‘Not Commercially Viable’: Energy Investors Reject Nuclear Investment in Australia

Two cooling towers of the Civaux nuclear power plant in Civaux, France, on Dec. 15, 2024. Romain Perrocheau/AFP via Getty Images

A group of energy investors has said they are not considering investing in nuclear energy in Australia as it is not commercially viable.

At a recent inquiry hearing on nuclear power generation, Marilyne Crestias, the head of policy and advocacy at the Melbourne-based Clean Energy Investor Group (CEIG), shared her view about what energy investors in the country would focus on in the coming period.

The CEIG comprises around 20 developers and investment managers who own half of all renewable assets in the National Electricity Market.

“At this stage, none of them have expressed an interest in investing in nuclear energy in Australia because of the [lack of] commercial viability for such an investment,” Crestias told the Select Committee on Nuclear Energy.

“If nuclear technology was to be invested in Australia, we would therefore likely require a heavy amount of public funding to fund not only the capital expenditure upfront, but [also] the continuous operation of those assets because of their base load nature and the difficulty in ramping them down.

“We would need to see, most likely, some significant public funding throughout the life of those assets as well.”

At the same time, Crestias said her group supported the Australian Energy Market Operator’s (AEMO) integrated system plan (ISP).

“It provides a clear signal around what technologies, the quantum of those technologies and the quantum of investment that will be required to deliver a reliable and affordable electricity system, ultimately for the benefit of consumers,” she said.

Since AEMO’s system plan identifies renewables as the least-cost pathway for Australia’s net zero transition, CEIG supported these technologies.

“Our members support the development of least-cost technologies such as wind, solar and storage, which can take a number of forms, either battery storage assets or pumped hydro,” Crestias said.

Cheaper Pathway to AEMO’s System Plan

A member of the Committee then questioned whether the CEIG would support an alternative approach (including nuclear) to the AEMO’s system plan if it was cheaper.

Pointing to a recent AEMO report, he said the current cost of the agency’s system plan, which is $594 billion (US$370 billion), was five times more expensive than when it was first announced.

In response, Crestias said her group members could consider a cheaper pathway.

“Our members support the principles that underpin the ISP, including the commitment to emissions reductions, alignment with decarbonisation goals for Australia, and making sure that those the technologies that are proposed in the ISP are technically feasible as well as commercially viable so that we can leverage private capital,” she said.

“So, subject to the principles have just aligned, if there was a lower cost approach, we would be very pleased to consider the alternative approach, as long as it also met those principles.”

Crestias’s remarks come as the Opposition has announced the cost of its nuclear strategy, which is $331 billion.

The Opposition said the plan would save up to $263 billion (US$167.4 billion) compared to Labor’s renewable-only strategy and could cut down energy bills by 44 percent for Australians.

Industry Group Supports Affordable, Reliable Energy System

Meanwhile, Tennant Reed, the director of climate change and energy at the Australian Industry Group (AI Group), which represents over 60,000 Australian businesses, said the group’s members had a strong interest in achieving competitive energy costs, maintaining an adequate level of energy reliability, and reaching net zero emissions across the economy.

“Delivering those goals requires a focus on our energy systems as a whole, including efficient investment and management of a range of assets and technologies across the supply and demand sides,” he said.

“While the specific characteristics of energy technologies are important to our effective management and integration, in principle, AI Group and our members are indifferent to the specific technologies used, as long as the energy system delivers the overall outcomes of affordability, reliability and net zero emissions.”

Despite being a safe, clean, and globally important energy source, Reed said nuclear power was unlikely to be economically attractive in Australia.

However, he stated that it was possible that nuclear’s viability might improve in the future and that it was sensible to lift the state and federal bans on the technology.

“But it would not be sensible to scale back delivery of the integrated system plan in the National Electricity Market, including transmission and large scale renewable generation, on the hope that nuclear’s relative attractiveness sharply improves in future,” he said.