Why CSIRO Sees Nuclear Power as the Future: Costly Alternatives Can't Keep Up!

The federal science agency has defended its report asserting that establishing a nuclear energy sector would be costly and time-consuming, directly countering Peter Dutton's prominent energy strategy and addressing criticisms of its conclusions.

P24 News Media

December 08, 2024

1 minute

Why CSIRO Sees Nuclear Power as the Future: Costly Alternatives Can't Keep Up!

India

The scientific agency of the federal government has addressed criticisms regarding its findings on the feasibility of launching a nuclear energy sector, asserting that the endeavor would be prohibitively costly and time-consuming. This new report stands in stark contrast to the energy strategy proposed by Peter Dutton, the leader of the opposition.

The latest update from the Commonwealth Scientific and Industrial Research Organisation (CSIRO), which focuses on the costs associated with meeting Australia’s future energy demands, coincides with Mr. Dutton's anticipated release of the comprehensive financial breakdown of his nuclear proposal.

Mr. Dutton's vision entails the establishment of seven nuclear reactors throughout Australia, aiming to generate uninterrupted carbon-free electricity. These reactors are expected to commence operations between 2035 and 2037, contingent on the specific type of plant selected.

However, the CSIRO's preliminary GenCost report for 2024-25, developed in collaboration with the Australian Energy Market Operator, indicates that solar and wind energy—when coupled with appropriate firming and transmission solutions—represent the most economically viable option for new energy generation capabilities.

The analysis suggests that the first substantial nuclear reactor in Australia would be unlikely to produce electricity before 2040 at the earliest. The unit generation costs are estimated to range from $145 to $238, significantly surpassing the costs associated with firmed renewable energy sources. Moreover, the costs linked to small modular reactors (SMRs) are projected to be even higher, estimated at between $189 and $414 per megawatt-hour.

Even in the hypothetical scenario where a nuclear facility was constructed by 2030, the costs would still surpass the $80 to $122 per megawatt-hour associated with wind and solar energy combined with necessary firming and transmission connections. It is notable that Australia aims for renewable energy to account for 82 percent of the electricity supply by the close of the decade.

The initial capital investment required for nuclear energy projects is considerably greater, calculated at $8984 per kilowatt for large-scale nuclear, which translates to nearly $9 billion for a single gigawatt plant. In comparison, the costs for small modular reactors in 2024 are projected at $29,667 per kilowatt, with expectations of decreasing to between $15,000 and $17,000 per kilowatt by the 2040s. For offshore wind, the costs are estimated at $4710 per kilowatt, while onshore wind stands at $3223 per kilowatt, and large-scale solar at just $1463 per kilowatt.

Climate Change and Energy Minister Chris Bowen remarked on the report, stating, “The latest GenCost reinforces what our energy specialists have maintained for quite some time: the most cost-effective route for ensuring reliable energy in the future is through new renewable generation and storage, supported by gas and pumped hydro.”

In response, Mr. Dutton indicated that the Coalition's cost assessments would soon be disclosed and dismissed claims that nuclear energy would only meet 4 percent of Australia’s energy requirements under his proposed framework. “We will share more information regarding costs and how we plan to optimize the existing distribution network by increasing output from our seven coal-fired power plants using the latest nuclear technologies,” he expressed during an appearance on Sky News.

Australia is committed under the Paris Agreement to achieve a 43 percent reduction in carbon emissions from 2005 levels by the end of the decade. Recent figures released by Mr. Bowen suggest that the nation is on track to achieve a 42.6 percent reduction. Nonetheless, energy policy remains a crucial point of contention as the federal election approaches, which must occur by May 17 at the latest.

Addressing critiques regarding the lack of consideration for the extended operational lifespan of nuclear reactors in prior GenCost evaluations, CSIRO has determined that a longer operational life does not inherently offer a cost advantage for nuclear technology. The agency has traditionally estimated costs based on a 30-year operational life but has recently assessed longer durations.

Furthermore, CSIRO rejected the notion that its assumed capacity factor for reactors—ranging from 53 percent to 89 percent—was unduly low, contending that it should not be compared to the 93 percent average seen in U.S. reactors. “The global average capacity factor for nuclear energy generation is actually around 80 percent, with 10 percent of reactors operating at capacities below 60 percent,” the CSIRO stated in its draft report, which is set for finalization mid-next year following consultations.

Despite claims from the opposition’s energy spokesperson, Ted O’Brien, regarding the CSIRO's findings being based on inaccurate estimates of a reactor's operational duration, the agency found that nuclear achieved a 9 percent cost reduction due to its longevity. Paul Graham, CSIRO’s chief energy economist, pointed out that similar savings could also be realized with renewable sources, even when factoring in the need to replace original infrastructure.

The analysis highlights an approximate 20 percent decrease in capital costs for large-scale batteries over the past year, reversing prior increases. Costs for large-scale solar PV also saw an 8 percent decline, mirroring last year's reductions. However, onshore wind costs experienced a rise of 2 percent due to inflation, adding to an earlier 8 percent increase. Additionally, gas generation costs rose by 11 percent, reflecting previous increases of 14 percent and 13 percent over the two preceding years, with CSIRO attributing the rise to the necessity for new plants to incorporate hydrogen along with gas as fuel.