With cheap SMRs, we can’t afford not to go nuclear
Climate Change and Energy Minister Chris Bowen seems to be of this view. Perhaps he has been influenced by a report published by the CSIRO in July that concluded just that. While this institution deserves the highest respect for its work in science, regrettably its opinions on the economics of SMRs, which have the latest nuclear technology, are open to challenge.
Relying on the views of GHD, a subcontractor engaged by the CSIRO, the report states: “SMR nuclear typically costs 50 to 100 per cent more than large-scale nuclear.” It used the top of its estimated range in arriving at its cost estimate for SMRs. That contention is at odds with the findings of organisations that are actually involved in the nuclear industry.
The companies developing SMRs (including NuScale, Rolls-Royce and Hitachi) and the Minerals Council of Australia are unequivocal that SMRs in fact are cheaper than large-scale nuclear plants. As the World Nuclear Association points out, “SMR construction time and capital cost are considerably less than large-scale nuclear reactors.” That is largely due to SMRs being constructed in modular (or one design) form.
Perhaps the error, which results in such a significantly overstated cost estimate, can be partially explained by the fact this report is out of date. The GHD advice to the CSIRO was dated 2018 and was based on a report in 2015.
Somehow, the well-known tendency of technology to become cheaper as it benefits from economies of scale and the learning curve seems not to have been taken into account. Also, the report admits only one stakeholder in the nuclear field contributed a submission to the authors.
The MCA reports that, based on the figures from three of the most advanced SMR developers, even with conservative assumptions that include higher than anticipated construction costs, “SMRs could be Australia’s lowest cost 24/7 zero emission power source”.
This accords with the work done by Tony Irwin, a nuclear engineer who has run nuclear plants in Britain for 30 years. He concludes that, after appropriate adjustments for firming costs (back-up power when renewables don’t operate), and other factors such as the cost of new grids to support renewable energy sources, SMR capital costs are less than half those of wind and solar.
The issue of costs has not deterred the US, Canada, Britain and at least eight other countries from investing in SMRs. The International Energy Agency has listed more than 50 SMRs in development around the world. This would not be happening if the costs were too high. Indeed, so attractive are SMRs considered to be that the Canadian government invested $US20m ($29.7m) to assist in the licensing of a 195MWe SMR for its power grid.
Bill Gates sees the advantage of SMRs in providing a firming role to solar and wind when the sun doesn’t shine or the wind blow, and he has teamed up with Hitachi to build them.
The World Economic Forum predicts the global market for SMRs will be worth up to $US300bn a year by 2040.
Flawed contentions about costs should not be used as a justification to prevent Australia, the only G20 economy not to use nuclear energy, from enjoying its emissions-free benefits. At the very minimum, nuclear should be in the mix as an option.
For that to occur, the federal and state legislation prohibiting the use of nuclear power in Australia needs to be repealed. It should be the market that decides on whether the costs of SMRs justify the investment.
The Intergovernmental Panel on Climate Change says its temperature target cannot be reached without the contribution of nuclear power. Our government speaks of urgency in responding to the threat of climate change. Australia cannot afford more political delay in freeing up nuclear.
Tony Grey was founder and chief executive of Pancontinental Mining, which discovered the Jabiluka uranium orebody, and chairman of the Uranium Institute (now the World Nuclear Association).
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