benchmark report adds cost of reactors

In an Australian first, large-scale nuclear reactors have been added to official calculations of electricity generation costs to inform long-term decisions about what to build.

Updated economic modeling released on Wednesday found that renewable energy – including costs associated with transmission and big batteries to support it – remains the lowest-cost, new-build technology.

Prepared by the national science agency CSIRO and the Australian Energy Market Operator, the latest edition of the GenCost benchmark report comes as the coalition vows to add nuclear power to the nation’s grid.

However, it could take until 2040 at the earliest to build a single plant, as nuclear power has extra safety and security hurdles, no investors circulating, and laws banning it would need to be repealed.

GenCost also warned of a massive “first of a kind” premium when starting from scratch to build a reactor, which would likely double the cost of going nuclear.

Further, large-scale nuclear units are typically 1000 to 1400 megawatts, which means the wider network would have to build in a large reserve to cover any outages – at a time when there are no coal plants in operation.

But, in theory, so long as that reserve is built there would be no technical barriers for nuclear reactors in Australia, the report found.

CSIRO’s chief energy economist and GenCost lead author Paul Graham said the modeling provided a “logical, transparent and policy-neutral” method of costing nuclear’s potential implementation in Australia.

But the costs estimated in the report can only be achieved if Australia commits to a continuous nuclear building program, he warned.

Small modular nuclear reactors (SMRs) – potentially suited to worksites far from the national grid – remain prohibitively expensive and would not be available until the 2030s.

The new-build cost of solar and wind overlaps with the lower end of the cost range for coal and gas generation, but these high-emission technologies are not consistent with Australia’s existing climate change policies.

Excluding high-emission generation options, the next most competitive were solar thermal, gas with carbon capture and storage, large-scale nuclear and coal with carbon capture and storage.

One year on from energy technology costs jumping 20 per cent on average, inflationary pressures have eased but the results are mixed as each is grappling with different supply chains.

Onshore wind generation technology has increased by a further eight per cent, solar farms cost eight per cent less, and gas turbine costs are up 14 per cent.

Wind has suffered the largest increase in costs and has been the slowest to recover from global inflationary pressures associated with the pandemic.

Onshore and offshore wind costs are expected to take longer to fall than rival sources.