Nuclear energy is unlikely to be cost effective as a clean energy solution in Australia despite being suitable in some overseas locations, science and energy experts say
In its latest explainer on the state of low emissions technology in Australia released last month, the Academy of Technology and Engineering (ATSE) indicated that a range of technologies are likely to play a role in Australia’s transition to NetZero electricity by 2050.
Whilst these includes renewables, storage and grid technologies, however, nuclear power was not included.
Asked about this by Sourceable, panellists at the report’s launch indicated that nuclear has a role in many overseas markets but is unlikely to be cost competitive in Australia.
“I think nuclear should be discussed and certainly overseas, it should be much more a part of the solution,” said Georg Maltabarow, FAICD HonFIEAus FTSE and the former head of Australia’s biggest energy distribution network Ausgrid.
“(However,) My own view is that in Australia, because we are blessed with the world’s best wind and solar resources, I don’t think that nuclear will ever compete.
“I’m not saying that nuclear is not an appropriate decarbonisation technology. I simply can’t see it being competitive in the Australian context.”
Professor Lauchlan Blackhall FTSE, head of the battery storage and grid integration program at Australia National University, agrees.
Blackhall says the CostGen report prepared each year by the CSIRO has consistently demonstrated that nuclear technology will be more costly compared with other technologies as laid out in the Australian Energy Market Operator’s (AEMO) most recent Integrated System Plan published in June which provides a roadmap for the efficient development of the electricity market over the next twenty years.
“In the Australian context, nuclear will be sufficiently more expensive than the roadmap laid out in the ISP which is largely that our future will be powered by renewables and storage,” Blackhall said.
The latest comments come as the nuclear energy industry attempts to position nuclear technology as an important part of producing clean and reliable energy.
Worldwide, nuclear accounts for around ten percent of the world’s electricity and is the second largest source of clean energy behind hydro according to the World Nuclear Association.
There are currently 437 nuclear plants operating across 32 countries whilst a further 55 are under construction in fifteen countries.
That said, the pace of nuclear reactor construction has slowed since the mid-1980s.
A core advantage of nuclear is its delivery of clean and reliable baseload power.
Unlike traditional fossil fuel generation, nuclear energy plants do not produce carbon dioxide or any other pollutant during operation (although the process of mining, refining and preparing uranium does use energy).
Unlike intermittent wind and solar, meanwhile, nuclear delivers constant production and thus delivers a reliable energy source.
Finally, nuclear power plants also take up much less land and space compared with large-scale wind and solar. Compared with these renewables, nuclear thus delivers a smaller land-use footprint.
On the flip side, however, nuclear involves large up-front construction costs due to the complexity of the plants and the many levels of safety which need to be constructed around them.
Arguably even more importantly, nuclear energy involves the need to store nuclear waste and carries the potential for catastrophic consequences in the event of accidents or hostile activity.
In recent years, there has been excitement about the potential of small modular nuclear reactors.
These are advanced reactors which can produce around a third of the generating capacity of traditional nuclear power reactors but are a fraction of the size of a conventional nuclear plant.
This smaller footprint enables rollout at locations which are not suitable for large nuclear power plants.
Meanwhile, the modular nature of these plants means that their components can be prefabricated and manufactured offsite before being transported for on-site installation.
This will make cheaper to build compared with their larger counterparts which often need to be custom designed for a particular location.
Meanwhile, the designs of the smaller reactors are simpler and are considered to be safer compared with their larger counterparts (refer link above).
Small reactors are a new technology and a number of private and public institutions overseas are trying to bring the technology to fruition during this current decade.
In Russia, one floating nuclear power plant which produces energy from two 35 MW(e) reactors began commercial operation in 2020.
Several other small reactors are under construction or in approval throughout Argentina, Canada, China, Russia, South Korea and the United States of America.
Despite their lower upfront capital cost, however, the overall economic competitiveness of these smaller reactors remains yet to be proven.
In Australia, there have been calls to consider nuclear power as a clean and reliable energy source from some on the conservative site of politics.
Earlier this month, for example, former Nationals leader Barnaby Joyce called on the Labor Government to adopt nuclear power as an alternative to renewable energy.
Thus far, however, the technology has failed to gain traction and Australia does not generate any nuclear energy.
In addition to safety concerns, an abundance of solar and wind means that nuclear is struggling with cost competitiveness in the Australian market.
In a recent GenCost report covering 2019/20, the CSIRO estimated that the capital cost of producing nuclear power through smaller modular reactors would equate to more than $16,000 per kilowatt hour.
This was around eight times the cost for solar and wind and four times the cost of gas even with carbon capture and storage (see chart)
(Note that the CSIRO did not include a current cost estimate for nuclear in either the 2020/21 version or the latest 2021/22 version of the report which was released last month.)
Capital cost of generation for various energy sources
Accordingly, even some supporters of nuclear in Australia acknowledge that momentum is with renewables and storage.
Speaking on Sky News, Australian Workers Union National Secretary Daniel Walton said that the nuclear industry had enormous potential to provide baseload power but acknowledged that the technology was struggling to find a competitive solution in Australia as momentum in the clean energy race was leaning heavily toward hydrogen and renewables.
Speaking of the small modular reactors referred to above, Professor Renate Egan FTSE, interim CEO of NSW Energy Institute and UNSW lead of Australian Centre for Advanced Photovoltaics, acknowledged that these may provide a solution at some point in the future.
However, she stresses that they are not a ‘here and now’ technology and were thus not something which Australia could role out over the next five or ten years.
“There is a lot of conversation about small reactors as a technology solution,” Egan said.
“The topic today (at the launch of the aforementioned report) is what we can do today and to address what we can do over the next five or ten years.
“The small modular reactors are still a technology under development. They have not yet been proven to be cost effective.
“It may well be that they may have a place in the future. And most likely in other nations.
“But right now, they are not a ‘here and now technology’”.
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