By Mike Foley and Nick Toscano
A large scale nuclear reactor would cost $16 billion and take nearly two decades to build, according to CSIRO’s latest energy cost report card, calling into question the federal opposition’s plan to develop the controversial power source as part of Australia’s future energy mix.
The final report by the government’s chief scientific research arm and Australia’s energy market regulator AEMO on Australia’s future electricity costs found a nuclear plant could not be operational before 2040, which means the technology could not be used to help meet Australia’s international climate change commitments which requires it to cut emissions 43 per cent by 2030.
CSIRO said renewables deliver the cheapest electricity and a nuclear plant would cost up to $16 billion to build. Credit: Bloomberg
In a sign of how politically heated the energy debate has become, the final version of the 2024 GenCost report – which is produced every year for investors – factored in both the cost of large-scale reactors and the cost of transmission lines for renewables.
An earlier December draft attracted controversy for finding that small modular reactors would be far more expensive than renewables or coal and gas.
The opposition has said it would build seven nuclear reactors in Australia if it were elected at next year’s federal election, although Opposition Leader Peter Dutton has yet to offer a detailed policy including costings and sites for the reactors.
Dutton said on Tuesday that nuclear energy is “cheaper, it’s more reliable, it’s zero emissions”.
“That’s why if you look at the top 20 economies in the world, Australia is the only one, at the moment, that hasn’t got nuclear power or hasn’t signed up to it,” Dutton said.
CSIRO’s chief executive Doug Hilton in March defended his agency’s earlier draft findings of this year’s report on the costs of nuclear power against an attack from Dutton, who claimed the work was discredited and questioned its integrity.
“It’s not relied on. It’s not a genuine piece of work. It doesn’t take into account some of the transmission costs, the costs around subsidies for the renewable,” Dutton said in March. “I would look at the independent, verifiable evidence.”
His criticisms prompted Hilton to write an open letter defending the integrity and neutrality of the report, which comes out every year and is aimed at investors.
“The GenCost report can be trusted by all our elected representatives, irrespective of whether they are advocating for electricity generation by renewables, coal, gas or nuclear energy,” Hilton said.
Responding to criticisms of previous reports, CSIRO included in the cost of renewables a bill for $40 billion worth of transmission lines – needed to link all the new solar and wind farms to population centres – as well as batteries and pumped hydro to back up power supplies when the wind isn’t blowing and the sun isn’t shining.
But even including this cost, renewables came out far cheaper than investing in several nuclear plants. The report noted that the cost of plugging nuclear into the grid remained unknown.
GenCost uses the metric known as “the levelised cost” of electricity. This is how much it costs for a power plant to generate electricity, including capital expenditure as well as the revenue required to create a return on investment.
To calculate the cost of building a nuclear reactor in Australia, CSIRO looked to countries where nuclear power is established, and selected South Korea to deliver what it said was a conservative estimate.
The final $16 billion figure was extrapolated using as a rule of thumb the fact that a modern coal plant costs on average 2.8 times more to build in Australia than in South Korea, the closest comparable economy that uses nuclear power.
CSIRO said based on this costing, a 1 gigawatt nuclear reactor, which is small compared to global standards, would cost at least $8.6 billion to build in Australia, but the report said that the first reactor to be built under any such scheme would likely cost double because of the expense of kickstarting the industry from scratch.
Citing the recent cost blow out of the Snowy 2.0 pumped hydro project, which rose from $6 billion to $12 billion in 2023, “premiums of up to 100 per cent cannot be ruled out”, the report said.
CSIRO calculates costs of $8 billion per reactor would only be achieved after at least five and possibly 10 reactors are built because these efficiencies are “only achievable for a steady, continuous building program”.
The report also estimates the cost of electricity now and into the future, considering efficiency gains that will lower the costs of technologies.
It said the cheapest electricity will come from a grid drawing 90 per cent of its power from renewables, which would supply electricity for a cost between $89 and $128 per megawatt hour by 2030.
A large scale nuclear reactor would supply power for $136 to $226 per megawatt hour by 2040
Small modular reactors, a nascent technology not yet in commercial use but favoured by the opposition, are even more expensive – between $171 to $366 per megawatt hour by 2040.
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