24 May 2024

GenCost says renewables cheaper than nuclear for future, but not all agree

| Chris Johnson
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Rows of solar panels on farmland.

CSIRO’s latest GenCost report says renewable energy is a cheaper option than large-scale nuclear for new-build electricity technology. Photo: Australian Renewable Energy Agency.

Renewables remain the cheapest option for new-build electricity technology, says CSIRO in its latest GenCost report, which for the first time includes large-scale nuclear technology in its comparisons.

The report, prepared in collaboration with the Australian Energy Market Operator (AEMO), assessed large-scale nuclear from what it described as “the highest volume of feedback” since the GenCost’s inception in 2018 – and found it to be more costly in the journey to net-zero emissions.

In assessing the suitability of large-scale nuclear power generation in Australia’s electricity system, GenCost found while generation units of such scale were unprecedented in Australia, there were no known technical barriers.

But it also determined that nuclear power was more expensive than renewables and would take at least 15 years to develop, including construction.

This reflects the absence of a development pipeline, the additional legal, safety and security steps required, and weighing the evidence provided by stakeholders.

CSIRO’s director of energy, Dietmar Tourbier, said GenCost was committed to robust stakeholder engagement, with the latest consultation attracting more than 40 written submissions and more than 200 industry webinar participants.

“The feedback provided by the energy community each year is invaluable, given that cost forecasts of future electricity generation, storage and hydrogen production can fluctuate significantly and no single technology can achieve our transition to net zero,” Dr Tourbier said.

“Whether the input GenCost receives is highly specialised or simply advocating for a particular pathway, our considerations are policy and technology neutral.”

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Reaction to the report has been as swift as it has been controversial; applauded by the renewable energy sector but criticised by advocates of nuclear power.

It comes as Opposition Leader Peter Dutton prepares to announce where he would locate seven nuclear reactors around the country.

The Institute of Public Affairs, a conservative think tank and strong advocate for nuclear energy, insists the GenCost report is misleading and built on flawed energy cost modelling.

“The CSIRO’s latest GenCost report has again relied on the discredited levelised cost of electricity methodology to calculate energy system costs,” IPA’s executive director Scott Hargreaves said.

“This gives Australians and policymakers alike a false understanding of the cost of our energy future.”

But the Clean Energy Council has welcomed the report’s findings as important data that again confirms renewables as the most affordable reliable form of electricity generation.

The council’s chief executive Kane Thornton described renewables as “the key” to achieving a cleaner, more secure future.

“This report also outlines that proposals for large-scale and small modular nuclear reactors are not a serious proposition for Australia’s energy future,” he said.

“Coal is exiting our energy system at record pace and only renewables firmed by storage can replace this generation in order to avoid blackouts and power price hikes.”

The GenCost report also revised future wind costs upwards.

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It says wind power is recovering the slowest from global inflationary pressures and cost projections for onshore and offshore wind have been revised upwards in the next decade.

Despite this, updated modelling found that renewables, including costs associated with additional storage and transmission, remain the cheapest new-build technology.

Renewables retain their competitive position due to a decade of cost reductions experienced by wind, solar photovoltaics and batteries prior to the pandemic.

Costs of their “more mature competitors” have remained flat.

AEMO’s executive general manager of system design, Merryn York, said GenCost was one of several key reports to help inform the continuous design of a sustainable electricity system for Australia.

“The annual collaboration with industry to assess electricity generation costs is critical to strategic planning and policy analysis, including our integrated system plan,” Ms York said.

GenCost lead author, CSIRO’s chief energy economist Paul Graham, said assumptions, scope and methodology were adjusted in response to constructive feedback received throughout the year.

“For example, our approach to the inclusion of large-scale nuclear technology provides a logical, transparent and policy-neutral method of costing a potential deployment scenario in Australia,” Mr Graham said.

GenCost based its large-scale nuclear cost estimations on South Korea’s successful nuclear program and adjusted for differences by studying the ratio of the costs of new coal generation in each country.

The costs estimated in the report can only be achieved if Australia commits to a continuous nuclear building program, requiring an initial investment in a higher cost unit.

GenCost also found inflationary pressures had considerably eased, but with the impact inconsistent across technologies.

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Patrick Sims7:44 pm 01 Jun 24

I trust career scientists/economists over politicians every time.

The CSIRO are staking their reputation (and livelihood). They do not have any political affiliation. Their facts do not care about your feelings.

Politicians (Dutton and co) simply want to distract you so their mates can keep coal plants running.

IEEFA has just recently came out with a report that found SMR were more expensive and dangerous. Further vindicating the draft GenCost report in December that Dutton attacked.

Keyboard warriors leaping to the defence of nuclear will always be there with an alternative take. And I’m pro legalising it and believe it is a green technology. But it is expensive. And it is folly.

To @Chris. This very simple. Cost of “cheap” renewables (AEMO costing) is one trillion dollars. Lifespan of a solar farm/wind turbine is max 15 years. Then you pull it down, try and recycle them (but you can’t) and build them again. Cost of a nuclear reactor (AEMO costing again) 8 to 10 billion dollars for a large scale reactor, half that for smaller ones. Lifespan of a reactor 60 to 80 years. By the by Chris modern reactors don’t need refuelling for 30 to 40 years because they use much higher purity uranium which can almost be endlessly recycled. Plus you have obviously NOT heard about a pressurised water reactor? They have no appreciable muclear waste. There, that defeats every single aspect of your alarmist opinions. Anyone interested in the actual cost of reactors for electricity generation I suggest you go onto the AEMO site and just look it up rather than read Chris.

Why do you keep repeating the same incorrect information?

The Gencost report includes increased transmission costs in the assessments and renewables are still cheaper.

Also includes the lifespan data on generators which is not remotely what you claim.

If anyone’s “interested in the AEMO costs”, they’d read the Gencost report that AEMO was a partner in preparing.

The latest CSIRO report highlights the possible CAPEX for a nuclear plant, but fails to look at the ongoing cost of safely storing and securing the radioactive waste for the next 25,000+ years.

Based on overseas estimates, France has a proposal “for €25bn (AUD$40bn),500m underground rock laboratory in eastern France situated in clays and known as the Industrial Centre for Geological Storage (Cigéo). The structure will comprise hundreds of storage tunnels covering a total area of 25km2 and will last for a century”, while the USA has “About 88,000 metric tons of spent nuclear fuel from commercial reactors remain stranded at reactor sites, and this number is increasing by some 2,000 metric tons each year”.

Based on the best-case estimate, with 18 staff working 6 per shift on 3 shifts per day, and 2 managers, just to secure a single waste management site for the next 25,000 years would be (in current $ terms) between $60bn and $120bn dollars. Add to this the cost of establishing the waste management site at the cost of $40bn and the real cost of a Nuclear Plant goes from a best-case cost of $8.5bn to $108bn, and of course you’ll still be spending at best 1.5 – 2 times the cost of renewables.

What’s more, Dutton’s not just suggesting that we commit to nuclear for the life of a nuclear plant (40-100 years), but suggesting that all future generations for the next 25,000+ years bare the cost for the power you are getting the benefit of today (well, within the next 15-20 years, it Australia were to make such a commitment). The gift that never stops taking!

But then again look at the likely costs, versus the best-case outcome, on the building of a nuclear plant and you get a different picture. 

We’ve heard about the NuScale small nuclear reactor plant cancelled in Nov 2023 citing escalating costs for the cancellation, but over the years the USA has had 20+ large scale nuclear plant projects cancelled due to escalating costs. The most recent large nuclear reactor plant (1.1Gw) was cancelled in 2017 when with US$9bn (AUD$13.5) spent and 63% complete the budget requirement to completion increase to a further US$9.8bn (AUD$14.7). So, while the CSIRO have cited a $8bn-$12bn build cost for an 800Mw-1.4Gw facility, in a country with no recent experience with building a nuclear facility, the USA, who has the experience has canned a 1.1Gw project because the total CAPEX cost is AUD$28.2bn.

The nuclear energy companies have long spruiked investment in nuclear plants while under-costing the project to get approvals through, believing that once you’re up to you eye-balls in a hole you’re bound to keep digging – too often they’re right.  The result, the taxpayer wears the cost of these successful failures.

Until the nuclear industry can provide a full-life-cycle cost for nuclear power we should give it a wide berth.

The reason the USA hasn’t put in place a nuclear storage facility is they know the costs are astronomical and taxpayers will be asking why this money is being wasted on waste management and how any government could morally make such a reprehensive commitment for generations to come.

What a great reply. Thanks.

>Until the nuclear industry can provide a full-life-cycle cost for nuclear power we should give it a wide berth

Horse poop.

Carbon industry does it scot free and their targeted campaigns manage to baffle with bullshit when dazzling with brilliance is not an option.

At least nuculear is local pollution, NIMBY has some valid points but local can be controlled.

Global pollution, “Welp not my problem” – that gets a free pass??

Anyway, your assumptions are flawed, we don’t actually need to pay humans to ward into the far future.

That especially applies to renewables don’t you think tK? Renewables NEVER include the cost every 15 years to pull them down and rebuild them. Solar panels by the way mate contain heavy metals and other toxic materials and where are the thousands of hectares of old solar panels going to go…..landfill? Well that’s the lefts plan.

without a doubt, the ones saying that we can successfully transition from fossil fuels to renewables are the same who swear black and blue that other kinds of transitions are legit. Run a million miles from these loons, if anyone out there still has any sense. The science and the scientific institutions are not the same, with the latter clearly being captured by ideology.

@Vasily M
So you accept the science, but not those institutions which enable and promote that science? Yep – up there with your usual standard of (il)logic.

Thats being deliberately obtuse Justsaying. The actual science which is what Vasily mentions does NOT include leftist ideology. The quasi science Australians get fed through biased media is at odds with the actual science. That especially goes for the lifetime and build costs of nuclear reactors. Finland just opened a massive nuclear power generator on cost and under time ( 8 years). The instant the generator opened it sent electricity prices through the floor to the point it’s now only used during the afternoon and night.

You mean the reactor that was meant to open over 10 years ago, has taken 20 years to build and cost $18billion, more than 3 times the initial estimates?

That’s your good news story?

They also had another reactor approved over 10 years ago and it’s been cancelled because they couldn’t get investors to fund and construct it.

Great example.

“The actual science which is what Vasily mentions does NOT include leftist ideology.”
OK, Rob, so perhaps you can point us to the peer reviewed articles of your ‘actual science’?

Look out blackouts here we come.

I don’t trust the politicians and regulators to manage the transition properly.

It sounds like you should sit in a dark corner and worry a lot.

Do you have any other contributions?

Capital Retro12:17 pm 28 May 24

Where are the details of those fossil fuel subsidies? You are long on contributions but short on details.

I responded to your request in the thread in which you requested it, Capital Retro.

Please try to remain relevant here.

As long as you agree that deindustrialisation is the right strategy for Australia’s future, or perhaps simply forgot to consider it, then GenCost is probably right. But if you think having an industrial base is part of a national strategy, rather than passively relying on imports from China forever, it’s probably wrong.

I’m wondering what “industrial base” you think Australia has right now?

Digging stuff out of the ground?

If you are worried about Australia having greater manufacturing and industrial capacity, that ship sailed long ago and is far more than just around energy. To bring back capacity in that area would require massive subsidies and is independent of this single issue.

Capital Retro9:21 am 28 May 24

Basket weaving doesn’t require any energy.

Sounds like you’re pretty happy with an AliExpress economic future. And consigning the rapidly rising population all to that same supine fate. Defeatism is probably the best word for your outlook. Or perhaps capitulation.

Baskets don’t weave themselves CR, so wrong as usual.

Perhaps you can provide some more hot air for heating purposes, Canberra winters can get cold.

Right as usual mate.

I don’t have any confidence in the people overseeing the transition to renewable energy.

They will stuff it up & we will have lots of blackouts.

Too many spin doctors, not enough engineers and the politicians are looking for votes instead of dealing with facts.

Franky22, your point intrigues me, but could you help me with some evidence?

They set dates to close down coal fired stations then keep extending because they need to upgrade poles & wires & interchanges. Pumped hydro is costing 4 times the estimate & taking for ever.
Labor trying to appease the Greenies & Libs appeasing coal interests. Some states own the power generation while other states have privatised.
It’s an unholy mess.

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