3. Cost of nuclear power generation in Australia
   1. This chapter explores evidence the Committee received on the potential cost of deploying nuclear power generation in Australia.
   2. Specifically, this chapter considers evidence on:

• cost estimates for the deployment of nuclear power in Australia in light of factors determining deployment cost estimates applicable to the Australian context;
• the risk of cost blowouts during construction and various critical costs not factored into current estimates that would need to be further interrogated to understand the full cost of nuclear power generation in Australia; and
• the appetite for private investment in the nuclear power industry.
  3. The chapter concludes with Committee comment on the issue of costs for the deployment of nuclear power generation in Australia.

Cost estimates and influencing factors

Deployment cost estimates

3.4The Committee received evidence on cost estimates for nuclear power deployment in Australia, much of which included comparisons to the cost of other power generation technologies.

3.5In its submission, SMR Nuclear Technology Pty Ltd listed various capital costs for recent nuclear builds:

The capital cost of a nuclear power plant built since 2000 varies between A$4,323/kW in South Korea to A$20,883 in the UK [United Kingdom], average cost A$9,574/kW. For comparison, the GenCost 2023-24 report Table B.9 lists the 2023 cost of a large reactor as A$8,655/kW.[1]

3.6SMR Nuclear Technology Pty Ltd also pointed to:

Modelling by the Australian consultancy Electric Power Consulting of Kiama in 2018 showed that the cost of a system with 100% renewables would be more than 4 times the cost of a system where coal was replaced by nuclear.[2]

3.7However, comparing the cost of renewables with nuclear power, Mr Kane Thornton, Chief Executive Officer (CEO) at the Clean Energy Council also told the Committee that ‘nuclear power has a materially higher cost than the alternatives here in Australia’.[3] Similarly, Australian Council of Trade Unions (ACTU) submitted nuclear power ‘is at least twice and up to six times more expensive than the cheapest sources, wind and solar’.[4]

3.8When he appeared before the Committee, Dr Peter Mayfield, Executive Director, Environment, Energy and Resources at Commonwealth Scientific and Industrial Research Organisation’s (CSIRO) referred to the GenCost 2023-2024: FinalReport’s (GenCost) cost estimates for nuclear deployment.[5] He explained the report does two things:

One is that we provide updated estimates and projections on the capital cost, and then we also do a fairly simple levelised cost electricity analysis, which is looking at what it costs to recover your capital—the cost of selling electricity to recover your capital. That's what's reported in GenCost, and that number would be higher than currently for firmed PV and solar.[6]

3.9In their submission, the Electrical Trade Union of Australia (ETU) included their Nuclear Energy Report, which noted GenCost:

… estimates that building a 1,000-megawatt nuclear reactor in Australia would cost up to [A]$17 billion. This is 1.5-3 times the cost per kw/h of coal and 4-8 times the cost per kw/h of solar, when considering ‘first of a kind’ premiums.[11]

3.10However, Dr Adrian Paterson, Founder and Principal, Siyeva Consulting was critical that GenCost is ‘based on the levelised cost of electricity’ which he suggested should not be relied on.[12]

3.11Similarly a joint submission on behalf of Macquarie University’s Transforming Energy Markets Research Centre (TEM) focused on a ‘total system cost’ and was critical of ‘The use of the Levelised Cost of Energy (LCoE) metric to compare one generation technology with another in a vacuum, rather than as parts of a system’.[13] They cautioned that in thinking about power costs, ‘Discounted cash flow methods (including NPV and LCoE) must be used with great care and are neither investment-grade nor policy-level single-metric decision tools’.[14]

3.12Mr John Grimes, CEO, Smart Energy Council also reflected on the estimates in GenCost. Referring to the Federal Coalition’s (the Coalition) proposed plan, Mr Grimes advised the Committee that:

Based on the CSIRO and AEMO's 2024 GenCost report, the capital cost for replacing those 11-gigawatt-capacity coal-fired stations with five large nuclear reactors and two small nuclear reactors in 2030, the proposed but unrealistic timeframe, would be, at a minimum, $116 billion.[15]

3.13Mr Grimes also explained the Smart Energy Council had modelled the nuclear proposal from the Coalition and found that the cost could actually be up to ‘[A]$600 billion’. He added:

In fact, we think it could probably be more than that. That is a cost that's going to go onto the power bills of everyday Australians. If the coalition is interested in the cost of living, in electricity bills and in bringing costs down for the Australian people, this is the very last thing the government would do. It's outrageous to subsidise nuclear energy and to retard and hold back renewable rollout and investment.[16]

3.14Building on the analysis by the Smart Energy Council, the Climate Council of Australia considered the cost of a nuclear build and the amount of power generated compared to other power sources in its submission. It stated:

Across Australia, building 11 GW of nuclear capacity would cost at least $116 billion, and up to $600 billion dollars (Smart Energy Council, 2024). But despite this price tag, nuclear wouldn't provide anywhere near the amount of electricity we need. For example, nuclear reactors would only provide about 15% of the power needed in the NEM by 2050, at a minimum cost of approximately $105, and up to $540 billion. Australia’s current plan can meet 100% of our electricity needs for $383 billion, while nuclear would meet less than one-sixth, for a minimum of $105 billion...[17]

3.15The submission from the Climate Council of Australia also included a graph (see Figure 3.1) that showed, ‘Building nuclear reactors would provide less than one-sixth of the generation we need, at a cost of over $100 billion’.[18]

Source: Climate Council of Australia, Submission 428, p. 15.

3.16The Clean Energy Council submitted that:

… nuclear power represents the highest cost electricity generation option for Australia across several factors including levelized (sic) cost of electricity (LCOE) and total cost of technology deployment.[19]

3.17The submission included the below graph (Figure 3.2) showing the difference in costs between different sources of power:

Figure 3.2.Comparative cost per megawatt hour of different energy technologies

Clean Energy Council, Submission 230, p. 4.

3.18The Committee received further evidence on the impact of the cost of the deployment of nuclear power on power bills.

3.19Ms Johanna Bowyer, Lead Analyst, Australian Electricity, Institute for Energy Economics and Financial Analysis (IEFFA) told the Committee that ‘Nuclear is one of the most expensive forms of electricity generation’,[20] and pointed to analysis published in IEFFA’s September 2024 report, Nuclear in Australia would increase household power bills, that showed the deployment of nuclear power would increase ‘household electricity bills an average of [A]$665 per year’.[21]

3.20IEFFA’s submission also referred to its report’s other finding that ‘The cost of electricity generated from nuclear plants would likely be 1.5 to 3.8 times the current cost of electricity generation in eastern Australia’.[22] It included graphical analysis of the impact on household electricity bills in countries that have adopted nuclear power (see Figure 3.3).

Source: IEEFA, Submission 7, p. 4.

3.21The Committee received evidence on the cost feasibility of integrating nuclear power into a firmed ‘high-VRE [variable renewable energy] grid’.[23]Ms Bowyer of IEFFA advised the Committee:

One of the challenges with nuclear is that it needs to run almost all the time in order for its financials to work out. If it runs at a lower capacity factor, then the average cost of electricity from those plants is extremely high. So it doesn't actually complement a renewables based grid very well because renewables are variable. We want more dynamic energy resources to complement those renewables and bring the overall system cost down.[24]

3.22The Climate Council of Australia noted ‘the federal Coalition has indicated that nuclear reactors would run on a continuous basis close to their maximum capacity’.[25]Further, it speculated that to recoup on the ‘operational and capital costs [of nuclear deployment], the government may need to force renewables to be turned off to accommodate nuclear generation, and/or guarantee a particular price for nuclear generation’.[26]

3.23The ACTU posited that nuclear power generation could ‘forc[e] millions of Australians to turn off their cheap rooftop solar, a double blow during a cost-of-living crisis’.[27]

Factors impacting on cost estimates for Australia

3.24This section canvasses evidence from submitters and witnesses on some of the key factors that would impact on timeframes for Australia, including:

1Jurisdictional factors such as Australia’s democratic political ideology and lack of ‘experience in building or operating nuclear power plants’;[28]

2The reactor design chosen and its build history; and

3The scale of a potential nuclear program in Australia.

Jurisdictional factors

3.25In its submission, the Australian Nuclear Science and Technology Organisation (ANSTO) noted the International Atomic Energy Agency’s (IAEA) guidance that, ‘the costs of new nuclear power plants are highly specific and vary across countries’.[29]

3.26SMR Nuclear Technology Pty Ltd’s submission explained nuclear build costs are influenced by country specific factors, including labour and material costs and the efficiency of the country's regulators.[30]

3.27During his appearance, Mr Gerard Holland, CEO at the Page Research Centre stated that costs of nuclear builds in the United Arab Emirates and South Korea were ‘cheaper than what GenCost predicts’.[31] As noted in Chapter 2, some witnesses suggested that countries that have different political ideologies and labour conditions to Australia may not be directly applicable for making estimates for the Australian context.[32]

3.28On the impact on cost from the nuclear maturity of a jurisdiction, ANSTO submitted ‘the IAEA advises that the costs of new nuclear power … will reduce with the maturity of a country’s nuclear industry’.[33] The Australian Energy Council noted ‘International experience indicates nuclear project costs can escalate significantly, especially when building for the first time’.[34]

3.29Mr Paul Graham from CSIRO informed the Committee that GenCost found countries like Australia, which lack recent experience in nuclear power, may face higher costs due to a 'first-of-a-kind premium,' that ‘can be up to 100 per cent’.[35]

3.30Mr Simon Holmes à Court, an Australian businessperson and political activist, also advised the Committee that ‘Even with a mature design, the first [reactor] built in Australia would encounter significant first-of-a-kind costs. A 100 per cent premium would not be unusual’.[36]

3.31Professor John Quiggin, appearing in a private capacity, told the Committee that currently, ‘the economics simply don't favour new nuclear power plants’.[37] On small modular reactors specifically, he advised, ‘the economic risk is that no project of this kind has ever been constructed [in Australia]. First-of-a-kind projects have a huge range of issues’.[38]

Choice of design

3.32SMR Nuclear Technology Pty Ltd stated that nuclear build costs vary based on design factors including supply chain efficiency, reactor type and modularisation, if the design is completed prior to construction, and whether the reactor is a First of a Kind (FOAK).[39]

3.33On choice of design, the Australian Nuclear Association compared the costs of recent international projects. It stated in its submission that while there had been ‘cost overruns’ in ‘recent construction of some first-of-a-kind power reactors in Finland, France and the USA [United States of America]. … Nuclear power reactors built in China, South Korea and United Arab Emirates [UAE] have been built on time and at much lower costs’.[40]

3.34In his testimony, Mr Shaun Jenkinson, CEO of ANSTO noted, ‘first-of-a-kind of anything is always subject to a bit of variability. As these things become developed, they come down in cost’.[41]

3.35The Australian Nuclear Association recommended:

Nuclear power plants for Australia should have identical reactors built in sequence and of a design already built and licensed overseas. It will be important for the Australian nuclear regulator to approve the design before construction starts.[42]

3.36Ms Patty Durand, President, Cool Planet Solutions expressed scepticism about the claim that nuclear costs will be reduced following FOAK builds:

I hear a lot of people saying that this [Vogtle] was a FOAK—a first-of-a-kind— and that future AP1000s [large reactors] would be less expensive because we've learnt how to do it now and we have the design completed. None of that is true.

Nuclear energy is the only technology that has never gone down in cost. It has always gone up, unlike renewables like wind and solar, which have dropped 90 per cent in the last 10 years; storage, which has also dropped precipitously and the technology has improved tremendously; and other programs that are part of the modern grid now...[43]

3.37Mr Graham of CSIRO similarly noted that ‘the cost of solar has dropped by about 90 per cent since 2010, and the cost of wind by about 75 per cent’.[44] In contrast, Mr Rod Campbell, Research Director at The Australia Institute, testified that ‘Nuclear energy has not declined in cost or utility’.[45]

3.38In his testimony, Mr Holmes à Court reflected on the design assumptions behind costings for the deployment of nuclear in Australia from the GenCost 2024-25 Consultation Draft published in December 2024, which ‘listed a nuclear nth-of-a-kind cost of nearly [A]$9,000 a kilowatt’.[46]

3.39Mr Holmes à Court referred to speculation that the nearly A$9,000 figure was ‘too high and we should be using costs that are 60 per cent lower’.[47] In his view, the GenCost estimates underestimate the potential cost of nuclear deployment in Australia because, ‘CSIRO is not presenting next-of-a-kind but rather nth-of-a-kind’.[48]

3.40Mr Holmes à Court explained ‘Nth-of-a-kind is the cost you pay when there is a warm supply chain—one that has built a number of units without delays between, one after the other after the other’.[49] He observed:

CSIRO's modelling [in the GenCost report] is very simplistically based on the experience of South Korea, which has enjoyed a well-established nuclear industry that has constructed 30 reactors over almost 50 years.[50]

3.41To support his view, Mr Holmes à Court cited ‘a recent MIT study [that] confirms that CSIRO is in the ballpark of NOAK, or nth-of-a-kind, but they estimate the next-of-a-kind units would cost between A$13,000 and A$16,000 per kilowatt, and that's with a warm supply chain’.[51] Factoring in the potential ‘100 per cent premium’ FOAK cost for new countries commencing a nuclear program, he concluded:

… if the cost of [Australia’s] first unit were double CSIRO's nth-of-a-kind [estimate], it would be the cheapest nuclear built in the Western world this century.[52]

Small Modular Reactor designs are not yet commercially viable and costs are uncertain

3.42The Committee also received evidence on the estimated cost to build Small Modular Reactors (SMRs) in Australia specifically.

3.43The Committee heard there is increasing private sector interest in SMRs. Nuclear Energy Institute submitted:

… U.S. companies are pursuing plans [that] are centered on reactor[s] that are smaller and more modular. These simpler designs should enable shorter construction and enable projects to come online more quickly, reducing capital costs.[53]

3.44Rolls Royce SMR Limited submitted that their ‘factory-built’ designed SMRs are ‘more affordable, can be co located closer to infrastructure or demand centres, have shorter build times and reduced financing costs’.[54] However, in their submission, the Blueprint Institute stated that:

In 2019, the Rolls-Royce SMR prototype was estimated to cost £1.5 billion—but this number has blown out to £4.37 billion in 2022. The NuScale reactor has faced similar cost blowouts.[55]

3.45Mr Gerard Holland of the Page Research Centre also acknowledged that, ‘whilst SMRs are exciting, they aren't necessarily the cheapest pathway for Australia’.[56] He advised that large nuclear reactors ‘seems to be the most cost-effective way to do it’.[57]

3.46The Blueprint Institute criticised claims that SMRs could be ‘much less expensive to build than traditional nuclear power plants’, noting:

… in energy production what matters is not the cost per plant, but the cost per megawatt of generation capacity. Thus while it may be cheaper to build one SMRs than a traditional reactor, they also produce less energy, thus, the per unit cost of producing energy for SMRs as measured by LCOE for SMRs is higher, approximately $387/MWh-641/MWh than for large-scale nuclear power which was $155/MWh-252/MWh in 2023.[58]

3.47In their submission, the ETU included their Nuclear Power Report which stated that the cost of energy produced by SMRs is ‘forecast to be vastly more expensive than energy produced through any other means, with the CSIRO estimating that it would cost [A]$28,581 per kilowatt’.[59] The report explained this cost is:

… nearly eighteen times more expensive than energy produced by large-scale solar, and more than double that of energy produced by coal - that is, assuming Small Modular Reactors ever become commercially viable in the first place.[60]

3.48The Clean Energy Council pointed to the GenCost report finding that SMRs ‘would be the highest cost solution for supplying Australia’s electricity needs’.[61] They elaborated:

We acknowledge it is difficult to estimate the final LCOE produced by theoretical SMR technology however, CSIRO acknowledged it is likely that Australia would experience higher costs due to the absence of an existing nuclear industry.[62]

3.49The Clean Energy Investor Group also noted SMRs are not ‘commercially viable in any Western country’.[63] They submitted:

The lack of SMR development in Western nations means there is no proven evidence of their secure, reliable operation or feasibility. Additionally, there is no data available to support claims about SMR operating costs when used as operating power stations.[64]

3.50In his submission, Professor Quiggin also noted that the ‘profusion’ of SMRs designs means there are not yet cost efficiencies from the large-scale production of specific SMR designs that ‘capture the entire market’.[65]

3.51Boundless Earth submitted that as SMR technology ‘remains largely theoretical and unproven at scale’ it is an ‘unreliable solution for Australia's immediate power needs’.[66] It summarised, ‘The promise of SMRs delivering quick, cost-effective nuclear power is not supported by real-world evidence’.[67]

Scale of program and potential for efficiencies

3.52The Committee received evidence contemplating whether the cost of nuclear power deployment may reduce over time or over different project scales.

3.53Appearing in a private capacity, Ms Helen Cook, a nuclear power consultant, posited that time and cost efficiencies can be achieved from a ‘fleet approach’ where if by ‘build[ing] the same technology over and over and over again, time to build comes down and cost comes down’.[68]

3.54Similarly, the Nuclear Energy Institute submitted that ‘The experience in countries that have had sustained programs of new construction, such as Japan and South Korea, have seen much lower deployment costs’.[69]

3.55Offering an opposing view, in its submission, IEFFA stated, ‘there will be limited scope to achieve learning-based cost reductions like those seen in a large continuous build program’ due to the ‘small size of any potential Australian nuclear build out program’.[70]

3.56Further, the Josephite Justice Office submitted that while there may be some cost savings from reusing coal power infrastructure, ‘no coal power plants have been repurposed as have nuclear plants in the US or the UK, so purported synergies and cost savings are speculative’.[71]

History of cost blowouts for nuclear builds

3.57Various submitters raised the history of ‘cost blowouts’,[72] in the nuclear power sector. Mr Graham of CSIRO advised that while cost blowouts ‘can happen to any technology’:

The nuclear industry is maybe just a little bit more susceptible because it’s such a long lead time and long construction period that circumstances can change during the construction...[73]

3.58Mr Holmes à Court referred to analysis by Danish megaproject expert Bent Flyvbjerg, which showed, ‘billion-dollar projects habitually blow out in cost and schedule. In [the] list of 25 project types, nuclear power comes in as the third worst, with an average cost overrun of 120 per cent’.[74]

3.59In its submission, IEFFA stated the ‘capital costs (excluding financing costs) of recent nuclear power builds have tended to blow out by a factor of between 1.7 and 3.4’.[75]

3.60Mr Grimes of the Smart Energy Council detailed time and cost blowouts in recent nuclear builds in experienced nuclear countries overseas:

In the UK, the cost of the Hinkley C nuclear plant currently under construction has now blown out to $92 billion for a single nuclear reactor. It was originally promised in 2007. Britons were told that they would be cooking Christmas turkey with nuclear energy by 2017. It's now hoped that that project will come online not in 2017 but in 2031. This is a country that has done nuclear for a very long time. In the US, the Vogtle nuclear power station had a $45 billion cost for a single reactor. It was seven years late and $17 billion over budget.[76]

3.61Reflecting on the nuclear build in the UAE, Mr Holmes à Court remarked:

… there is no reliable, verifiable and complete information on the project finances in the public domain, but it is hard to believe that a project can be four years late and yet come in on budget.[77]

3.62In the Nuclear Energy Report, included in their submission, the ETU showed the cost blowouts from recent overseas nuclear builds in the below graph (see Figure 3.4).[78]

Source: Electrical Trade Unions of Australia, Submission 396, p. [14].

3.63Factoring in the impact of cost blowouts on estimates, Mr Grimes of the Smart Energy Council cautioned:

So what we see right around the world is that the costs are enormous, the engineering risks are extreme and the timeframes blow out. In the Australian context, we actually think that closer to a trillion dollars is an absolutely defensible estimate based on what we're learning more and more.[79]

3.64Using the Smart Energy Council’s ‘cost estimates of [A]$116 billion and [A]$600 billion respectively’, the Climate Council of Australia calculated:

If funded through tax, nuclear reactors would cost Australia’s 13.6 million taxpayers at least [A]$8,562 each, and up to [A]$44,118, if Australia saw the cost blowouts common in other countries.[80]

3.65The Clean Energy Council noted recent cost blowouts in ‘countries with established nuclear industries’.[81] They cautioned:

Even though it is difficult to estimate the capital cost to deploy technologies that we do not have in Australia, we can observe the current risk and costs of large-scale nuclear generation deployed overseas.[82]

3.66Professor Quiggin flagged the risk that Australia will, ‘repeat the experience of other countries that have attempted this and the projects [Australia will] engage in will have massive cost overruns and perhaps be abandoned altogether’.[83]

Estimates do not account for other critical costs

3.67Appearing in a private capacity, Mr Theo Theophanous, former energy and industry minister for the state of Victoria between 2002 and 2009, told the Committee that he did not think nuclear ‘can be justified even on a cost basis right now’.[84] He speculated that ‘some of the costs that have been put up by the CSIRO and other bodies don't take into account the full costs’.[85]

3.68Mr Graham of CSIRO confirmed that ‘Anyone who reads GenCost and looks at the levelised costs of electricity needs to know that there may be additional costs, such as decommissioning, that aren't included’.[86]

3.69In its submission, the Clean Energy Council referred to analysis it had commissioned from Egis comparing the levelised cost of power across different technologies that:

… confirmed large-scale nuclear energy is up to six times more expensive than renewable energy and that nuclear may be even higher cost than currently forecast as waste management and plant decommissioning have been omitted by previous cost calculation research.[87]

3.70On the cost of managing nuclear waste, Dr Jim Green, National Committee Member, Australian Nuclear Free Alliance, told the Committee that ‘The South Australian royal commission estimated a cost of about [A]$140 billion for the establishment and long-term operation of a deep underground repository for high level nuclear waste’.[88] He put forward that for waste, ‘Around the world, in countries like France and the UK, they've made very little progress, and their cost estimates double and double again’.[89]

3.71Emergency Leaders for Climate Action also submitted that cost estimates likely do not include ‘nuclear power station emergency planning and management’, and noted:

… States and Territories would be faced with significant costs purchasing land, building new fire stations, purchasing specialised fire engines and hazardous materials response equipment, then staffing the new stations with a minimum of four highly trained firefighters...[90]

3.72On the topic of operation costs, a joint submission on behalf of Macquarie University’s TEM Research Centre similarly submitted the ‘High upfront capital costs of nuclear generation are more than offset by low operating costs and very long operating lives in the order of 60-80 years’.[91]

3.73However, Dr Mayfield of CSIRO noted ‘if you look at the recent retirements of nuclear reactors, most of them have gone about 41 years. I don't believe there's one that's gone for 80 years yet’.[92] His colleague Mr Graham expanded:

For every extra 20 years… after the 40-year life, you've got to reinvest, so you've got to spend more money. So it's not spend the money now and then no more capital to spend for 80 years or 60 years. You've got to keep spending more capital on the life extensions… [I]f you're thinking about it from a consumer's perspective, and if it takes 15 years to build and then 30 years after that there's this supposedly low-cost running period for nuclear, that's 45 years into the future. How do we value that kind of thing for a customer now, if we're going to take a customer perspective?[93]

3.74Ms Durand of Cool Planet Solutions contemplated ongoing maintenance costs during the life of a nuclear power plant and similarly raised the view that:

… nuclear does not last 60 years, that the reactors need a tremendous amount of repair parts, and that to say that they last so much longer than renewables, because renewables last 20, is not counting the repair cost for the nuclear.[94]

3.75Additional costs to establish a robust nuclear workforce and regulatory framework were raised in submissions. The Josephite Justice Office speculated that the ‘introduction of nuclear power to Australia would require the education and training of thousands of nuclear scientists, engineers etc., presumably at taxpayers’ expense’,[95] and the cost of establishing ‘comprehensive safety regulations and enforcement bodies,’ was raised by the Clean Energy Investor Group in its submission.[96]

Private sector investment in nuclear power generation

3.76Various witnesses and submitters reflected on the cost implications of public or private ownership and funding of nuclear reactors, and investment interest in nuclear power in Australia and internationally.

3.77Professor Quiggin noted on the question of government investment of capital in nuclear power that, in general, there has been a ‘substantial state component’.[97]

3.78Similarly, Mr Tristan Edis, appearing in a private capacity, advised the Committee that when it comes to nuclear projects ‘In the Western world, it’s almost always taxpayers picking up the tab’.[98] He explained:

The only people who have the financial wherewithal to bear such large risks are sovereign governments, because it sinks very large corporations—$90 billion, for example, on Hinkley Point C. For most private entities, that is a huge impact on their balance sheet. That's why private sector are reluctant to get involved in these things.[99]

3.79Mr Matt Rennie, Co-CEO, Rennie Advisory, when asked about private sector interest in investing in nuclear power in Australia, replied in the negative, explaining there is a ‘role for government’ due to the ‘need for very long-term power purchase agreements’ often ‘can’t be written by the private sector’ and the ‘very long build time … [has] a long financing obligation’.[100]

3.80Ms Bowyer of IEFFA also told the Committee that ‘We are not seeing any investors lining up to invest in nuclear in Australia’,[101] and suggested:

Investors would definitely have second thoughts once they look at the recent experience with extremely high construction costs, blowouts of up to three times or even more—and that's excluding the financing cost. When financing cost is included, it looks even worse.[102]

3.81Mr Campbell from the Australia Institute told the Committee:

All the modelling trickery in the world can't change the fact that no-one wants to build nuclear in Australia. No-one wants to build nuclear in Australia because of its upfront costs, its inability to compete in the national electricity market as it's currently set up and the huge decommissioning costs.[103]

3.82A joint submission from various church groups expressed concern that advocacy for SMRs ‘appears to be another way the nuclear corporations are seeking government funding for something that will be expensive and slow to develop’.[104]

3.83While the moratorium on nuclear power was posited as a barrier to investment in Australia,[105] taking a global perspective, various witnesses observed that around the world there has been little successful private sector investment in nuclear power, particularly compared to renewables. Professor Quiggin provided US examples:

Westinghouse, the main constructor, went bankrupt and almost took Toshiba with it. Certainly it was a disaster for the investors and a significant cost to the ratepayers. As I mentioned in the case of VC Summer, something like $10 billion was spent and the project was 75 per cent complete and they still decided that it would be better to abandon it than to finish the project.[106]

3.84Looking to the United Kingdom (UK), Climate Councillor Mr Greg Bourne reflected on his experience as a special advisor on energy during the UK’s transition to electricity market privatisation. He noted they ‘could not get rid of the nuclear fleet,’ thus ‘it was kept in government hands and a nuclear levy was put on all suppliers and consumers in order to keep it running’.[107] He summarised:

It was not commercial then. Thirty-five years later, little has changed. It's not commercial now and cannot compete with renewables and storage.

Since that privatisation, the UK has transitioned from 60 per cent coal and 20 per cent nuclear down to zero per cent coal, 30 per cent nuclear and 45 per cent renewable energy—and renewable energy is continuing to grow.[108]

3.85Mr Grimes of the Smart Energy Council gave the example of the government subsidies paid in relation to the nuclear build in Ontario, Canada:

… the nuclear build bankrupted Ontario Hydro. It actually led to provincial government subsidies of more than $8 billion to artificially push power prices down. The public were paying. They were paying not through their power bills but through their taxes, because the price has to be paid.[109]

Committee Comment

3.86The Committee has received a large volume of evidence speculating about the potential cost for deploying nuclear power in Australia.

3.87The Committee heard that nuclear power is costlier to build than the readily available alternatives in Australia, with experts observing that while the cost of deploying renewables is continuing to reduce, they have not seen an equivalent decrease in the cost of nuclear power. The Committee also received compelling evidence nuclear power would cost consumers more to use. The Committee believes the evidence strongly indicated SMR technology is not yet commercially available and so is not a viable option for Australia's energy needs.

3.88International experience demonstrates frequent significant cost overruns for nuclear power projects, and that countries like Australia without prior nuclear experience, may face a 100 per cent cost premium for initial builds. Evidence received about the private sector's lack of interest in investing in nuclear power in Australia and the history of issues with private investment in nuclear power internationally highlights the financial challenges for this source of power, making taxpayer funding of an uncertain nuclear venture during a cost-of-living crisis a significant risk.

3.89While the Committee is aware it does not yet have a full picture of the costs beyond deployment – such as ongoing costs, waste management, decommissioning and emergency management, it is clear from the evidence considered that the deployment of nuclear power generation in the Australian context is currently not a viable investment of taxpayer money.Mr Dan Repacholi MPChair Member for Hunter

Footnotes

[1]SMR Nuclear Technology Pty Ltd, Submission 272, p. 10.

[2]SMR Nuclear Technology Pty Ltd, Submission 272, p. 10.

[3]Mr Kane Thornton, Chief Executive Officer (CEO), Clean Energy Council, Committee Hansard, Melbourne, 4 December 2024, p. 51.

[4]Australian Council of Trade Unions (ACTU), Submission 338, p. 1.

[5]Dr Peter Mayfield, Executive Director, Environment, Energy and Resources, Commonwealth Scientific and Industrial Research Organisation (CSIRO), Committee Hansard, Canberra, 24 October 2024, p. 45.

[6]Dr Mayfield, CSIRO, Committee Hansard, Canberra, 24 October 2024, p. 48.

[7]Paul Graham; Jenny Hayward, James Foster, GenCost 2023–24: Final Report, May 2024.

[8]Paul Graham; Jenny Hayward, James Foster, GenCost 2023–24: Final Report, May 2024, p. 82.

[9]Paul Graham; Jenny Hayward, James Foster, GenCost 2023–24: Final Report, May 2024, pages 27 and 31.

[10]Paul Graham; Jenny Hayward, James Foster, GenCost 2023–24: Final Report, May 2024, pages x, xii and 18.

[11]Nuclear Energy Report, p. 5, included in Electrical Trades Union of Australia (ETU), Submission 396, p. [10].

[12]Dr Adrian Paterson, Founder and Principal, Siyeva Consulting, Committee Hansard, Canberra, 28 October 2024, p. 25.

[13]Macquarie University Transforming Energy Markets Research Centre (TEM), Submission 782, pages 5–6.

[14]Macquarie University TEM, Submission 782, p. 6.

[15]Mr John Grimes, CEO, Smart Energy Council, Committee Hansard, Canberra, 28 October 2024, p. 13.

[16]Mr Grimes, CEO, Smart Energy Council, Committee Hansard, Canberra, 28 October 2024, p. 13.

[17]Quotation originally made in Climate Council of Australia, Submission 428, p. 14, corrected in Climate Council of Australia, Submission 428.1, p. 14.

[18]Climate Council of Australia, Submission 428, p. 15.

[19]Clean Energy Council, Submission 230, p. 3.

[20]Ms Johanna Bowyer, Lead Analyst, Australian Electricity, Institute for Energy Economics and Financial Analysis (IEFFA), Committee Hansard, Melbourne, 4 December 2024, p. 40.

[21]Ms Bowyer, IEEFA, Committee Hansard, Melbourne, 4 December 2024, p. 35.

[22]IEFFA, Submission 7, p. 2.

[23]Clean Energy Investor Group, Submission 229, p. 2.

[24]Ms Bowyer, IEEFA, Committee Hansard, Melbourne, 4 December 2024, p. 40. See also: Clean Energy Investor Group, Submission 229, p. 6.

[25]Climate Council of Australia, Submission 428, p. 16.

[26]Climate Council of Australia, Submission 428, p. 16.

[27]ACTU, Submission 338, p. 1.

[28]Australian Energy Council, Submission 317, p. [1].

[29]Australian Nuclear Science and Technology Organisation (ANTSO), Submission 823, p. 13.

[30]SMR Nuclear Technology Pty Ltd, Submission 272, p. 11.

[31]Mr Gerard Holland, CEO, Page Research Centre, Committee Hansard, Sydney, 12 December 2024, p. 22.

[32]See: Mr Graham, Chief Economist, Energy, CSIRO, Committee Hansard, Canberra, 24 October 2024, p. 46; Professor John Quiggin, private capacity, Committee Hansard, Brisbane, 15 November 2024, p. 28.

[33]ANSTO, Submission 823, p. 13.

[34]Australian Energy Council, Submission 317, p. [1].

[35]Mr Graham, CSIRO, Committee Hansard, Canberra, 24 October 2024, p. 52.

[36]Mr Simon Holmes à Court, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 19.

[37]Professor John Quiggin, private capacity, Committee Hansard, Brisbane, 15 November 2024, p. 24.

[38]Professor Quiggin, private capacity, Committee Hansard, Brisbane, 15 November 2024, p. 28.

[39]SMR Nuclear Technology Pty Ltd, Submission 272, p. 11. See also: Australian Nuclear Association, Submission 180, p. 3.

[40]Australian Nuclear Association, Submission 180, pages 2–3.

[41]Mr Shaun Jenkinson, CEO, ANSTO, Committee Hansard, Canberra, 24 October 2024, p. 31.

[42]Australian Nuclear Association, Submission 180, p. 3.

[43]Ms Patty Durand, President, Cool Planet Solutions, Committee Hansard, Canberra, 25 November 2024, p. 2.

[44]Mr Graham, CSIRO, Committee Hansard, Canberra, 24 October 2024, p. 49.

[45]Mr Rod Campbell, Research Director, The Australia Institute, Committee Hansard, Canberra, 28 October 2024, p. 49.

[46]Mr Holmes à Court, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 19.

[47]Mr Holmes à Court, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 19.

[48]Mr Holmes à Court, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 19.

[49]Mr Holmes à Court, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 19.

[50]Mr Holmes à Court, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 19. See also: IEFFA, Submission 7, pages 6–7.

[51]Mr Holmes à Court, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 19.

[52]Mr Holmes à Court, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 19.

[53]Nuclear Energy Institute, Submission 360, p. 4.

[54]Rolls-Royce SMR, Submission 355, p. [2].

[55]Blueprint Institute, Submission 369, p. 20.

[56]Mr Holland, Page Research Centre, Committee Hansard, Sydney, 12 December 2024, p. 22.

[57]Mr Holland, Page Research Centre, Committee Hansard, Sydney, 12 December 2024, p. 22.

[58]Blueprint Institute, Submission 369, pages 19–20.

[59]Nuclear Power Report, p. 19, included in ETU Submission 396, p. [24].

[60]Nuclear Power Report, p. 19, included in ETU Submission 396, p. [24].

[61]Clean Energy Council, Submission 230, p. 4.

[62]Clean Energy Council, Submission 230, p. 4.

[63]Clean Energy Investor Group, Submission 229, p. 6.

[64]Clean Energy Investor Group, Submission 229, p. 7.

[65]Professor John Quiggin, Submission 3, p. [5].

[66]Boundless Earth Limited, Submission 399, p. [1].

[67]Boundless Earth Limited, Submission 399, p. [1].

[68]Ms Helen Cook, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 48.

[69]Nuclear Energy Institute, Submission 360 p. 4.

[70]IEFFA, Submission 7, p. 6.

[71]Josephite Justice Office, Submission 838, p. [4].

[72]Independent and Peaceful Australia Network, Submission 384, p. [3]. See also: Ms Bowyer, IEEFA, Committee Hansard, Melbourne, 4 December 2024, p. 35; Mr Theo Theophanous, private capacity, Committee Hansard, Melbourne, 4 December 2024, p. 56.

[73]Mr Graham, CSIRO, Committee Hansard, Canberra, 24 October 2024, p. 52.

[74]Mr Holmes à Court, private capacity, Committee Hansard, Sydney, 12 December 2024, p. 19.

[75]IEFFA, Submission 7, p. 6.

[76]Mr Grimes, Smart Energy Council, Committee Hansard, Canberra, 28 October 2024, p. 13.

[77]Mr Holmes à Court, Submission 478, p. 5.

[78]Nuclear Energy Report, p. 9, included in Electrical Trades Union of Australia (ETU), Submission 396, p. [14]].

[79]Mr Grimes, Smart Energy Council, Committee Hansard, Canberra, 28 October 2024, p. 13.

[80]Climate Council of Australia, Submission 428, p. 15.

[81]Clean Energy Council, Submission 230, p. 4.

[82]Clean Energy Council, Submission 230, p. 4.

[83]Professor Quiggin, private capacity, Committee Hansard, Brisbane, 15 November 2024, p. 28.

[84]Mr Theophanous, private capacity, Committee Hansard, Melbourne, 4 December 2024, p. 54.

[85]Mr Theophanous, private capacity, Committee Hansard, Melbourne, 4 December 2024, p. 54.

[86]Mr Graham, CSIRO, Committee Hansard, Canberra, 24 October 2024, p. 50.

[87]Clean Energy Council, Submission 230, p. 3.

[88]Dr Jim Green, National Committee Member, Australian Nuclear Free Alliance, Committee Hansard, Adelaide, 5 December 2024, p. 24.

[89]Dr Green, Australian Nuclear Free Alliance, Committee Hansard, Adelaide, 5 December 2024, p. 24.

[90]Emergency Leaders for Climate Action, Submission 431, p. 7.

[91]Macquarie University TEM, Submission 782, p. 7. See also Professor Andrew Whittaker, Director, Institute of Sustainable Transportation and Logistics, University of Buffalo, Committee Hansard, Canberra, 18 November 2024, p. 2.

[92]Dr Mayfield, CSIRO, Committee Hansard, Canberra, 24 October 2024, p. 49.

[93]Mr Graham, CSIRO, Committee Hansard, Canberra, 24 October 2024, p. 50.

[94]Ms Durand, Cool Planet Solutions, Committee Hansard, Canberra, 25 November 2024, p. 7.

[95]Josephite Justice Office, Submission 838, p. [7].

[96]Clean Energy Investor Group, Submission 229, p. 2.

[97]Professor Quiggin, private capacity, Proof Hansard, Brisbane, 15 November 2024, p. 24.

[98]Mr Tristan Edis, private capacity, Committee Hansard, Melbourne, 4 December 2024, p. 39.

[99]Mr Edis, private capacity, Committee Hansard, Melbourne, 4 December 2024, p. 39.

[100]Mr Matt Rennie, Co-CEO, Rennie Advisory, Committee Hansard, Brisbane, 15 November 2024, p. 31.

[101]Ms Bowyer, IEEFA, Committee Hansard, Melbourne, 4 December 2024, p. 38. See also: Mr Campbell, The Australia Institute, Committee Hansard, Canberra, 28 October 2024, p. 49.

[102]Ms Bowyer, IEEFA, Committee Hansard, Melbourne, 4 December 2024, p. 38. See also: Mr Campbell, The Australia Institute, Committee Hansard, Canberra, 28 October 2024, p. 49.

[103]Mr Campbell, The Australia Institute, Committee Hansard, Canberra, 28 October 2024, p. 47.

[104]Uniting Church in Australia, Synod of Victoria and Tasmania, Synod of Queensland and U Ethical, Submission 215, p. 8.

[105]See Minerals Council of Australia, submission 430, p. [6] and Dr Barry Green, private capacity, Committee Hansard, Perth, 17 December 2024, p. 23.

[106]Professor Quiggin, private capacity, Committee Hansard, Brisbane, 15 November 2024, p. 24.

[107]Mr Greg Bourne, Councillor, Climate Council of Australia, Committee Hansard, Sydney, 12 December 2024, p. 10.

[108]Mr Bourne, Climate Council of Australia, Committee Hansard, Sydney, 12 December 2024, p. 10.

[109]Mr Grimes, Smart Energy Council, Committee Hansard, Canberra, 28 October 2024, p. 13.