All energy costs rise but small nuclear most reactive
Small nuclear reactors are by far the most expensive new build energy-generating projects, a study has found, while renewable sources remain the cheapest.
Next-generation nuclear reactors are the most expensive of all energy-producing technologies, a report has found, and would significantly increase electricity prices in Australia.
Establishing a large-scale nuclear power plant for the first time would also require more than double the typical costs, and estimates for wind projects had inflated by four per cent due to unforeseen requirements.
The CSIRO, Australia’s national science agency, released its GenCost report on Tuesday, revealing rising construction and finance costs would push up prices for energy projects of all kinds in the coming years.
The findings come after a heated debate about introducing nuclear power to Australia and after members of the federal coalition questioned the nation’s reliance on renewable energy projects to achieve net zero by 2050.
The final GenCost report for 2024-2025 analysed the cost of several energy-generating technologies, including variations of coal, gas, nuclear, solar and wind projects.
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Renewable technology continued to provide the cheapest energy generation, the report’s lead author and CSIRO chief energy economist Paul Graham said.
“We’re still finding that solar PV and wind with firming is the lowest-cost, new build low-emission technology,” he told AAP.
“In second place is gas with (carbon capture storage) … then large-scale nuclear, black coal with CCS, then the small modular reactors.”
Small modular nuclear reactors proved the most expensive technology of the eight options by a large margin, with the report basing its costs on Canada’s Darlington nuclear project, announced in May.
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The 1200-megawatt development is estimated to cost $23.2 billion and will be the first commercial small modular reactor built in a Western country.
The new reactors produce one-third the power of typical nuclear reactors and can be built on sites not suitable for larger plants, but have only been built in China and Russia.
“This is a big deal for Canada – it’s their first nuclear build in 30 years,” Mr Graham said.
“It’s not just about meeting electricity demand … they’ve said a few things that indicate they’re trying to build a nuclear SMR industry and export the technology.”
In addition to the cost of different technologies, the report estimated “premiums” for establishing first-of-a-kind energy projects, with the first large-scale nuclear project expected to command 120 per cent more and the first offshore wind development expected to cost an extra 63 per cent.
The cost of wind projects also grew by four per cent as researchers factored in building work camps to accommodate remote employees, and capital financing costs rose by one per cent.
Developing energy projects was also expected to cost between six and 20 per cent more by 2050, the report found, due to the rising price of materials such as cement and wages, as detailed in a report by Oxford Economics Australia.
Findings from the CSIRO report would help inform the design of future energy infrastructure, Australian Energy Market Operator system design executive general manager Merryn York said.
“We’ll use the capital costs for generation and storage from GenCost in the upcoming Draft Integrated System Plan in December,” she said.
Nuclear technology is banned as an energy source in Australia, which has a target of achieving 82 per cent renewable energy in the national grid by 2030 and reaching net zero by 2050.
-with AAP
