Nuclear power would be the most expensive source of new energy for Australia, a report from the CSIRO and energy market regulator has estimated.
The report says electricity generated by solar and on-shore wind projects is the cheapest for Australia, even when accounting for the costs of keeping the power grid reliable while they’re integrated into the system in greater proportions over time.
The results can be found in the GenCost 2023-24 draft report, released on Thursday for consultation.
Paul Graham, CSIRO chief energy economist and lead author of the report, says the estimates of the costs of nuclear energy are significant, because they’re based on the actual experience of a nuclear energy project in the United States that was aborted last month.
The costs of different technologies
The GenCost report is published every year by the CSIRO and AEMO (the Australian Energy Market Operator).
It provides an annual update on the estimated costs of building new electricity generation and storage projects up to 2050.
It estimates the changing costs of electricity produced by coal, gas, solar, wind, nuclear, bioenergy, hydrogen electrolysers, and storage such as pumped hydro and batteries.
The draft report will be open for consultation until February 9, 2024, and the final 2023-24 report will be released in the second quarter of next year.
According to this draft report, variable renewables (such as solar PV and wind technologies) have the lowest cost range of any new-build technology in Australia, both now and in 2030.
The graph below shows estimated costs for 2023.
The most expensive power in 2023 would come from a theoretical small modular nuclear reactor (SMR), and the second-most expensive would come from a peaking plant run on hydrogen.
That point about nuclear energy is significant.
CSIRO’s scientists say until recently, discussions about the potential cost of using nuclear energy in Australia have remained theoretical, with a lack of data from completed commercial projects hindering attempts to make worthwhile calculations.
However, it says a recently-aborted attempt in the US to develop a nuclear SMR project provided valuable data on this question.
It says GenCost has been advised by stakeholders that SMRs are the appropriate size nuclear technology for Australia.
It says global inflationary pressures saw most technology capital costs increase by 20 per cent in 2022, but the costs for the nuclear SMR project in the US increased by roughly 70 per cent, which contributed to the project being cancelled in November this year.
It says that real-life cost data had not been included in previous GenCost reports, and as a consequence, current capital costs for nuclear SMR in this report have been “significantly increased” to bring them into line with the experience of that US project.
