Building a nuclear power plant in Australia would likely cost twice as much as renewable energy even accounting for the much longer life-span of reactors, according to a new report from Australia’s leading science agency. 

In its latest economic analysis of the cost of building various energy projects, the CSIRO found nuclear plants enjoyed relatively little financial advantage from their long lives, which could be double a solar or wind farm.

It comes as the Opposition Leader Peter Dutton prepares to release the much-anticipated costings of the Coalition’s nuclear power policy this week. Mr Dutton has repeatedly said the policy would help bring down power bills, a claim challenged in this latest report. 

The CSIRO regularly releases the GenCost report, which looks at the cost of Australia’s energy sources. It has consistently found renewable to be the cheapest option, despite a run of inclusions at the request of critics to make changes to the modelling — the latest being the life span of a nuclear plant.

And the agency said there was little evidence to suggest nuclear reactors in Australia would be able to benefit from running flat-out around the clock, noting they would face the same forces that are hollowing out the business case for coal.

The conclusions come after the CSIRO copped heavy criticism over a report in May that found Australia’s first nuclear power plant would cost up to $17 billion in today’s dollars and not be operational until 2040.

At the time, critics including opposition energy spokesman Ted O’Brien, who is spearheading the Coalition’s case for nuclear power, said the CSIRO analysis was flawed.

Central to the criticism were suggestions the report failed to properly account for a nuclear reactor’s long life, which could be anywhere up to 60 or even 80 years.

Similarly, there were complaints the CSIRO wrongly discounted how much power a reactor would produce, with backers arguing nuclear plants could run at or near their capacity for long periods of time.

They also attacked findings that it would take “at least” 15 years to build a nuclear power plant in Australia, saying this was overly pessimistic.

But in an update of its GenCost report — which it carries out annually alongside the Australian Energy Market Operator — the CSIRO has largely stood by its earlier findings.

Nuclear’s long life ‘no advantage’

According to the agency, energy generation projects were typically funded using loans that lasted 30 years, which was about the life span of a solar or wind project.

CSIRO chief economist Paul Graham said even if a nuclear project could get a loan with a 60-year term, higher interest payments would wipe out many of the supposed gains.

In the more likely event a nuclear project would get a loan with a typical life span, Mr Graham said it was true the operating costs of the reactor would be relatively low once the debt had been repaid.

However, he said these low costs would be short-lived because nuclear reactors faced substantial refurbishment costs running into billions of dollars after about 40 years of operation.

For these reasons, Mr Graham said there was no “unique” cost advantage offered by nuclear compared with renewable energy projects backed by transmission lines and so-called firming technologies such as batteries and gas plants.

“If we had a 60-year nuclear project and a 60-year solar project where you rebuild the solar halfway through, both require re-investments,” Mr Graham said.

Mr Graham said there was also scant evidence to suggest a nuclear reactor in Australia would be able to repay its debt quickly and lower its costs by running at close to full capacity much of time.

Nuclear’s capacity analog to coal’s

He said one of the criticisms faced by the CSIRO following its May report was that it had been too miserly in its calculation of a nuclear plant’s “capacity factor”.

The term refers to the share of a plant’s nameplate capacity that is actually used.

It is almost invariably higher in base-load generators such as nuclear and coal plants, which can run around the clock, compared with wind turbines and solar panels, which are dependent on the weather.

Mr Graham said supporters of nuclear had argued the technology should be given a capacity factor of 93 per cent, in line with reactors in the United States.

But Mr Graham said the US was an “outlier” on this score and the average for reactors globally was more like 80 per cent.

One in 10 reactors around the world, he said, was operating at a capacity below 60 per cent.

What’s more, Mr Graham said that while Australia didn’t have any nuclear plants, it had plenty of black coal generators, which were analogous in many ways because they were designed to run full throttle most of the time.

And Australia’s black coal generators, he said, were operating at ever lower capacity factors as cheap renewable energy — particularly solar power — flooded into the market and squeezed out conventional sources.

“But we continue to also use a range which recognises that some base-load generation can operate down closer to 50-53 per cent.”

No plant likely until 2040

On the subject of lead times to build nuclear, Mr Graham was steadfast.

He said suggestions Australia would be able to build its first nuclear reactor in sooner than 15 years seemed to stretch plausibility.

Nuclear proponents have pointed as an example to the United Arab Emirates, which went from having no reactors to commissioning its first project in 12 years.

Mr Graham said the UAE was, in many ways, a best-case scenario for the nuclear industry but the country was hardly comparable to Australia.

The UAE was an absolute monarchy with an autocratic style of government but Mr Graham said Australia was a democracy where policies were subject to many checks and balances.

Accordingly, he said overturning Australia’s ban on nuclear power, “planning, permitting and financing” a reactor would be a daunting task that took a lot of time.

Under plans that have been foreshadowed by their private owners, most of Australia’s coal-fired power stations are due to retire by the middle of next decade.

“After we evaluated these three topics, potential for longer life, how often nuclear generates throughout the year, when we applied those numbers, we are still finding that large-scale nuclear would be 1.5 to 2.5 times the cost of generating from firmed solar and wind,” Mr Graham said.

In line with its earlier findings, the CSIRO concluded renewable energy and the technologies required to back it up would be the cheapest way of meeting Australia’s future energy needs.

Energy Minister Chris Bowen said the CSIRO had accommodated the Coalition’s concerns and still found that Labor’s renewables-led approach was the cheapest way of overhauling the electricity grid. 

He described the nuclear policy as “wildly optimistic”, in light of the report’s findings.

“[It] thought about those criticisms, analysed those criticisms and found that those criticisms don’t stack up,” Mr Bowen said.

Mr Dutton responded, suggesting Mr Bowen had interfered in the CSIRO’s report. 

“[Labor] hasn’t seen our plan yet and they’re out bagging it,” Mr Dutton said.

“It just looks to me like there’s a heavy hand of Chris Bowen in all of this and I don’t think people want to see that.”

In what Mr Graham described as an “amazing achievement” in an inflationary environment, the CSIRO found battery costs had tumbled 20 per cent in the 12 months to June 30, while there had been back-to-back decreases of 8 per cent for large-scale solar.

Wind projects, by contrast, increased by 2 per cent last year following a whopping jump of 35 per cent in 2022-23 and an 8 per cent hike in 2023-24.

The CSIRO found gas project costs were continuing to rise, although this partly reflected the shift towards technology that could also run on hydrogen.

Cost estimates for miniature nuclear plants called small modular reactors (SMRs), meanwhile, were still by far and away considered the most expensive type of new energy project.

However, the CSIRO said it expected costs for SMRs to roughly halve — albeit to a level that was still the most expensive — by 2030 as the technology was commercialised overseas.