‘Most Expensive’: Energy Minister Says Nuclear Makes No Sense for Australia

Australian Climate Change and Energy Minister Chris Bowen launches the National Electric Vehicle Strategy at a press conference outside Parliament House in Canberra, Australia, on April 19, 2023. AAP Image/Lukas Coch

Nuclear is not on the table as an option to add to Australia’s energy mix amid a push for net-zero due to the huge initial costs, the Minister for Climate Change and Energy, Chris Bowen, has said.

As Australia lacks existing nuclear infrastructure due to its nuclear ban since 1998, the costs required to set up an industry from scratch make it the “most expensive form of energy” for the country.

Bowen told the Committee for Economic Development of Australia on May 15 that it made “no sense” to introduce nuclear into the energy mix when they would need to create an entire industry.

“There is no nuclear facility around the world under construction which isn’t currently taking major delays and major cost blowouts—from $5 billion to $9 billion. Even proponents of small modular reactors concede they cost $5 billion,” he said, The Australian reported.

“Which is a lot of billions for not many megawatts. It makes no sense to me whatsoever.

“That’s before you even get to talk about social licence. You have transmission, and then you have the social licence of nuclear power plants. So it’s not an option for Australia.”

Bowen prefers sticking with renewables, which he calls the “cheapest” form of energy available.

The comments come after Opposition leader Peter Dutton called for the introduction of nuclear as a cost-effective, low-emission, and safe form energy option in his Budget Reply speech.

“In the 21st century, any sensible government must consider small modular nuclear as part of the energy mix,” he said. “Thirty-two countries—including Canada, China, France, the United States, and the United Kingdom—use zero-emission nuclear power today, including to firm-up renewables.”

Dutton noted that with the government against coal and nuclear, the only remaining energy is gas.

“Yet Labor wants gas gone too,” he said.

Nuclear vs. Renewable Costs

Australia’s government scientific research centre, the CSIRO, said on May 11 that nuclear power did not provide an economically competitive solution for the country.

Paul Graham, a CSIRO energy economist, said there was a lack of robust data for calculating nuclear costs, particularly around small modular reactors (SMR).

“The main area of uncertainty with nuclear is around capital costs,” Graham said. “Generally, we like to use hard data from commercially proven technologies, and when we don’t have that, it can be very tricky.”

CSIRO found that the two SMRs known to operate in the world are found in China and Russia, which both faced huge cost blow-outs.

“We don’t disagree with the principle of SMRs,” Graham said.

“They are an attempt to speed up the building process of nuclear plants using standardised components in a modular system, and it may well be possible to achieve cost reductions over time.

“However, because of [the report’s] data-driven approach, it is not feasible to derive any plausible costings with the current limitations of existing SMR sources outside of those already cited.”

For the annual CSIRO report with the Australian Energy Market Operator that details projected costs for energy generation and storage, it concluded that renewables, led by onshore wind and solar, were the cheapest energy generator technologies.

Costs for wind and solar was calculated to be at a maximum of $83 per megawatt hour in 2030, while SMRs were around $130 to $331 per megawatt hour.

Graham noted that calculations take into account initial capital financing and ongoing fuel, operation, and maintenance costs but do not include costs for bird strikes at wind farms, site remediations or nuclear storage.

For wind and solar calculations, they do include additional storage and transmission costs. Meanwhile, for nuclear, it includes hard infrastructure and annual loan repayments.

However, leading eco-modernist Michael Shellenberger, who is the founder of Environmental Progress, has disputed the claim that renewables are cheap and clean.

“The reason is easy to understand,” he said in October. “Solar and wind produce too much energy when you don’t need them, and not enough energy when you do, and both of those impose costs on the electrical grid.”

“Every time you take electricity off the grid and put it back on, you’re paying energy penalties, which increase the cost of that energy somewhere between 20 to 40 percent.”

Shellenberger also noted that renewables produce 300 times more waste than nuclear plants do—every solar panel is a piece of hazardous waste.

However, when solely considering economic costs, coal remains the cheapest energy option for Australia.