Why the nuclear lobby makes stuff up about cost of wind and solar

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Nuclear lobby has been making such extraordinary and outrageous claims about wind, solar and batteries it makes you wonder if anything they say about energy can be taken seriously.

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There was no doubt that – given the opportunity – the ever-optimistic nuclear lobby in Australia would attempt to seize the moment and press the claims of their favoured technology to the parliamentary inquiry gifted to them by the Morrison government.

The nuclear lobby has largely given up on existing nuclear technology, recognising that the repeated cost blow-outs and delays means that it is too expensive, too slow and not suited for Australia’s grid.

Instead, they have invested their hopes in a technology that doesn’t actually exist yet, small nuclear reactors. But to promote it over its main low carbon competitors – wind and solar and storage – it has had to come up with forecasts for its pet technology that are, at best, fantasy, and assessments of wind and solar that are patently false and misleading.

It is generally accepted in the energy industry that the cost of new nuclear is several times that of wind and solar, even when the latter are backed up by storage. The GenCost 2018 report from the CSIRO and the Australian Energy Market Operator puts the cost of nuclear at two to three times the cost of “firmed renewables”.

The nuclear lobby, however, has been insisting to the parliamentary inquiry that wind and solar are four to seven times the cost of nuclear, and to try and prove the point the lobby has been making such extraordinary and outrageous claims that it makes you wonder if anything else they say about nuclear – its costs and safety – can be taken seriously.

RenewEconomy has been going through the 290-something submissions and reading the public hearing transcripts, and has been struck by one consistent theme from the pro-nuclear organisations and ginger groups: When it comes to wind, solar and batteries, they just make stuff up.

A typical example is SMR Technologies – backed by the ever-present coal baron Trevor St Baker – which borrows some highly questionable analysis to justify its claim that going 100 per cent renewables would cost “four times” that of replacing coal with nuclear.

It bases this on modelling by a consultancy called EPC, based on the south coast of NSW, apparently a husband and wife team, Robert and Linda Barr, who are also co-authors of “The essential veterinarian’s phone book”, a guide to vets on how to set up telephone systems.

The EPC report admits to deliberately ignoring the anticipated cost reductions of wind and solar from AEMO’s 2018 integrated system plan. Even worse, the report dials in a completely absurd current cost of wind at $157/MWh (before transmission costs), which is about three times the current cost in Australia, and $117/MWh for solar, which is more than double.

The costs of wind and solar are not hard to verify. They are included in the GenCost report, in numerous pieces of analysis, and even in public announcements from companies involved, both buyers and sellers. St Baker could have helped out, as his company has signed two big solar contracts (for the Darlington and Vales Point solar farms) and we can bet he won’t be paying $117/MWh.

Apart from costs, the EPC scenarios for 100 per cent renewables are also, at best, imaginative.

For some reason they think there will only be 10GW of solar in a 100% renewables grid and just 100MW of battery storage. Big hint: There is already 12GW of solar in the system and about 300MW of battery storage. But we discovered that assuming wind and solar do not or won’t exist, and completely ignoring distributed energy, are common themes of the nuclear playbook.

The delivered cost of energy from wind and solar in the EPC modelling of a 100 per cent renewables grid? A hilariously outrageous sum of $477/MWh.

Contrast this with SMR’s claims that about the cost of a modern small modular reactor – $65/MWh – even though it admits the technology “has not been constructed”, and which leading nuclear expert Ziggy Switkowski points out won’t likely be seen for at least another another decade.

Even more laughably, the nuclear scenario painted by EPC is not even zero emissions, because it relies on 12GW of gas capacity as back-up and balancing for its proposed nuclear fleet, and somehow assumes there is only 300MW of solar in such a system.

This is the Mickey-Mouse modelling cited by the company with the biggest ambition for nuclear in the country. And it would be wrong to put the blame on the EPC team alone.

Its report says that there were other contributors, including Barry Murphy, the former head of Caltex Australia; Mark Ho, the president of the Australian Nuclear Association, and Barrie Hill, the managing director of SMR Nuclear Technology. If that’s a reflection of their attention to detail, let’s hope they are not doing the engineering as well.

The EPC report is common currency in the submissions to the inquiry.The submission from Nuclear for Climate group, headed by one of the most prominent nuclear advocates in the country, Robert Parker, quotes the same analysis – which isn’t a surprise as, according to Hill’s testimony to the inquiry, Parker also worked on that modelling.

The EPC report also forms the basis of the analysis from the Nuclear Now Alliance, which describes itself as a not-for profit group of Australian scientists and engineers that are passionate about the benefits of nuclear “but have no connection to the industry.”

Moltex, which says it is “developing” some sort of fission technology (it says it has a design but hasn’t actually built anything) uses the same trick as EPC to paint a daunting picture of renewable and storage costs, in this case by multiplying the cost of batteries by the total amount of electricity consumed in a single day.

“Australia consumes 627 Gigawatt hours of electricity per day, and so the battery storage required to cover just one 24 hour period would cost A$138 billion,” it proclaims. It is such an incredibly stupid and misleading claim that it simply takes the breath away.

Another feature of the nuclear lobby’s submissions is its collective fascination with the Nyngan solar farm in NSW, which was one of the very first built in the country, and the first that was bigger than 100MW.

Yet Nyngan is repeatedly cited by the nuclear lobby as having “the latest data available” and therefore proof of the high cost of solar – $400 million for 102MW says one submission that claims it is “latest large-scale utility project,” and which later claims that Nyngan and the Macarthur wind farm (built six years ago) are the “most recent deployments of solar and wind in Australia.”

That is complete bollocks and deliberately misleading, and not very hard to fact-check.

Nyngan was completed in early 2015, and another 40 large scale solar farms have been built since then, with the cost coming down by some 70 per cent. Macarthur was built in 2013, and about 6GW of wind have been added to the Australian grid since, and costs have come down considerably.

But that’s what the nuclear industry feels it needs to do to make its yet-to-be invented technology sound feasible and competitive.

Let’s go to StarCore, a Canadian company that says it, too, wants to manufacture small modular reactors, and claims renewables are “seven times” the cost of nuclear, and which also has a fascination with the Nyngam solar farm,.

It uses the cost of Nyngan to make the bizarre claim that to build 405 of them would cost $68 billion, and then compares this to what it claimed to be the “zero upfront capital costs” of one of StarCore’s plants.

Say what? Does the nuclear plant appear just like that? Solar and wind farms also usually have long-term PPAs, but they still have to be built and someone has to provide the capital to do so. Nuclear with a zero capital cost? Really, you couldn’t make this stuff up.

Down Under Nuclear Energy, headed by a former oil and gas guy and a former professor at UWA who specialises in mathematical social science and economics, also bases its solar costs on the Nyngan solar farm and makes this bizarre claim about battery storage:

“The precipitous decline in solar technology is highly unlikely to be replicated in batteries, a technology already approaching 150 yrs of maturity,” it says.

Hey, here’s some breaking news. Costs of battery storage have already mirrored solar’s fall, down 80 per cent in last decade and utilities like Transgrid predict another 60 per cent fall over next 10-15 years.

And most large-scale storage batteries use lithium, an abundant resource, and this is battery technology that was actually invented just over 40 years ago by the winners of this year’s Nobel Prize for Chemistry. As the Nobel citation says: “(Co-winner Stanley) Wittingham developed the first fully functional lithium battery in the 1970s.” Not 1870.

Women in Nuclear and the Australian Workers Union both quote the Industry Super report on nuclear, which we debunked a while back, which puts the cost estimates of wind and solar plants at 10 times their actual cost.

The “capital cost” of the Dundonnel wind farm in Victoria, for instance, is put at $4.2 billion (try $480 million) according to their bizarre calculations, while the Darlington solar farm is put at $5.8 billion (try $350 million).

It’s pure garbage and the fact that it is being quoted really does beggar belief.

The final ploy of the nuclear lobby is to attack the messenger of the low cost of renewables, and in this case it is the Australian Energy Market Operator and the CSIRO and their combined GenCost 2018 report, where they dared suggest that nuclear was the most expensive option available, and more than twice and possibly three times the cost of firmed renewables.

A group called Bright New World led the attack, and was supported by the Minerals Council of Australia, the business lobby that has managed to marry support for nuclear with its long-standing anti climate policy and pro-coal positions, and whose links with the Coalition government run deep, even to the point of providing Scott Morrison’s lump of coal that he waved around parliament.

The parliamentary inquiry quizzed both the CSIRO and AEMO about these costings. The CSIRO came back into further hearings a week ago and said it was sticking with those costs, noting it was based on current nuclear costs and that SMRs in the commercial field don’t actually exist yet, and won’t for a while.

“We are sticking with that number, because it is a first-of-a-kind plant,” said senior research scientist Jennifer Hayward. “That’s the assumption that we’re sticking with.”

This was supported by AEMO, in a supplementary submission it filed after also being questioned about GenCost 2018 and other matters.

“It is possible that especially for immature technologies such as SMR, initial cost estimates experience an upward correction as more detailed studies are conducted. This phenomenon is also known as the Grubb curve.”

AEMO listed what the nuclear industry regards as the most comprehensive summary of SMR technologies, which points out that most are in the stage of “conceptual design”. They are at least a decade away from being deployed, as Switkowski notes and the industry concedes.

But even if these estimates are wound down, and we won’t know if that reflects reality until the first SMRs are actually deployed some time around 2030, AEMO makes this fundamental point: Nearly all of Australia’s coal generators will have retired by the time that the first SMRs could be deployed in Australia, even in the most optimistic timeline.

“When considered as a replacement, the technology would have to compete economically with firmed renewable energy to fill those gaps,” AEMO notes. And there’s bugger-all chance of that, as the CSIRO notes, because of the rapid learning rate of technologies such as solar and battery storage.

“We would expect SMR technology to demonstrate learning rate effects, ie cost improvements, only after it is being deployed at scale, both globally and in Australia,” the AEMO submission says.

“If SMR deliver to their promise of low cost, security and flexibility, they might be a complement for low- cost variable renewable energy sources, but the technology would have to perform better than and compete economically with a number of alternative technologies, eg pumped hydro, batteries, green hydrogen etc.”

And by that time, the coal fleet will have been replaced by renewables and storage, making all the current modelling of the nuclear folk and their assumption that solar and batteries can simply be wished away completely redundant, particularly those that rely on a doubling of the gas fleet to act as back-up for nuclear.

In other words, it won’t be zero emissions, and if the nuclear lobby really thinks that a market where the marginal cost of generation is set by 18GW of gas under their Australia nuclear scenarios, and still delivers a price well below $100/MWh, then they really are kidding themselves.

But all the nuclear submissions have one common trait. They assume that the deployment of renewables is stopped in its tracks, either now of sometime soon. It’s more wish than analysis, but in that they will have found a willing fellow traveller in energy minister, Angus “there is already too much wind and solar on the grid” Taylor, who thought it a good idea to have the inquiry.

But the reality is that the rest of the energy industry wants to move on. They know that the grid can be largely decarbonised within the next two decades from a combination of renewables and storage.

That’s a simple truth that the nuclear lobby cannot accept, and they’ve passed up the opportunity to have an open and honest debate by promoting utter garbage about renewables, to the point where it would be difficult to believe much of anything else they say.

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