US energy report paints nuclear into the big picture

New US government research into nuclear energy presents another warning that Australia risks missing out if we persist with laws that ban consideration of a technology enjoying a global reappraisal. As the US Department of Energy report makes clear, the issue is not an “either or” proposition between renewables and nuclear. And the opportunity is not limited to potential large cost savings of putting a portion of nuclear into the grid. A surge in demand for clean electricity to underpin the rapidly evolving artificial intelligence industry provides a potential new pathway to commercialisation for nuclear. Big tech is in a scramble for emissions-free power globally. As The Wall Street Journal reports, tech companies scouring the US for electricity increasingly are being told the nation’s high-voltage electric wires are running out of room. In some places they are being told they will have to wait for a decade or more to get grid access. The WSJ reports the scramble to build AI data centres that require massive amounts of energy is up-ending the industry’s climate pledges and spurring it to find new sources of clean energy. This includes nuclear. Microsoft has agreed to underwrite the reopening of the Three Mile Island nuclear plant.

The Biden administration has offered big tax incentives to reopen other nuclear sites and build new ones. The DOE report, Pathways to Commercial Liftoff: Advanced Nuclear, is another demonstration of where the US government is heading. It finds that US domestic nuclear capacity has the potential to scale from ~100GW in 2023 to ~300GW by 2050 – driven by deployment of advanced nuclear technologies. These include new-generation large-scale plants, small modular reactors and micro reactors. The DOE says nuclear energy generates carbon-free electricity, provides firm power that complements renewables, has low land-use requirements, and has lower transmission requirements than distributed or site-constrained generation sources.

It also offers significant regional economic benefits and has a wide variety of uses beyond the grid, including desalination, hydrogen production and process heat for industry to replace gas, something renewables cannot do.

It sounds a lot like Peter Dutton’s pitch for nuclear at home. The US report does not shy from the current high costs and lack of first-time buyers, but in a head-to-head contest on cost with fully firmed renewables and gas with carbon capture and storage, nuclear comes out as the second-cheapest option behind gas on the basis of levelised cost of electricity (LCOE). This is true both for first-of-a-kind projects and ninth-of-a-kind, when the various technologies move down the cost curve to maturity. The benefits of nuclear, according to the US report, go beyond the LCOE measure because it can provide other system-wide benefits. The US report published modelling for two decarbonisation scenarios in California, which showed nuclear with variable renewables and storage reduced total system costs from $129-$150 per MWh (renewables and storage only) to $80-$94 per MWh (renewables and storage with nuclear). The DOE report concluded that advanced nuclear can play a critical role in strengthening energy security, reliability and affordability while generating high-quality, high-paying jobs and facilitating an equitable energy transition. It said industry, investors, government and the broader stakeholder ecosystem each had a role to play in ensuring advanced nuclear achieves commercial lift-off and rises to meet the challenge in time.

Energy Minister Chris Bowen was quick to dismiss the report, declaring “renewables are cheaper than nuclear every time”. But as the US report makes clear, he is not looking at the big picture.