Australia’s premier scientific organisation, the CSIRO, has patiently and methodically slapped down the major nuclear talking points promoted by Coalition leader Peter Dutton in its latest GenCost report, which confirms – yet again – that integrated wind and solar are easily the cheapest option.
The CSIRO first published the GenCost report in 2018, under the then Coalition government, and its conclusions have been consistent – integrated wind and solar are by far the best and lowest cost options. The new draft of the 24/25 version, which notes ongoing cost reductions in solar PV and battery storage, confirm this.
In short, it finds that firmed renewables, including transmission and storage costs, will cost between $80 a megawatt hour and $122/MWh in 2030, should they account for 80 per cent of variable generation, which is the federal government target.
That compares to between $145 and $238/MWh for large scale nuclear, and up to an eye-watering $487/MWh for so-called small modular nuclear reactors, which are part of the Coalition’s energy proposals, but which don’t exist in commercial form. The CSIRO says neither could be deployed before 2040.
See more details here: GenCost: Falling costs of solar and batteries confirm integrated renewables are cheapest option
The CSIRO, however, has also faced extraordinary and relentless attacks from the Coalition over its analysis, amplified by right wing so-called “think tanks” and the Murdoch media, and given a largely uncritical run in much of mainstream media.
Dutton’s and the nuclear lobby’s main beef with the CSIRO calculations is that it makes nuclear power look very expensive. Which it clearly is.
They argue the CSIRO report gives their favoured technology no credit for being long life (they say 60- 100 years), for having high capacity factors, and they insist that the CSIRO has got it wrong on its estimated build times.
The CSIRO has addressed each of these claims in its draft 2025 GenCost report. In fact, it is remarkable just how much of the report is devoted to a technology that it notes could not possibly be delivered in Australia before 2040 – and it forensically debunks the lot of them.
Benefits of longer life
Let’s go to the life time issue first, because it has been a particular focus of Dutton and his energy spokesman Ted O’Brien as they promote their nuclear campaign around the country.
They say that because nuclear power plants can last 60 or even 100 years, their huge up front capital costs should be smeared across the period, rather than the 30 years calculated by the CSIRO.
That sounds plausible, but the CSIRO makes a number of important points. Firstly, the 30-year calculation is standard practice for the energy industry because no financial institution will lend for longer.
And if loans were to be spread over a 60 year or 100 year period, the interest payments would be crippling. It means that the benefits of such calculations would be just 11 to 15 per cent – and not be experienced by Australian consumers until at least 45 years – or around 2070.
“It’s not a magical halving of costs or anything like that. The savings are relatively modest,” CSIRO chief energy economist Paul Graham says in the latest episode of Renew Economy’s weekly Energy Insiders podcast (to be published on Monday).
But there is another problem. The CSIRO also points out that if nuclear power plants are to last that long then they need regular refurbishment. Based on overseas experience, it puts the capital cost of those refurbishments at nearly one third of the original capital cost of the plants.
And it also puts a large hole in another linked Coalition argument, which is that wind and solar power must cost more because their facilities have to be replaced after 25 or 30 years.
The CSIRO says yes, they do need to be replaced. But when they are rebuilt, they will be rebuilt at considerably lower cost, and that’s not even taking into account the fact that wind and solar will be built where current facilities already exist, with connection points, land deals and other important infrastructure already in place.
“What we concluded from that was, actually it’s hard to identify any real unique benefit that nuclear delivers from having a long life,” Graham tells Energy Insiders.
“You can get the same benefit from shorter lived technologies, even when you have to build them twice, because both things essentially involve a reinvestment step. And when you look at the savings, they’re pretty similar.”
Indeed, the CSIRO puts the cost of rebuilt wind and solar at a considerable discount to refurbished nuclear – The experience in Ontario, the Australian nuclear lobby’s poster market, confirms this. (See table above).
Each of Ontario’s main reactors will be off line for around three years – the cost is huge – and some of the world’s biggest batteries are being built to help fill in the gap, which torpedoes another nuclear lobbyist fantasy that somewhere these power plants do not need back up.
“It’s not a magical halving of costs or anything like that. The savings are relatively modest.
Capacity factors
The second issue is also critical. The nuclear lobby and the Coalition have told the CSIRO that it must calculate nuclear costs based on a 93 per cent capacity factor, and only at that rate.
This is important to them because – at such a high capacity factor – the nuclear plants are rarely switched off or even dialled down, and that gives the technology the best chance to recoup its high costs more quickly.
The CSIRO says that while such high capacity factors exist in the US, it is not the reality in the rest of the world, and is unlikely to be the case in Australia, particularly with the growth of rooftop solar and large scale renewables.
It says the global average capacity factor for nuclear plants is 80 per cent, and 10 per cent of nuclear power plant have capacity factors of less than 60 per cent. “On international data alone, the proposition of only considering 93% is not supported by the evidence,” Graham says.
And in Australia the experience of baseload power plants – in this case coal – is that they run at a capacity factor of around 59 per cent.
“In Australia we have more than 100 years of experience with operating baseload generation, not nuclear but coal,” Graham says,
“The average for black coal in the past decade is 59%. On this basis we cannot support the proposal that 93% adequately captures market conditions in Australia.”
It is interesting to note here that nuclear power does not ‘back up” wind and solar as Dutton and O’Brien often claim, it must displace it. And in Australia, that’s likely to mean household solar first and foremost.
Development lead times
The third argument that CSIRO addresses is that of the time it takes to build a nuclear power plant. This is important because the Coalition insists it can deliver its first nuclear power plant by 2035, although no one outside the Coalition and the nuclear lobbyists actually believe that.
“Many stakeholders have agreed with the GenCost estimate of at least 15 years lead time for nuclear generation,” the CSIRO report says. “Nuclear has no projects in the Australian development pipeline, has additional safety and security steps and needs new legislation and regulations.”
Where the nuclear lobby points to projects with faster lead times, CSIRO has looked at that too, and makes the interesting and relevant observation that these occur in countries where the democracy score is low, and where labour costs and protections are also low.
When it comes to small modular reactors, the Coalition argument makes no sense. They don’t actually exist in commercial form and it is unlikely any will be built before the end of the decade.
Dutton and O’Brien says they will only build an “nth of a kind”, meaning they will wait for the tech ology to be established and lower costs,.
But that is not going to happen in the timeframe that would allow the first power to be delivered by 2035.
The CSIRO, kindly, assesses its nuclear costs on an “nth of a kind” basis.
“We have been seeing all these big cost blowouts overseas, in countries like the UK and the US, and mostly it’s because these countries have come back (to building nuclear after a gap of several decades) and they’d lost all their knowledge about how to build nuclear,” Graham says.
So – after all that – and working through all the Coalition and nuclear lobby talking points – where does that put nuclear in comparison to other technologies?
“So large scale renewal, large scale nuclear, is sitting at a position one and a half to two and a half times the cost of firmed renewables,” Graham says on Energy Insiders.
“And if we look at small modular reactors …. that’s between about four to six times higher. And that’s because that’s really a pre commercial technology.
“We don’t really have any any sort of commercial deployment of that technology globally. So it’s still carrying some very high costs at the moment, which will come down once it’s once they successfully build a few more of them. But at the moment, it’s a very high cost.”
The report released on Monday is just a draft, and will go out to consultation until February, before a final report is prepared. In the meantime, the Coalition will release its own costings, and the CSIRO can expect some more blowback from the lobbyists.
“You do have to have a bit of a thick skin,” Graham tells Energy Insiders.
“But that’s the way we sort of improve things. And what’s been, I guess, unique about the last two years of GenCost is that the discussion that’s been had around it isn’t just a sort of energy insiders conversation, to forgive the pun, but it’s, it’s blown out into a sort of a, yeah, it’s much more of a public conversation.
“It’s not always at the level of sort of the sort of scientific and engineering discussion that we tend to have inside the industry, but that’s fine.
“We’ve adapted, and we’ve it’s given us a big opportunity to sort of deep dive into some of these topics, like nuclear that people want to hear about. So we’re sort of glad to do it. And we think we’ve, we hope people think that we’ve done a reasonable job of presenting fair and balanced information.”
