Australia Institute says nuclear power 'uninsurable and uneconomic' in Australia | RenewEconomy

Australia Institute says nuclear power ‘uninsurable and uneconomic’ in Australia

Research shows greatest barrier to nuclear power in Australia remains cost, as parliamentary inquiry continues in Canberra.

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A new report from progressive think tank The Australia Institute has found that cost remains an almost insurmountable nuclear power in Australia and it is becoming increasingly uncompetitive with lower cost renewable energy alternatives.

The Australia Institute found that the risk of nuclear accidents effectively made an Australian nuclear power plant uninsurable, with the high costs of insurance completely undermining the financial case for any proposed project.

“The biggest barrier to nuclear power in Australia is that it is uneconomic, the costs of establishing a nuclear industry simply don’t stack up,” the Australia Institute’s climate and energy program director Richie Merzian said.

“Insurance policies by Australia’s major insurers contain specific language excluding coverage of nuclear disasters; none will insure against nuclear incidents.”

The think tank has released its latest assessment of the prospects of an Australian nuclear industry ahead of its appearance before a parliamentary inquiry in Canberra. The research found that the cost of nuclear power is increasing and that recent experience has shown nuclear projects slow to construct and that adoption is falling in some countries.

The Australia Institute pointed to the fact that cheaper renewable energy technologies and the rapid falls in the costs of energy storage, meant there were alternative sources of zero-emissions electricity supply that made nuclear power unnecessary.

The report cited the example of the Hinkley C nuclear project in the United Kingdom, which as faced several delays and cost overruns while being expected to deliver electricity at a substantially higher price than renewable energy projects.

“Renewables, demand management and storage can meet Australian energy needs safely and at best-cost. In a country with no existing nuclear industry and vast renewable energy resources, it makes no economic sense to establish nuclear generation,” Merzian added.

“A sensible, fact based conversation about nuclear power in Australia must start in economics, and given the industry’s dismal economic outlook, really that is where the conversation should end.”

The Australia Institute was also pessimistic about the potential for Small Modular Reactors (SMR) to be used in a viable nuclear project, finding that they suffer from ‘diseconomies’ of scale, and are likely to remain more expensive than zero-emissions alternatives until at least beyond 2040.

In its submission to the nuclear inquiry, the Australian Energy Market Operator said that it believed it would take at least 15 years to get a Small Modular Reactor up and running in Australia.

The implication of this, AEMO said, was that nuclear power plants would only be a viable replacement for coal-fired power stations scheduled to close from around 2040 onwards, provided the economic and social acceptance challenges had been addressed.

“Based on this timeline, SMR technology may be an option for consideration for the replacement of the Bayswater and Tarong power stations over the next 20 years,” AEMO said.

AEMO also told the inquiry that a Small Modular Reactor would likely be substantially more expensive than renewables combined with storage.

“The levelised cost of electricity (LCOE) in 2020 of, say, wind with 6 hours of pumped hydro storage as a representative firmed renewable, is in the range of 100 $/MWh, whereas the estimate for LCOE of SMR technology is $250 to more than $300 per MWh. SMRs could be almost three times more expensive than firmed renewables.” AEMO said.

The nuclear power inquiry was criticised by the Clean Energy Council, which labelled it a ‘distraction’ from more pressing challenges facing the Australian energy market.

“It is beyond our comprehension as to why Australia would contemplate replacing one dirty energy production technology with another that produces large amounts of highly hazardous waste, when it could fulfil its objectives of zero emissions with technologies that are lower-cost, faster to develop and readily available now,” the Clean Energy Council said in its submission to the inquiry.

Nuclear power has long faced barriers in Australia including with lower social acceptance compared to other energy technologies and active opposition from environmental groups, notwithstanding current prohibitions under the Commonwealth Environment Protection and Biodiversity Conservation (EPBC) Act.

The Inquiry into the Prerequisites for Nuclear Energy in Australia was instigated in August by federal energy minster Angus Taylor following pressure from a backbenchers group led by Barnaby Joyce.

While allowing the inquiry to go ahead, the Morrison Government has said that it has no plans to lift the prohibition of nuclear power activities under the EPBC Act.

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5 Comments
  1. Alexander Hromas 11 months ago

    It is interesting how the small modular slogan refuses to die. Sure we can build small nuclear power plants USA and Russia do it all the time for nuclear powered submarines about 60MW and air craft carriers about 200MW. These units are not economic for commercial power generation. The installed cost per KW decreases with size and this is the reason why commercial reactors tend to be around 1.2 GW in capacity about 500 times the size of the military naval nuclear units. Westinghouse touted these for a long time but never delivered a commercial unit and the Russians and Chinese are planning these to help them develop oil reserves in the Arctic and Bohai gulf.

  2. Richard Bowen 11 months ago

    the economic reality will never allow nuclear to start in this country and I think in many other places in the world, I believe the real agenda here is our politicians want to create a massive radioactive nuclear waste facility, so they talk up nuclear power knowing full well it will never see the light of day purely on economics despite the lies of Barnaby Joyce telling people if we had nuclear our electricity would be free, over the years various countries made a choice to have nuclear power with their heads in the sand as the ongoing cost of waste management is huge and will go on for many thousands of years. Yes it’s true Australia sold a lot of uranium to these countries and now they want us to accept the waste, there has been many lies told about how lucrative it will be to manage and dispose of this radioactive waste but the truth is these facilities will be ran and managed at the lowest dollar cost it will not be lucrative at all and after 10 or 20 years we will be left with a radioactive disaster that no one but the Australian taxpayer to pay through it all.
    I am so frightened for my family and families families and the future of health and safety in Australia, these insane bastards must not be re-elected in the next election because our future generations depend on it.
    PS if I hear one more brainless idiot tell me that in a few years we will have the technology to make radioactive waste safe I will spew my guts! this will be the next stupid thing our politicians will tell us is “we know how to make radioactive waste safe it come from Barnaby Joyce he knows”

  3. Aidan Stanger 11 months ago

    Why was a link to the report not included?

  4. GregS 11 months ago

    Besides the huge cost to build a nuclear plant, plus the inevitable cost over runs, there is the massive cost to decommission it. Does anybody have any hard date on those decommissioning costs?

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