Hidden costs? Cheaper energy? ‘Farcical’ locations? Debunking the hype around nuclear

Tyler Mitchell By Tyler Mitchell Jun30,2024
Australians are being promised a brighter future with nuclear as the answer to rising energy costs.
As concerns grow over the cost of living and rollout of renewables, the Coalition has announced an alternative vision, promising to if elected.
Last week, it confirmed at Tarong and Callide in Queensland, Liddell and Mount Piper in NSW, Port Augusta in South Australia, Loy Yang in Victoria and Muja in Western Australia.
“We have a vision for our country: to deliver cleaner electricity, cheaper electricity and consistent electricity,” Opposition leader Peter Dutton said on 19 June.

But can nuclear in Australia live up to the hype?

Can nuclear bring down electricity prices?

One of the biggest claims the Coalition makes is that in Australia.
Dutton told the Today show on 21 June: “In Ontario, for example — they have 60 per cent nuclear in the mix there, their electricity prices are a quarter of what it is here in Australia”.

But Tim Buckley, director of think tank Climate Energy Finance, questioned how a form of energy that would produce “zero” electricity for the next 15 to 20 years, could bring down power prices.

In the meantime, the Coalition’s plan would undermine investor confidence so Australia didn’t get as much electricity supply from other sources, Buckley said.

“Less supply means higher prices — that’s economics 101.”

He believes the Coalition’s nuclear strategy could increase electricity prices by 20-50 per cent over the next decade because of the need for more government intervention and funding to extend the life of coal plants.

Less supply means higher prices — that’s economics 101.

Tim Buckley, Climate Energy Finance director

Buckley said the GenCost report — produced by Australia’s national science agency, the CSIRO — found power from nuclear could also be double the price of firmed renewables.
“Therefore power prices go up, not down,” he said.
GenCost looked at the levelised cost of electricity, which is the estimated price that would need to be charged so the generator could cover its costs including a return on investment.
It found electricity generated by large-scale nuclear would be $155/MWh (per megawatt hour) to $252/MWh.

Integrating renewables such as solar photovoltaic (PV) and wind into the grid, including the cost of storage and transmission lines, was estimated to be much cheaper, costing between $90/MWh and $100/MWh.

A bar chart showing the average cost for different energy products from coal, wind to nuclear, both in 2023 and 2030.

Source: SBS News

The GenCost report noted overseas electricity costs may not reflect the prices that could be charged in Australia because of differences in installation, maintenance and fuel costs.

Other countries may also be benefiting from older projects where the costs to build the power plant had already been recovered by investors or governments.

“Such prices are not available to countries that do not have existing nuclear generation such as Australia,” the report said.

Batteries will need to be ‘ripped down’ for nuclear

The Coalition plans to locate its nuclear power plants in the locations of old and retiring coal-fired power plants to “avoid much of the new spending needed for Labor’s ‘renewables-only’ system”.
An electricity grid with a large proportion of intermittent renewables requires many new transmission poles and wires, “all of which will be passed on in the form of higher bills”, Opposition energy spokesperson Ted O’Brien has said.
But Buckley points out that most retired coal-fired power sites are already being used for new battery plants. This includes a 500-megawatt battery plant announced last year on the site of the old Liddell plant in NSW’s Hunter Valley.
“Ted O’Brien and Peter Dutton are proposing nationalisation of private assets, and then they’re going to have to rip down the batteries that have just been built at billions of dollars in cost … in order to then wait for 20 years while they build their nuclear power plants,” he said.

“It’s a little bit farcical to me.”

A power station as seen from the other side of a large body of water.

A large battery facility has already been announced for the site of the former Liddell coal-fired power station in NSW’s Hunter Valley.

An ambitious 13-year timeline

In a press release announcing its policy, O’Brien said large-scale nuclear would be built by 2037, in 13 years.
But the CSIRO has estimated a nuclear power plant in Australia would take at least 15 years to build.
Australia’s federal nuclear ban would have to be overturned and .
Site selection and acquisition, design, impact studies and environmental permits would then need to be completed before construction could even begin.

Buckley said getting the relevant planning approvals was a time-consuming hurdle for any energy project, let alone one that had never been done in Australia before.

Nuclear ‘will need to be refurbished after 30 years’

Dutton has said nuclear is “an investment for 80 years” and this longevity makes the technology superior to renewable sources of power such as wind energy.
“These nuclear plants can produce and provide 24/7 power for 80 to 100 years … wind turbines last 19 years, so you’ve got to cycle them in and out three or four times,” he told the Today show on 21 June.

Buckley said Coalition statements underestimated the life of renewable projects, noting that nuclear power plants needed to be refurbished after around 30 years.

A man in a hard hat walks next to some steel equipment

The Darlington Nuclear Power Plant in Ontario, Canada, is undergoing a decade-long refit of its four reactors. Source: Getty / Steve Russell / Toronto Star

Warranties on new solar modules now covered them for more than 20 years, he said. And those on batteries had doubled from 10 to 20 years.

“Most solar projects have a design life of 25 years, wind projects have a design life of 30,” he said.
Buckley said the price of refurbishment should also be included in the capital costs for nuclear, and so should decommissioning expenses, which can cost about $10 billion once the plant reaches the end of its life.

The refurbishment of the Darlington plant in the Canadian province of Ontario began 26 years after it began service in 1990. It will take around 10 years and cost an estimated $CAD12.8 billion ($14 billion), to enable the plant to operate for another 30 years.

‘Who’s going to pay for other costs?’

Eventually, funding will also have to be found to store the nuclear waste generated, which has to be securely stored for tens of thousands of years.
“Who’s going to pay for 10,000 years of nuclear waste disposal?” Buckley said.

Even based purely on the initial construction cost, nuclear does not come out ahead.

Who’s going to pay for 10,000 years of nuclear waste disposal?

Tim Buckley, Climate Energy Finance director

The GenCost report estimated the cost of a large-scale nuclear plant in Australia would be $8.6 million for a 1,000kW plant built in 2023, although the first one would likely be much more expensive.
A small modular reactor (SMR) was estimated to be even more expensive, at $28.6 million.
In comparison, onshore wind is estimated to cost $3 million for 1000kW of generation, while large-scale solar PV is even cheaper, at $1.5 million.

Costs for offshore wind rise to between $5.5 million and $7.7 million.

A bald man in a suit wearing glasses.

Peter Dutton has not yet released information on how much the Coalition’s plan to build seven nuclear reactors would cost. Source: AAP / Bianca De Marchi

The capital cost for firming technologies such as batteries is separate, but — as mentioned above — the levelised cost of renewables is estimated to be $90-$100/MWh, even including the cost of storage and transmission lines.

Meanwhile, the levelised cost of nuclear is between $155-$252/MWh.
The Coalition hasn’t yet released costings for its nuclear plan, only saying they would come “very soon”.
Analysis from the Smart Energy Council suggests it could cost between $116-$600 billion to build seven nuclear reactors, and they would only supply 3.7 per cent of Australia’s energy mix in 2050.
Michael Preuss, director of research infrastructure at Monash University’s faculty of engineering, that while the initial investment in nuclear is expensive, those upfront costs could be recovered.
“There’s a huge upfront investment and once they’re built and they start operating, they’re relatively inexpensive to operate and then you recoup the investment. But it takes a long time,” he said.

There will also be ongoing costs to buy the fuel required to run the nuclear power plant, something renewables can source for free.

Australian communities facing an un-insurable risk?

The Coalition has dismissed concerns about government funding of the plants, saying local communities would welcome the investment.
“You can imagine what this means to local communities, to mums and dads and their kids as they look to the future,” O’Brien told reporters on 19 June.

But Buckley said government funding was required because nuclear power plants were not commercially viable without taxpayer subsidies.

He said no private company could afford the insurance risk of a nuclear catastrophe.

The estimated cost of dealing with the meltdown of the Fukushima power plant, after a tsunami hit Japan’s northeastern coast in 2011, has already cost $US150 billion ($226 billion).

Someone dressed in protective gear takes a photo next to a green panel of switches

The central operating control room of the No. 1 and No. 2 reactors at the crippled Fukushima Daiichi power plant nearly three years after the plant was paralysed by the 11 March earthquake and tsunami in 2011. Source: Getty / Koji Sasahara / Pool / AFP

Taxpayers have had to cover costs for cleanup, decontamination and compensation, and it will likely take decades for the operator of the plant, the Tokyo Electric Power Company (TEPCO), to pay back the debt. Without this government help, the company would likely have gone bankrupt.

“No private company can take a $US150 billion hit, they just can’t get the financing to do it,” Buckley said.

Is the world embracing nuclear?

Dutton told Today on 21 June: “I think if you look at the top 20 economies of the world, Australia is the only one that hasn’t embraced or hasn’t signed up to nuclear.”
But Buckley believes this statement is misleading.
“America has closed more nuclear units in the last two decades than they’ve opened so how is that embracing nuclear?”

The World Nuclear Association notes that no reactors are under construction in the United States, and some previous projects had been cancelled due to low gas prices making them uneconomical.

Almost all of America’s capacity is from reactors built between 1967 and 1990. There are currently 94 reactors in operation and 41 have been shut down over the years.
The most recent new nuclear capacity came online a couple of years ago when two new units at the Vogtle power plant began operation after almost 10 years of construction and at double the original cost estimate of $US14 billion ($21 billion).
Buckley also pointed to India, which has opened one new nuclear facility in the past five years but which he says is building 15-20 times as much renewable energy.

India is building a massive renewable energy park that will span an area almost the size of New York City and generate 30 gigawatts of wind and solar power when it’s complete in 2027.

Solar panels are seen on the roof of residential buildings

Solar panels are seen on the roofs of residential buildings in Ahmedabad in India. Source: Getty / SOPA Images/LightRocket via Gett

While there are seven new nuclear reactors under construction in India, the 23 reactors already in operation only produce about 3 per cent of its energy, according to the World Nuclear Association.

Germany has also shut down all 36 of its reactors and does not have any under construction.
Buckley said nuclear reactors built in the United Arab Emirates using massive government subsidies were “not a credible example for Australia to follow”.

While Buckley acknowledged nuclear could eventually be feasible in Australia, he believes it needs to be proven in other markets first and to come down in price.

“Let’s evaluate it when the technology does slightly what the proponents say it does,” he said. “I wouldn’t say ‘no’ forever, I would say ‘no’ in the next 20 years.”
He said other countries that had embraced nuclear did not have the wind and solar resources that Australia did.
“Why would Australia go and choose the most expensive source of electricity with massive water consumption issues, with massive site rehabilitation and massive waste disposal risks, when we don’t need to?

“When there’s a lower cost, commercially proven technology today?”

Tyler Mitchell

By Tyler Mitchell

Tyler is a renowned journalist with years of experience covering a wide range of topics including politics, entertainment, and technology. His insightful analysis and compelling storytelling have made him a trusted source for breaking news and expert commentary.

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