Part 2 of 2 Parts (Please read Part 1 first)
Nuclear advocates claim that Australia has no choice. They say that wind and solar are intermittent power sources. They claim that the cost of making them reliable is too high.
Here is a comparison of the cost of reliably delivering a megawatt hour of electricity to the grid from nuclear power versus wind and solar power. According to the Commonwealth Scientific and Industrial Research Organization (CSORO) and energy market analyst Lazard Ltd, nuclear power has a cost of one hundred and forty dollars to two hundred and thirty dollars per megawatt hour produced.
Without subsidies or state finance, the four plants mentioned above generally meet or beat the high end of this range. In contrast, Australia is already building wind and solar plants at under forty-five dollars and thirty-five dollars respectively. This is about one tenth of the cost of nuclear power.
The CSIRO has also estimated the cost of renewable energy that has been made reliable, mainly by batteries and other storage technologies. Australia could build a renewables grid big enough to meet current demand twice over and still pay less than half the cost of nuclear power.
Proponents of nuclear power say that small modular reactors (SMRs) offer the possibility of being produced at scale. This may finally allow nuclear power to harness Wright’s law.
However, commercial SMRs are still years from deployment. NuScale is a U.S. SMR company. It is scheduled to construct two nuclear power plants in Idaho by 2030. Ground has not yet been broken for these projects, but the on-paper costs have already risen to about one hundred and ninety dollars per megawatt hour.
SMRs are still decades away from broad deployment. If early examples work well, in the 2030s there will be a round of early SMRs in the U.S. and European countries that have existing nuclear skilled workers and nuclear supply chains. If that goes well, there may be a serious rollout from the 2040s onwards.
In these same decades, solar, wind and storage will still be descending the Wright’s law cost curve. Last year the Morgan administration was promoting the goal of getting solar below fifteen dollars a megawatt hour by 2030. SMRs would have to achieve inconceivable cost reductions to be economically competitive.
SMRs might be necessary and competitive in counties with no renewable energy resources. However, Australia has the richest combined solar and wind resources in the world.
The big question is whether Australia should lift its ban on nuclear power. A repeal would have no practical effect on what happens in electricity markets. However, it might have important political effects.
A future Australian leader might seek short-term advantage by offering huge subsidies for construction of nuclear power plants. The true costs would arrive years after any such leader had left office. That would be a disaster for Australia. With unmatched solar and wind resource, Australia has the chance to deliver the cheapest electricity in the industrial world.
Mr. Dutton may be correct that the ban on nuclear energy is not necessary. However, in terms of getting to net zero emissions as quickly and as cheaply as possible, Mr. Bowen has the relevant argument. One assessment from the U.K. said nuclear power for Australia would be “economically insane”.