Nuclear inquiry told “firmed renewables” cheapest and best option for future

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Experts tell inquiry that increasingly expensive large-scale nuclear power, and as-yet unproven small reactor technology, cannot compete with firmed renewables.

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A mix of distributed renewable energy generation and firming technologies including battery storage and pumped hydro remains the best path forward for Australia’s future grid, experts have told the federal government’s inquiry into nuclear power.

A panel including representatives from Australia’s energy market regulator (AER), rule maker (AEMC) and operator (AEMO) faced questions on Thursday from the House of Representatives Standing Committee on the prerequisites for nuclear energy in Australia.

Established by the federal Coalition and chaired by Queensland LNP MP Ted O’Brien, the Committee aims – according to O’Brien – to answer the three main questions of whether nuclear is “feasible, suitable and palatable” in the Australian context.

But in a hearing in Sydney on Thursday morning, it heard that nuclear power just doesn’t stack up against firmed renewables – already at price parity with new-build coal and gas and “well and truly” on track to becoming the lowest cost generation form for the National Electricity Market.

Nuclear power, meanwhile, was around four times more expensive – $16,000/kW for the still mainly conceptual Small Modular Reactor technology – and not fit for purpose on a rapidly changing Australian grid.

“Unfirmed renewables are effectively the cheapest form of energy production today,” said Alex Wonhas, the chief system design and engineering officer at the Australian Energy Market Operator.

“If we look at firmed renewables, that current cost is roughly comparable to new-build gas and new-build coal, but given the learning rate, this will well and truly become the lowest cost generation form for the NEM.

“There is a certain amount of energy that we expect renewables to deliver,” Wonhas added. “But we will need dispatchable resources, and generators that can respond quickly.

“I don’t think we want many more plants that have a very stable output profile. We’re looking for plant that can increase and decrease rapidly and respond to market.”

Pushed on the challenges to the grid of “intermittent renewables” by O’Brien, Wonhas was upbeat in his outlook.

“There’s actually a whole suite of different technologies that we can draw upon, in the case of firmed renewables,” he told the Committee.

“Gas is an effective firming option, but there’s a whole range of other technologies out there – such as solar thermal, that are dispatchable.” He also added pumped hydro and battery storage.

“We are quite fortunate that we have many different technology options available that we can use to build Australia’s future generation system.”

And nuclear, it is becoming blindingly clear, is not one of them.

Even Ziggy Switkowski, who headed up the Coalition’s last big excursion into nuclear power, was unequivocal on that.

“The window (in Australia) is now closed for gigawatt-scale nuclear,” he told the Committee on Thursday, noting that current large-scale versions of the technology had failed to find anywhere near the same economies of scale that had been enjoyed by solar and wind.

“Nuclear power has got more expensive, rather than less expensive,” he added, while also noting that the time required to develop new nuclear projects could cover at least five political cycles.

“There is no business case, and no investor appetite.”

Switkowski told the Committee that the only hope for nuclear in Australia hinged on the future of Small Modular Reactors – which, as Jim Green explains here, are currently “non-existent, overhyped, and obscenely expensive.”

Current costs for SMR generation, as modelled by the AEMO and CSIRO, are estimated at $16,000/kW, which as Committee member and Labor MP Josh Wilson pointed out, is more expensive than large-scale nuclear by at least 50 per cent, and four or five times higher than capital cost of new solar wind.

And while other technologies are modelled to see a decrease in their cost over time – solar thermal and storage, for example, at $7,000/kW is expected to fall to around half that in 2050 – SMR nuclear costs stay flat in AEMO/CSIRO modelling out to 2050.

 

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