CSIRO, Australia’s top science agency, has relegated nuclear reactors and hydrogen to the energy bench. They simply cost too much to be viable sources for our energy future. Rosco Jones on the latest GenCost report.
It was revealed in the shadows of Christmas, and its impact has so far been muted as there were more pressing matters to attend to, such as last-minute shopping and holidays. Yet the importance of the latest big-ticket analysis of energy costs cannot be understated. Indeed it will shape decision-making in politics and the energy markets this year and Australia’s energy future.
The CSIRO’s annual GenCost report has confirmed the view of new energy experts that small nuclear reactors and hydrogen – lauded as ‘wonder-technologies’ by pro-fossil-fuel political figures in their ideological campaign against renewable energy are fast losing allure as price projections skyrocket.
The 2023-24 GenCost report by CSIRO and AEMO is Australia’s most comprehensive electricity generation cost projection report. It uses the best available information each cycle to provide a benchmark on cost projections and updates forecasts to guide decision-making, as electricity costs change significantly each year.
This year’s analysis has cast ever more doubt on the Coalition’s nuclear fantasy, with a raft of issues plaguing nascent Small Modular Reactor (SMR) technology, accompanied by investor disinterest in large-scale nuclear power plants. Additionally, renewables are still by far the cheapest option for Australia’s grid despite this year’s inclusion of infrastructure costs. Unsurprisingly these results have left a wave of frustration rippling across the political right. They also come as a slap to Opposition Leader Peter Dutton’s campaigning against the Albanese government.
Although sidetracked by fossil industry distractions such as carbon capture and storage (CCS) technology, the government has pressed ahead with wind, solar and hydro as its focus for Australia’s energy future. The Coalition, in the absence of constructive policy ideas, has been pushing nuclear power through its usual media channels. However, the GenCost report estimates that SMR cost of production has risen 70% and also suggests demand for hydrogen is massively overinflated given the cost outlook.
CSIRO Gencost report
“GenCost has been advised by stakeholders that small modular reactors are the appropriate size nuclear technology for Australia … outages of large-scale nuclear generation would create a large contingent event of a gigawatt or more.”
It would be unreasonably expensive to maintain an energy supply with enough capacity to accommodate the loss of a conventional nuclear power station. This means that many smaller modular reactors would be far better suited to the Australian power grid as there is a higher degree of redundancy, but unfortunately, the expected cost of SMRs has rocketed in 2023.
Utah venture dashes hopes
The much-hyped UAMPS project in Utah has proven commercially unviable and was cancelled with inflationary pressures on construction costs contributing to its demise.
This failure of the argument for nuclear in the face of cheaper, proven renewable technologies has inflamed Australia’s conservative pro-nuclear lobby, which has resorted to attacking the CSIRO’s credibility and analysis.
Critics have taken issue with the usage of a single project’s failure as a broad indicator of SMR’s capital costings. However, as noted in GenCost, UAMPS is an industry leader in the SMR field and represents one of the only sources of data available to derive non-theoretical cost estimates.
“GenCost requires first-of-a-kind cost estimates given the first commercial project is yet to be completed”.
UAMPS was set to be the first completed commercial SMR. With the added context of Chinese ventures into SMRs having similarly rising costs even prior to 2023. It seems likely that theoretical estimates, most of which have been performed by organisations heavily influenced by the nuclear industry, were likely of poor quality rather than UAMPS being an improper proxy.
This explanation, included within the report, did not prevent scathing commentary by the likes of lobbyist turned LNP minister Ted O’Brien:
“They’re not looking at companies like Westinghouse, GE or Hitachi, and they’ve chosen that one design from a start-up for one customer that has run into problems and based the entire analysis of nuclear on that.”
UAMPS is the only SMR that has actually received design approval.
In addition to the cost hikes, the delivery timeframe for the implementation of SMRs was larger than expected. A common criticism of Nuclear Power is, of course, its lengthy set up times, which range from 6-8 years for conventional power stations. SMRs were intended to address this, with construction as short as 3-5 years, however this seems to no longer be an advantage in an Australian context:
“If a decision to pursue a nuclear SMR project in Australia were taken today, with political support for the required legislative changes, then the first full operation would be in 2038.”
Waiting until 2038 to begin using nuclear power guarantees another 15 years of dependence upon fossil fuels for energy production. Party Leader David Littleproud has publicly stated that the National’s goal is to stop renewables and wait for nuclear, continuing their tradition of unwavering support for petrochemical extraction and use, and it’s a similar story with the Liberals, who have publicly stated that no nuclear means no net zero.
Rosco is a student at the University of Queensland studying aerospace and plant science who plans a career in biological payload design for spacecraft. He has a passion for energy and transport infrastructure and its importance for handling the climate crisis.