Peter Dutton’s speech to CEDA on nuclear power is yet to provide an explanation for how a future Liberal-National Coalition Government can avoid the extremely high nuclear reactor construction costs encountered by countries in Europe and North America.

A report released on Friday by the Institute of Energy Economics and Financial Analysis found that Australian household power bills would be likely to increase by $665 AUD per year to cover the cost of nuclear reactors. This was based on analysis of the construction cost experience of real-world nuclear reactor projects committed to construction over the past 20 years in the European Union and North America. It also considered tender contract prices submitted for small modular reactor and Korean reactor designs.

Lead Energy analyst at IEEFA, and co-author of the report, Johanna Bowyer observed:

“Our research found that all projects commencing construction in the past 20 years in in the US and Europe experienced major budget blowouts up to three and a half times original capital costs, as well as construction delays of many years.”

“Small modular reactors (SMRs), which are often cited as a solution to resolve the nuclear industry’s cost and construction time problem, remain costly and unproven, with no reactors in operation in the OECD. The reactor closest to becoming a reality, NuScale, was cancelled due to cost blowouts.”

“For nuclear power plants to be commercially viable without government subsidies and generating 24/7 – as the Coalition proposes – electricity prices would need to rise by one and half to four times higher than current wholesale electricity costs in eastern Australia. This would then be passed through as higher power bills for households.”

Bowyer stated, “We calculated that if the nuclear power plants were to recover their costs through our wholesale electricity market, then household bills would need to go up by $665 per year for a household with typical power usage.”

“For a 4-person household which uses more power than the typical household, then bills would increase by $972 on average. Meanwhile a 5-person household could expect a bill increase of $1182.”

Tristan Edis, co-author of the report added, “In the CEDA speech there was reference to countries that have old nuclear reactor fleets and supposedly have low power bills, but this neglects the very substantial costs these countries faced which have since been written-off. It is not relevant to a situation in which Australia would build nuclear power plants from scratch.”

“Ontario is being used as an example with low bills – but this ignores the fact that Ontario’s public utility encountered severe financial difficulties in the 1990’s accruing debts equal to AUD $70 billion in today’s dollars.  Ontario consumers were subsequently saddled with a “Debt Recovery Charge” for 16 years. This is no longer on their bills, but they are still poorer because of it.”

Dutton’s claim that the very high construction costs of nuclear reactors are offset by a long lifetime is also economically suspect.

Edis observed, “Houses last a very long time, but that doesn’t mean householders’ budgets aren’t affected by the combination of high interest rates and the high cost of housing. The same principle applies to nuclear power plants.”

Bowyer added, “Our analysis of power bill impacts was based on a 60-year economic lifetime for nuclear, without refurbishment costs, which is highly optimistic. The real-world examples we examined might have claimed lifetimes of 60 years. However, even a 60-year life will require multi-billion-dollar refurbishment costs at around the 30 year mark. An 80-year amortisation period, as mentioned in the CEDA speech, is not realistic without significant additional refurbishment costs.”

“Introducing one of the most expensive forms of power into the Australian market could only make the cost of living even more difficult.”

Featured comment – Ben Marshall, 24 September 2024

The Coalition’s ‘nuclear policy’ is absolute genius

While Gina Rinehart’s party has done the level of research I’d lazily manage before buying a pair of shoes online, the media and the other political parties have been brilliantly misdirected, and are entirely focused on the pros and cons of nuclear energy in Australia. Next-level genius.

Absolutely no one is addressing the realities of nuclear. No, it’s not about the cost. No, not waste. No, not nuclear proliferation. No, not all the half-baked lies that the Coalition are using to sell the nuclear con – ‘jobs n growth’.

While everyone’s focused on nuclear, the actual ‘policy’ is the rapid expansion of support to the fossil fuel corporations running Australia, a rapid expansion of fossil fuel use, and the removal of government support for renewables – solar, wind and the associate transmission. We’ll pay for the private companies to get their electrons into the grid and start making profits.

The Coalition are running a far Right-aligned anti-renewables campaign outside cities, which doesn’t get reported in those cities. They’re linking up with community groups who have genuine, legitimate concerns about the renewables and transmission industries (communities and the environments are being railroaded for private profit), co-opting those concerns with sympathetic-sounding public support, and connecting with the anti-climate science, anti-vax, ‘freedom movement’. This also doesn’t get reported in cities.

It’s all about votes for the Coalition, off the back of rural and regional backlash that starts out legit, then falls in sync with the anti-renewables deniers, with the strategic political support of those nice Liberal and LNP chaps.

The Coalition don’t accept climate science. Nowhere will they offer support for action on climate-biodiversity – that’s ‘greenie bullshit’ they wouldn’t touch with a shitty stick. They couldn’t care less that their war on renewables, on Gina’s behalf, will kill even the smallest moves on addressing climate.

Building nuclear in Australia? Ha! Who will build it for us? China? France? The US? How about when the US and UK finish building us the AUKUS subs? Maybe they’ll have time to send a few FIFO engineers down to whip a few plants up for us. It’d take us a generation to send our people to work and train overseas before there was a single job for us in building or running nuclear plants. The best we could hope for is some blue-collar jobs on the security gate or spraying the weeds along the fence-line.

It’s not the cost of nuclear (and believe it or not, there are rational arguments for nuclear to replace renewables in the latter decades of this century), but the pragmatic realities of getting any built here. The SMRs are just silly; even if you’re pro-nuclear; they don’t have the efficiencies we’d need. But the big ol’ nuclear plants have got as much chance of being built by some grifting bigger nation as AUKUS subs have being delivered on time and on budget.

There are arguments to consider nuclear in the long-term future, but that’s 100% not what the Coalition are doing. They’re trolling Labor with ease and brilliance, while cynically harvesting the groundswell of rural and regional resentment of bad governance and corporate state-control.

When the Coalition get back in, they’ll ‘action’ the nuclear plan, kicking the can down the road to give ‘the experts’ time to come up with a plausible scenario while the government fling open the door to acceleration of exploration, extraction, sale and use of fossil fuels ‘to transition us to nuclear.’

The media, our political parties, and our communities are being utterly hoodwinked by a brazen lie that should be, but isn’t, demolished with ease. We need new media, and more independent politicians.