The Coalition told the CSIRO to re-do its nuclear report. It’s bad news for Dutton
Proponents consider these factors crucial to reflect the real-world benefits of nuclear power plants and have argued that renewables get an unfair advantage when they are not adequately reflected in modelling.
CSIRO accommodated these requests and still found the cost of nuclear energy was significantly higher than “variable renewables”, namely wind and solar power backed up with batteries and a major transmission-line rollout.
“The cost range for variable renewables with integration costs is the lowest of all new-build
technology capable of supplying reliable electricity in 2024 and 2030,” GenCost said.
The ratio of how long an energy generator is operational compared with sitting idle, known as the capacity factor, is key to the cost of its energy.
O’Brien claimed in May that CSIRO modelling should use the United States’ average capacity factor for a nuclear plant of 93 per cent.
In responding to O’Brien, CSIRO said it was appropriate to use a range of capacity factors, given the 15 coal plants in eastern Australia ran on average 60 per cent of the time and a nuclear plant would slot into the grid as a replacement for coal.
CSIRO’s modelling showed that, adjusted for Australian conditions, a traditional large-scale nuclear plant that was operational 90 per cent of the time would generate electricity at $155 a megawatt hour. With a utilisation rate of 53 per cent, it would cost $252 a megawatt hour.
In contrast, wind farms would generate power at $56 to $96 a megawatt hour, using a conservative range of capacity factors based on how often they were expected to run. Under a similar calculation, solar farms would generate power for between $35 and $62 a megawatt hour.
O’Brien’s second contention, that CSIRO should factor in an 80-year life span for a nuclear plant, rather than the 30-year life it assumed, made the economics more favourable because there was more time to repay loans.
CSIRO ran the numbers for a plant over 60 years. It found this would deliver a discount of 11 per cent on the original cost. However, most of this saving would be gobbled up by refurbishment costs, typically about $3 billion, needed when a plant was 40 years old.
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The figures would be similar for a 100-year-old plant because it would need several refurbishments.
“Long-term operation of nuclear is not costless,” GenCost said. “Extension costs are incurred and are significant.”
CSIRO found a grid with 90 per cent renewables would produce electricity for between $106 and $150 a megawatt hour, including $40 billion in expenditure on the rollout, with new transmission lines as well as batteries and gas plants to back up wind and solar farms.
While GenCost provided a range of projections, the above costs were calculated in today’s dollars and assumed the current price of construction.
GenCost uses a levelised cost of energy calculation to price energy from various technologies. This represents the price needed for an electricity generation plant to earn back the cost of its construction and running costs over its lifespan.
CSIRO will update its GenCost report based on further feedback from stakeholders.
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