Joint media release - Experts agree: Nuclear only getting more expensive, slower for Australia’s energy needs

Minister for Climate Change and Energy, the Hon Chris Bowen MP
Minister for Industry and Science, the Hon Ed Husic MP

The latest GenCost report has reaffirmed Australia’s adoption of firmed renewables is the most affordable way to modernise the energy grid, while the costs and time to build a nuclear reactor are rising.

GenCost, the annual collaboration between Australia’s world-renowned national science agency CSIRO and the Australian Energy Market Operator (AEMO) first commissioned under the Coalition, is used as a standardised measure by industry for forward planning and to assess the most economically viable investment opportunities.

CSIRO and AEMO have specifically considered the claims of the Liberal Party about the life of nuclear reactors and capacity factors. The claims that these two things make nuclear cheaper have been clearly and emphatically rejected.

Renewables remain the cheapest new-build electricity generation in Australia to 2050, both as standalone assets and when also accounting for the required storage, transmission and firming.

Gencost finds the first large-scale nuclear couldn’t be expected to produce electricity in Australia any earlier than 2040, with cost estimates from then ranging from $145 to $238/MWh.

Were small modular nuclear reactors able to be up and running in Australia by 2030, which they aren’t, the cost of their power would be up to $487MWh, not including what Gencost notes is now the possibility of a 100% ‘first of a kind’ premium.

It finds firmed renewables, including transmission and storage costs, provide Australians the cheapest power, at between $80MWh to $122MWh in 2030, when they account for 80 per cent of variable generation.

It shows the cost of renewable technologies have continued to decline despite a global inflationary environment. Large scale battery costs decreased 20 per cent and utility solar declined 8 per cent. The cost for onshore wind infrastructure is moderating.  Having risen 8 per cent last year, it’s eased, up just 2 per cent.

In this updated analysis, CSIRO responded to stakeholder requests to model the cost of nuclear reactors based on them having a longer financing and operational lifespan than what was used in the previous GenCost report, and a longer lifespan than wind and solar assets.

Their analysis shows that notwithstanding this, nuclear remains significantly more expensive than renewables, even if the renewables were rebuilt every 25 or 30 years.

Nuclear is assumed to be financed and operate for 60 years noting the oldest reactor still in operation is about 55 years old.

Gencost finds that “long operational life provides no major financial benefit to electricity customers”. This is because the cost of refurbishment to keep reactors running for 60 years is likely to be about a third of the initial construction costs, and ongoing operation and maintenance costs would also have an impact, noting the reactors would only be providing a small share of Australia’s total energy generation.

Gencost also addresses feedback that says the 2024 report’s assumption that nuclear reactors run between 53 per cent to 89 per cent of the time is too low, and should instead be 90 per cent. In assessing the impact of higher capacity factors on nuclear costs, Gencost concludes the impact would be “negligible”.

The draft report draws heavily from local and international data sources when examining nuclear construction timelines.

It finds mature democracies, such as Australia, face significant lead time for planning, financing, safety and other regulatory approvals, with an average construction timeline of between 17 and 21 years, putting first power from the Liberal’s nuclear plan well into the 2040s, consistent with evidence from other experts.

The draft report is open for consultation until 11 February 2025 with the final report due in the second quarter of 2025.

Quotes attributable to Minister for Climate Change and Energy Chris Bowen

“The former Coalition Government left Australians with a power system in need of urgent repair  – and too exposed to offshore price shocks. They ignored the experts and refused to take advantage of our abundant sun and wind, leaving households paying the price of having a grid that’s too reliant on expensive, unreliable, ageing coal.

“Now, under the guise of Peter Dutton’s nuclear scheme they continue to try and keep our energy grid in the dark, by promising to build the most expensive form of energy 20 years from now. It’s not fair to consumers and it’s not a serious solution to keep the lights on and bring prices down this year, or this decade.

“The latest GenCost confirms what our energy experts have been saying for a long time: the most affordable path to deliver reliable energy in future is with new renewable generation and storage, firmed by gas and pumped hydro.”

Quotes attributable to Minister for Industry and Science Ed Husic

“The facts are laid out very clearly in the GenCost report, and our government respects the work of CSIRO scientists and researchers and listens to that advice.

“Our Government’s renewable energy rollout is providing workers with well-paid secure jobs today. Peter Dutton’s nuclear fantasy not only threatens to blow out the budget, it also threatens jobs and household power bills.”