-of-a-kind cost premium of up to 100 per cent cannot be ruled out. These assumptions remain for the draft GenCost 2024-25 Report.
Life of the investment
GenCost recognises the difference between the period over which the capital cost is recovered (the economic life) and operational life of an asset.
GenCost assumes a 30-year economic life for large-scale nuclear plants, even though they can operate for a longer period. It is standard practice in private financing that the capital recovery period for an asset is less than its full operational life, similar to a car or house loan. For power stations, warranties expire and refurbishment costs may begin to fall around the 30-year mark. As a result, we use a 30-year lifespan in our cost calculations.
After the final GenCost 23-24 Report was released in May 2024, nuclear proponents clarified they will seek to achieve longer capital recovery periods, closer to the operational life, by using public financing to realise potential cost advantages.
The draft GenCost 2024-25 Report has calculated those cost advantages for the first time (using a 60-year period), finding that there are no unique cost advantages arising from nuclear technology’s long operational life. Similar cost savings are achievable from shorter-lived technologies, even accounting for the fact that shorter lived technologies need to be built twice. This is because shorter-lived technologies such as solar PV and wind are typically available at a lower cost over time, making the second build less costly.
The lack of an economic advantage for long-lived nuclear is due to substantial nuclear refurbishment costs to achieve long operational life safely. Without new investment it cannot achieve long operational life. Also, because of the long lead time in nuclear deployment, cost reductions in the second half of their operational life are not available until around 45 years into the future, significantly reducing their value to consumers compared to other options.
Current figures for Small Modular Reactors (SMRs)
The Carbon Free Power Project was a nuclear SMR project in the United States established in 2015 and planned for full operation by 2030. It was the first project to receive design certification from the Nuclear Regulatory Commission, an essential step before construction can commence. In November 2023, the project was cancelled following a 56 per cent increase in reported costs.
Despite being cancelled, this project was the first and currently remains the only project to have provided cost estimates for a real commercial venture with detailed data. Until now, most sources were for theoretical projects only.
"The main area of uncertainty with nuclear SMR has been around capital costs," Paul said.
"The Carbon Free Power Project provided more confidence about the capital costs of nuclear SMR and the data confirms it is currently a very high-cost technology."
"We don’t disagree with the principle of SMRs. They attempt to speed up the building process of nuclear plants using standardised components in a modular system and may achieve cost reductions over time. However, the lack of commercial deployment has meant that these potential savings are not yet verified or realised," Paul said.
Time is running out for the energy transition
Nuclear power has an empty development pipeline in Australia. Given the state and federal legal restrictions, this is not surprising.
But even if nuclear power was more economically feasible, its slow construction and its additional pre-construction steps, particularly around safety and security, limit its potential to play a serious role in reducing emissions within the required timeframe.
In the last five years, the global median construction time for nuclear has been 8.2 years. Furthermore, in the last ten years, no country with a similar level of democracy to Australia have been able to complete construction in less than 10 years. Overall, it will take at least 15 years before first nuclear generation could be achieved in Australia.
"The electricity sector is one of our largest sources of emissions and delaying the transition will make the cost of addressing climate change higher for all Australians," Paul said.
"The electricity sector must rapidly lead the transition to net zero, so other sectors like transport, building and manufacturing can adopt electrification and cut their emissions."
The final GenCost 2024-25 report will be released in the second quarter of 2025, after the close of final consultations on 11 February 2025. The Draft GenCost 2024-25 can be found at
https://www.csiro.au/en/research/technology-space/energy/GenCost
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