| June 22, 2024

Nuclear Fallout: $116-$600 billion to build 7 nuclear reactors

Detailed analysis by the Smart Energy Council reveals the cost of building the seven nuclear reactors proposed by the Federal Opposition will be between $116-$600 billion of taxpayers’ dollars, whilst only providing 3.7% of Australia’s energy mix in 2050.

Using data from CSIRO’s latest GenCost report and the Australian Energy Market Operator’s (AEMO) Integrated System Plan, the cost of building 7 nuclear reactors is at least $116 billion.

This is the same cost as delivering 82% renewables by 2030, and an almost 100% renewable energy mix by 2050, including the cost of building all of the enabling transmission infrastructure.

If you factor in the lived experience in the UK and elsewhere of cost and timeframe blowouts and you include the additional costs of extending and refurbishing coal-fired power stations and “throwing buckets of money” at State Governments, as Peter Dutton has committed, the Opposition’s nuclear proposals could cost a staggering $600 billion.

AEMO’s Integrated System Plan costed the total expenditure required to fund all generation, storage, firming and transmission infrastructure in the Optimal Development Path, and found that it has a 2024-dollar value of $121 billion, that would be invested gradually out to 2050.

Under the AEMO detailed forecast, the private sector will invest the vast bulk of the
$121 billion between now and 2050, and will deliver around 300 gigawatts of capacity by 2050, compared to just 11 gigawatts of nuclear capacity, funded by the taxpayer in the Opposition’s proposal.

 

John Grimes, Chief Executive of the Smart Energy Council, said: “At best, Peter Dutton’s nuclear proposal would deliver 3.7% of the energy required at the same cost as the Government’s comprehensive strategy. In reality, current cost overruns happening right now in the UK could mean a $600 billion bill to Australian taxpayers, whilst delivering a small proportion of the energy that is actually required.”

“Australians concerned about cost of living today are in for a very rude shock if  Peter Dutton’s plans are realised”.

“The most optimistic assessment of Peter Dutton’s nuclear proposal indicates it is a pale shadow of the reliable renewables plan outlined and costed by the Australian Energy Market Operator.”

“Nuclear has no place in a country with cheap, reliable energy, powered by the sun and wind and backed up by renewable energy storage.”

“The Smart Energy Council calls on the Federal Opposition to immediately release their analysis of the costings and generation capacity from the seven proposed nuclear reactor sites. They need to explain how their forecasts contradict the experts at the CSIRO and AEMO. It is extraordinary that the details are being hidden from the Australian public.”

 

Detailed Analysis

  • The 7 sites identified by the Federal Opposition currently generate 11 gigawatts (see below).
  • Based on CSIRO and AEMO’s 2024 GenCost report, the capital cost of replacing the existing 11 gigawatts of coal capacity with 5 large nuclear reactors and 2 ‘small’ nuclear reactors in 2035 (the proposed, but unrealistic, timeframe) would be $116 billion.
  • The large nuclear reactors are likely to have a capacity of around 2 gigawatts each and the ‘small’ reactors are likely to have a capacity of 470 megawatts each.
  • It is assumed that nuclear plants operate at the same capacity factor as coal plants in 2024, around 60%.
  • It is assumed that First of a Kind (FOAK) premium averages around 25% over all plants, with a 100% premium average in the first plant. This is consistent with the average cost overruns for large infrastructure projects reported by the Grattan Institute. GenCost notes that FOAK premiums of up to 100% “cannot be ruled out”.

These are the most optimistic costings and timeframes.

 

The Reality

Based on lived experience in the UK and the US, where there is an existing nuclear industry:

  • The large nuclear reactors could cost more than $60 billion each.
  • The large reactors would be unlikely to be built by 2040.
  • There are no so-called ‘small, modular nuclear reactors’ outside of Russia and China.
  • The Hinkley C nuclear reactor in the UK, which was announced in 2016, was scheduled to be completed by 2025, at a cost of £18 billion (A$34 billion). However, the first of the reactors is likely delayed until 2031 with a cost of A$87 billion. The project proponents have not given a completion date for the second reactor. Hinkley C will generate around 3.2 gigawatts of capacity.

 

The costs outlined above do not include:

  • CoalKeeper – using taxpayer dollars to extend the life of polluting, inefficient coal-fired power stations, including refurbishing the plants to keep coal in the system until they can be replaced by nuclear.
  • “Throwing buckets of money” at State Governments, as Peter Dutton has committed.
  • The cost of compulsory acquisition of the sites.
  • The cost of community consultation;
  • The cost of establishing Emergency Planning Zones, and any costs associated with contamination clean ups in the event of nuclear accidents; and
  • The cost of storage of nuclear waste.

 

“Based on lived experience in the UK, Peter Dutton is wildly optimistic about the cost and timeframe for delivering nuclear reactors in Australia, a country that does not have a nuclear industry.”

 

Current coal capacity of proposed nuclear sites

No description available.

 

AEMO’s Step Change analysis of generation capacity to 2050 

AEMO chart of power generation through 2050

 

 

References:
1 AEMO Step Change scenario to 2050, Integrated System Plan (p14)
2 Financial Times https://www.ft.com/content/1157591c-d514-4520-aa17-158349203abd
3 BBC https://www.bbc.co.uk/news/business-37502547

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