Dutton’s “small modular reactors” four times the price

ANTHONY KLAN

Opposition Leader Peter Dutton’s small scale nuclear reactors would cost almost four times as much as renewables — with that gap widening a massive 30 per cent in just six months.

So-called small modular reactors, or “SMR’s” — which don’t yet exist commercially anywhere in the world — are a central plank of the Liberal Party’s “nuclear” energy policy.

Data from the nation’s science agency, the CSIRO, and the Australian Energy Market Operator (AEMO) shows SMR’s — even if hypothetically operational in 2030, which is at least a decade before any could be built in reality — would cost 3.8 times more than “firmed” wind and solar.

That’s up from an already eye-watering 2.9-times, estimated just six months ago.

The CSIRO and AEMO’s GenCost report shows the already huge chasm between the energy sources is being widened by continuing falls in renewables, including a 20 per cent annual drop in large-scale battery prices.

The data is “technology” and “policy” neutral and does not consider any environmental impacts of different energy sources.

After almost 18 months of spruiking nuclear, the Liberal Party has said it will today unveil the costings of its energy strategy, which it appointed a private consultancy to prepare.

Every year since it started in 2018, under the then Coalition government, the GenCost report has found firmed renewables are the cheapest new-build energy option.

Dutton in July last year flagged SMR’s as the cornerstone of his nuclear energy policy.

At the Coalition’s request, the CSIRO and AEMO included nuclear costs for the first time in their 2023-24 GenCost report, released in May.

It found nuclear was the most expensive option, with SMR’s the most expensive and large-scale nuclear the second most expensive.

On Monday the GenCost draft report for 2024-25 was released.

The highly-detailed, 123-page document, shows nuclear not only remains by far the most expensive new-build option, but that the comparative cost of both large-scale nuclear and SMR’s has continued to surge.

Compared to wind and solar — including all transmission and other costs, including “firming” for when the sun isn’t shining, or wind isn’t blowing — large-scale nuclear in 2030 would cost almost double.

That’s up from 1.75 times more in the May report.

Energy from SMR’s in 2030 — based on the average between the lowest estimated cost and the highest estimated cost — would cost a massive 3.8 times more than renewables.

That’s just over 30 per cent more than the 2.9-fold premium calculated in May.

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The estimated 2030 cost of firmed solar and wind compared to nuclear SMR’s. Source: CSIRO/AEMO

That is before including “first-of-a-kind costs” of up to 100 per cent for the first SMR and first large-scale nuclear reactor built, costs which do not apply to firmed wind and solar, which are well established.

“We cannot rule-out FOAK premiums of 100 per cent,” the GenCost report states.

Almost 18 months ago Dutton announced the Liberal Party’s nuclear push — with SMR’s at its heart.

“If the government wants to stop coal-fired power and phase out gas-fired power, the only feasible and proven technology which can firm up renewables and help us achieve the goals of clean, cost-effective and consistent power is next-generation nuclear technologies,” Dutton’s said in July last year.

“Namely, small modular reactors or ‘SMR’s’.

“Namely, small modular reactors or SMR’s” — Peter Dutton

“A single SMR can power 300,000 homes. A micro-reactor could power a hospital, a factory, a mining site or a military base,” Dutton said.

Opposition Leader Peter Dutton. Source: ABC News/Nick Haggarty.

In June the Liberal Party announced seven sites across the nation where it would install nuclear.

At least two of those sites, at Collie in Western Australia, and Port Paterson, near Port Augusta in South Australia, would be “SMR only”.

In its May report, and again in the report this week, the CSIRO and AEMO have included costs for both large-scale nuclear and SMR’s at both current prices and in 2023.

The GenCost report notes this data is “of interest only” as no reactor, full-scale or SMR, could be operational before 2040.

At 2024 prices, SMR’s — if they existed commercially — are estimated to cost a massive 4.29 times firmed wind and solar.

The May GenCost report, for 2023-24, shows that estimated cost differential to be almost identical, at 4.28 times.

The GenCost report provides estimated costs for eight types of new build energy sources, for both 2024 and 2030.

They are firmed solar and wind; gas; gas with “carbon capture and storage” (CCS); black coal; black coal with CCS; solar thermal; nuclear SMR’s and large-scale nuclear.

Estimated average costs of different energy sources in 2030. Source: CSIRO/AEMO

The costs are provided in a range from the lowest estimated cost to the highest estimated cost for each energy source.

For ease of comparison, for each energy source The Klaxon has taken the average of the lowest and highest estimated costs.

In 2030, firmed wind and solar would cost between a low estimate of $67 per megawatt hour (MWh) and a high estimate of $137 MWh — an average of $102MWh.

In 2030, SMR’s would cost between a low of $285MWh and a high of $487MWh — an average of $386MWh, or 3.78 times more.

In May, in 2030 firmed wind and solar were estimated to cost between a low of $89MWh and a high of $124 MWh — an average of $107MWh.

In May, in 2030 SMRs were estimated to cost between a low of $387MWh and a high of $641MWh — an average of $514MWh, or 2.86 times more.

The fall of the 2030 firmed wind and solar cost estimate over the past six months, from $107MWh to $102MWh was a result of falling renewable costs overall.

“For clarity, neither type of nuclear generation can be operational by 2030” — GenCost

The low and high estimates of each energy source in the latest GenCost report. Source: GenCost

The cost of onshore wind increased by 2 per cent, which was more than offset by an 8 per cent fall on solar (the second consecutive 8 per cent annual fall) and the 20 per cent fall in the cost of large-scale battery storage, the latest GenCost report states.

The 2030 costs of SMRs had increased on its May forecasts because of delays in the deployment of the technology internationally.

“The nuclear SMR capital cost results are higher for longer in the updated projections compared to 2023-24 because updates have been made to the expected dates of deployment for projects, which have been pushed further into the future, beyond the 2020s,” the GenCost report states.

“Later deployment of nuclear SMR means it takes longer for capital cost reductions due to learning-by-doing and economies of scale to materialise”.

The latest data shows that estimated SMR costs between 2024 and 2030 “improve significantly” but “remain significantly higher” than other alternatives.

“For clarity, neither type of nuclear generation can be operational by 2030,” the report states.

“A practical operation date would be the 2040s by which time the costs of other technologies will have fallen further” — GenCost

“Developers will need to purchase the technology in the 2030s sometime after pre-construction tasks are completed. At least 8 years of construction would then follow before full operation can be achieved.

“As such, the inclusion of large-scale and SMR nuclear in the cost comparisons is only as a point where investment could be considered.

“A practical operation date would be the 2040s by which time the costs of other technologies will have fallen further,” the report states.

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