Rubbery nuclear cost estimates

The world’s largest crane lifts a steel dome onto Hinkley Point C’s first reactor building. The cost of building the UK’s latest power plant has soared. Photograph: Ben Birchall/PA

In Australia, the right-wing Coalition ("Liberal"/National Party) opposition, in government when Australia became the first country in the world to abolish a carbon tax, is enthusiastically spruiking nuclear power. Their numbers defy belief.

Here's part of an article from The Guardian:

The primary reason the world is not embracing nuclear energy on a grand scale is simple: cost (although in Japan’s case, it’s also about safety).

The Frontier Economics report, which the Coalition is using to make its case, is written in an opaque way that makes direct comparisons difficult. Essentially, the report admits that the capital cost of nuclear is $10,000/kW, while solar and wind are $1,800 and $2,500 respectively.

So how is it that the Coalition’s modelling suggests that a world where nuclear makes up more than a third of the east coast energy grid could possibly be cheaper?

It’s easy to come up with the answer you want when you base your modelling on rubbery assumptions.

Firstly, we should appreciate that even a $10,000/kW estimate for nuclear is considerably optimistic if we look at the experience of comparable countries over the past decade. The cost at the off-cited Hinkley C plant in the UK has, to date, risen to $27,515/kW. Three others – France (Flamanville 3), Finland (Olkilutoto 3) and the US (Vogtle) – are between $15,000 and $16,900. [In other words, nuclear in the West is a minimum of 7 times as expensive as wind and solar]

Delays have been a key factor in driving up the cost of nuclear power. The longer it takes to build and operate a plant, the higher the cost of finance. The Coalition believes we can overturn national and state legislation and acquire land and planning approvals virtually overnight. And then we’ll just install an ‘off-the-shelf’ nuclear power plant, ready to run.

By its own admission, having to tweak nuclear power plants so they operate at maximum safety and efficiency can blow out build times and costs. It beggars belief that the Coalition claims Australia, which has no nuclear energy capability, could ship, build and integrate into the grid with no challenges, with a 50,000-strong nuclear workforce appearing by magic.

There is no mention of the costs of extending the life of existing ageing coal-fired power stations, or the likelihood that these plants will increasingly fail as they reach end-of-life, raising energy costs as supply falls short and, increasingly, the likelihood of blackouts. And, apparently, nuclear waste can be transported and stored without cost.

The Coalition also argues that, because wind and solar energy are not always “on”, we’ll need to build a lot more capacity, along with transmission and storage. It calls this “overbuild”, but its assumptions have overegged what that need might realistically look like, especially as battery storage becomes cheaper over time (unlike the experience of nuclear) and of longer duration. [Battery pack prices have halved this year]

Finally, to arrive at these rose-tinted costs, the Coalition has had to cut back on estimates of the amount of energy we will demand over the next two decades by almost half what the Australian Energy Market Operator says we need. That’s because it’s assumed we won’t worry about EVs or electrification. [This has led the Coalition to claim that this will cut electricity costs by 44%.  They have deliberately confused capital cost with cost per kWh of output. Of course capital costs are 44% lower if you are going to produce 44% less electricity!] This is why the Coalition will undo Australia’s 2030 43% emissions reduction target, which we are set to get very close to, taking us back to our Morrison-era status of global climate pariah. [The Coalition plans to abolish Labor's 43% target] 

And this is the kicker. Under the Coalition’s plan, our modelling shows Australia’s domestic emissions will rise by around one billion – yes billion – tonnes, at a cost of $240bn to the economy, society and environment, based on Infrastructure Australia’s cost of carbon methodology.

Most commentators who are not creatures of the Murdoch media think that this is just a ploy to prolong the use of coal and gas.   If it will take at least 15 years to build out a nuclear fleet, in the meantime we will need to extend the lives of our coal power stations.   Since they are already long in the tooth, and will be very expensive to refurbish, that will mean building new coal power stations.  But new coal in Australia costs 3 times as much per MWh of output as new wind and solar backed up by 4 hours of storage.  Which is why no utility is interested in building new coal power stations.  

In addition, the Coalition hasn't said what they're going to do about rooftop solar.  Rooftop solar, in summer, contributes 16% of total electricity supply, beating out all other sources except black coal.  Since old-fashioned nuclear power stations can't easily be ramped up or down, i.e., they're always "on", rooftop solar output will have to be curtailed to allow nuclear to keep running.  In other words, the money millions of people have spent installing rooftop solar to save on electricity bills will be wasted.  Not a winning proposition, for sure.