The latest GenCost report from Australia’s CSIRO raises doubts about the Coalition’s nuclear energy plans, showing that nuclear power would be significantly more expensive than renewables, even with longer reactor lifespans. The draft report indicates that nuclear plants could cost twice as much as solar or wind energy, despite their potential 60-year lifespan compared to 30 years for renewables. Chief Energy Economist Paul Graham noted that similar cost savings could be achieved with shorter-lived technologies like renewables, even when factoring in the need to build them twice.
Opposition leader Peter Dutton, who has faced criticism for not disclosing detailed costings of the plan, is expected to provide more information on the proposal later this week. Dutton has pledged to construct seven nuclear energy plants across Australia if elected.
The draft report found that nuclear plants would cost at least $8.6 billion to build and take over 20 years to complete. The construction timeline for large-scale nuclear plants has been steadily increasing globally, with median construction times rising from six years to 8.2 years over the past five years. As a result, the report estimates that developing nuclear power in Australia could take at least 15 years to establish fully.
While nuclear reactors may have long operational lives, the report argues that the financial benefits of extended lifespans are minimal. Refurbishing reactors to extend their lifespan could cost up to a third of initial construction costs, adding further financial strain. Increasing the capacity factor for nuclear reactors would also have little impact on the overall cost of nuclear power.
The GenCost report highlights that renewable energy, particularly solar and wind, remains the most affordable new-build electricity generation option in Australia. Even with the costs of transmission lines and storage solutions, renewables are projected to be significantly cheaper than nuclear power. In contrast, large-scale nuclear plants in Australia are not expected to generate electricity until at least 2040, with estimated costs ranging from $145/MWh to $238/MWh.
Following the release of the report, Energy Minister Chris Bowen reaffirmed the government’s commitment to renewable energy, emphasizing that renewables backed by storage solutions are the most reliable and cost-effective path for Australia’s future energy needs. Minister for Industry and Science Ed Husic criticized the Coalition’s nuclear proposal, stating that it could lead to increased costs and job losses.
Despite government pressure to address cost concerns, Dutton argued that the Coalition’s nuclear plan would cost less than the Albanese government’s energy transition scheme. He emphasized the need for a balanced energy mix with renewables and stable baseload power to support the economy.
The report’s findings align with similar claims made by the Climate Council and the Institute for Energy Economics and Financial Analysis, highlighting the high costs and lengthy build times associated with nuclear power compared to renewables.
Postponing action on our aging energy system could lead to failure without the necessary investment and support.”
Greg Bourne, a Climate Councillor, expressed skepticism towards Dutton’s nuclear plan, stating that it would only address a small fraction of Australia’s energy requirements by 2050 and does not resonate with the general public.
“While nuclear energy remains at a standstill for at least another decade, renewable sources already contribute 40% of electricity in our primary national grid, with projections to reach over 96% by the time Dutton’s proposed reactors come online.
He further emphasized that Dutton and his associates would likely be retired by the time a single nuclear power plant is operational.
Criticism Grows Over GenCost Methodology
However, the reliability of the GenCost report has been questioned by various experts in the field.
Following the release of the latest report in May, Scott Hargreaves, the Executive Director of the Institute of Public Affairs, criticized the reliance on the flawed levelized cost of electricity method in calculating energy system expenses, misleading both Australians and policymakers about the true costs of the energy landscape.
Similarly, Bruce Mountain, the Director of the Victoria Energy Policy Centre, highlighted the complexities involved in comparing the costs of different energy sources like wind, solar, nuclear, hydro, and coal, which are influenced by a multitude of factors, known and unknown.
He emphasized the importance of understanding these variables and their interactions rather than providing inaccurate certainty.
Mountain cautioned that “Our energy market operator and chief scientific agency have positioned themselves to offer definitive, objective answers to questions that are inherently uncertain. CSIRO is attempting the impossible by claiming absolute knowledge of how specific power plants’ economics stack up.”
