Nuclear power is unlikely to be cost competitive with other energy generation technologies throughout Australia even after the longer lifespan of nuclear power plants relative to renewables is considered, a new report from the nation’s leading science agency says.

And the estimated delivery lead time of new large-scale nuclear power plants remains likely to be at least fifteen years notwithstanding arguments by some nuclear proponents that lead times will be shorter.

The CSIRO has released the draft version of is 2024/25 GenCost report.

The report provides an estimate of the costs which are associated with various energy generation technologies based on the levelised cost of energy (LCOE). This takes into account all costs which are needed over the life of generation assets, including the need to make a return on investment.

As with the previous years’ report, the latest report has found that renewable energy remains the cheapest form of energy generation throughout Australia (see chart).

This is the case even after allowing for costs which are associated with the need to ‘firm’ intermittent renewable energy generation. These costs include storage from batteries or pumped hydro, additional transmission which is needed to connect new renewable generation assets to the grid and system security and spilled energy.

Renewables are also likely to remain the cheapest form of energy generation between now and 2030 (see chart).

Turning to nuclear, the latest report has again found that that large scale nuclear reactors are one of the most expensive forms of energy generation. Meanwhile, small modular reactors are by far more expensive than any other energy generation source (see report).

In its report, the CSIRO responded to criticisms regarding previous reports from nuclear energy advocates.

First, the agency has calculated the effect of potential cost advantages that may be associated with the longer lifespan of nuclear as opposed to solar and wind. (Nuclear plants generally last for around 60 years, around twice that of solar farms. This means that renewable technologies will need to be rebuilt twice over to generate the same lifespan as nuclear plants.)

However, the CSIRO found that this did not create any meaningful cost advantage in favour of nuclear.

These is the case as:

• Substantial upgrade and refurbishment costs will be needed in order to maintain nuclear plants over their longer operational life.
• The cost of renewables is continuing to fall on account of ongoing technological improvements. This means that future costs of rebuilding renewables are likely to be lower compared with current costs.
• The long lead time which is associated with nuclear deployment (approx. 15 years) mean that any cost advantages which are associated with longer lifespans are unlikely to accrue until at least 45 years from the commencement of nuclear development (the fifteen-year lead time plus the 30 years of operational life that would be expected from shorter lived technologies such as renewables). This significantly reduces the value of longer life cost benefits in present value terms compared with technologies which have shorter development lead times.

Meanwhile, the CSIRO has also responded to claims that its previous estimate of fifteen-year lead times for large-scale nuclear reactors was too cautious.

On this score, advocates of nuclear technology point to 2015 estimates by the International Atomic Energy Agency (IAEA). Under these estimates, the IAEA projects an expected timeframe of 10-15 years for development and construction of nuclear energy facilities when nations are developing such facilities for the first time.

In its report, however, the CSIRO argued that expectations of lead times of at least fifteen years are the most plausible.

For one thing, it says that median construction timeframes for nuclear have increase from 6 years when the IAEA made its estimate in 2015 to 8.2 years currently.

As a result, the organisation’s 10-15 year range estimate should be adjusted to 12 to 17 years if considered with today’s construction timeframes.

Beyond that, Australia’s robust democratic and consultation processes mean that our lead times for first-time nuclear deployment are likely to be at the lengthier end of this range.

The latest report comes amid debate over Australia’s energy future as the nation seeks to respond to climate change as well as the need to replace aging coal-fired power plants.

The current Labour Government is focusing its strategy on renewable energy generation supported by storage technologies (batteries and pumped hydro), additional transmission to connect new renewable assets to the grid, and gas to continue to provide reliable power over the medium term.

It aims to have renewables account for 82 percent of overall electricity generation nationally by 2030.

The Opposition, however, plans to construct seven taxpayer-funded nuclear power plants on sites of former coal-fired power stations.

Opposition Leader Peter Dutton has consistently argued that his party’s nuclear plan would be cheaper compared with renewables once the added costs of storage and transmission are included.

Thus far, however, the Opposition has failed to release any costings for its nuclear plan.

Further details including costings are expected to be released this week.

Solar, Battery Costs Continue to Fall

In terms of cost movements, the report shows that costs associated with solar PV and batteries continue to fall.

In particular, it shows that:

• After falling by 8 percent in 2023/24, capital costs associated with large-scale solar PV are expected to fall by a further 8 percent in the current financial year.
• Large-scale battery costs are expected to fall by 20 percent this year
• Costs associated with gas continue to rise as gas operators are building their facilities to be ready to accommodate hydrogen.
• Onshore wind costs continue to increase, but at a rate that has moderated since the pandemic.

Opposition Leader Peter Dutton slammed the report, accusing the current Labor Government of influencing the report.

“It just looks to me like there is a heavy hand of (Minister for Climate Change and Energy) Chris Bowen in all of this,” Dutton told reporters on Monday.

Bowen denies that accusation.

“This is an independent report,” he said.

“Yet again, the evidence is in … Whenever the Coalition’s claims are put to the test, they crumble.”

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