As demonstrated by these new costings, a small fraction of nuclear power lowers the overall cost of a low-emissions energy system because while the individual nuclear plants are expensive, they reduce the need for overcapacity and poorly utilised storage in other areas.

The prevailing media and political narrative of comparing nuclear against renewables as if they represented fundamentally different futures for Australia is a false choice, and in fact, nothing more than a clever way to procrastinate meaningful climate action. I therefore welcome the current costings because they are an essential step towards properly appreciating the interplay between nuclear and renewables in a modern electricity grid, that leads to both reduced environmental footprint and higher value, more reliable power.

Most nuclear power plants are designed for baseload operation to maximize efficiency and ensure stable revenue, with both current cost evaluations based on this mode. In dispatching electricity, plants are prioritized by their variable production costs, with the lowest-cost generators activated first. Flexibility in adjusting production levels has historically been less critical for nuclear operations.

However, with the growing integration of renewable energy and increasingly inflexible energy mixes by the time nuclear expansion takes place, the National Electricity Market (NEM) is likely to experience much lower minimum demand. This shift will necessitate more flexible nuclear operation, introducing significant challenges. Reduced load factors, grid congestion, and economic pressures could arise. Congestion, in particular, may undermine economic viability by limiting the ability to sell electricity at competitive prices, potentially resulting in revenue losses. These dynamics may make it difficult for nuclear plants to cover their costs, threatening their long-term operation and reducing their attractiveness for investment.

As the report says: The NEM arrangements need to be amended to correct the disconnect between the NEM design intent and how the market is working in practice. There is a long way to go.

Understanding the revenue impacts of these shifts will be critical. Small Modular Reactors’ financial outcomes will depend heavily on market structures and fluctuating electricity prices. Investors and operators must anticipate how these factors will affect life cycle costs, including higher capital and maintenance expenses, reduced equipment lifespan, potential deratings, and changes in the levelized cost of electricity.

The Coalition’s costings for its nuclear power policy raises more questions than it answers.

The first question is – does it compare apples with oranges? The headline result of a $263 billion saving compares AEMO’s Progressive Change scenario (a slower transition aligned with the Coalition view) plus nuclear, with AEMO’s preferred Step Change scenario (below 2 degrees global warming) used by Labor. This is comparing apples with oranges as they yield two different emissions outcomes, with the Coalition trajectory heading for greater than 2 degrees global warming.

The second question is – how does the Frontier Economics modelling produce a lower cost for nuclear, compared to the cost of renewables plus the additional storage and transmission required to produce the same reliability? The answer isn’t clear from the report, and is inconsistent not only with CSIRO’s GenCost modelling (with additional transmission and storage), but also with similar modelling overseas (e.g. by Lazards).

The third question is - how will the Coalition keep aging coal-fired power stations open in the face of ongoing maintenance issues, outages during increasing extreme heat events, and in the face of intense competition from solar and wind? Even under the Progressive Change scenario, by the time the Coalition plans for nuclear power to be operational in the late 2030s, the vast majority of power generation will be solar and wind which will eat into the business model of both coal and nuclear, particularly in the middle of the day. 

If it is uneconomic for coal-fired power station owners to keep their plants going - does the Coalition intend to subsidise them and pay their repair costs? This is counter to the International Energy Agency’s championing of the removal of fossil fuel subsidies. 

One thing is certain – the very existence of the Coalition’s plan will raise the price of electricity simply because it creates policy uncertainty around the type of future investments needed for the energy transition. Uncertainty creates risk for investors, and that pushes up the cost of finance for energy projects – which ultimately feeds into higher electricity prices.

The newly released policy on adopting nuclear power in Australia demonstrates a fundamental misunderstanding of the risks and costs associated with creating a secure energy system for economic and environmental development.

If sufficient nuclear projects are commissioned by 2036 and considering a planned construction time of 10 years, Australia would effectively postpone its efforts to achieve carbon reduction targets by more than two decades (beyond 2045). Furthermore, the proposed policy and its associated modelling assume that the construction of nuclear power plants will occur just in time. However, significant delays in nuclear projects throughout the OECD have repeatedly shown that this assumption is invalid.
 
Australia faces substantial economic risks by delaying the entry of renewable energy sources combined with storage and firming technology. Firstly, due to potential trade tariffs, postponing action on carbon emission reductions could severely impact Australia’s natural resources—such as iron ore, bauxite, and copper. The European Union has implemented the Carbon Border Adjustment Mechanism (CBAM), imposing high tariffs on goods containing high carbon-intensive components.
 
Secondly, delaying the planned retirement of existing coal-fired electricity generation assets will significantly strain the power sector. We have already witnessed the potential for blackouts in Australia during 2023 and 2024. Maintaining assets that should have been retired a decade ago put the economy and the population at significant risk of experiencing power outages.
 
The potential for Australia to be able to build and commission nuclear power in our electricity system puts us all at risk of higher electricity prices and regular rolling blackouts.

The primary failing in the coalition’s plan with nuclear is that the system completely fails in the primary objective to reduce carbon emissions quickly.  For nuclear to be part of the mix, coal fired generators need to be kept going well beyond their current scheduled shut down timetable, resulting in carbon emissions for the electricity sector way above the target set by the current government (i.e. 82% renewables by 2030).

To meet Australia’s UNFCCC Paris commitments, the electricity sector must do most of the heavy lifting in the next decade while transport and industry will take longer to decarbonise. The plan presented by the coalition fails to acknowledge this simple fact, and therefore any costings which it comes up with are not a relevant or useful comparison.

This plan objectively hovers between fantasy and hopeful naivete.  

First, SMR do NOT exist today. There is not even a prototype of them. So we have absolutely no idea what they really cost. Second, the cost figures are hopelessly understated. The last nuclear plant built in the Western world today (Flamanville 3 in France) is 10 billion Euros over budget (at 13.2 billion euros, so A$20 billion total) and 12 years behind schedule; construction started in 2007. At this pace, to deliver something by 2036, we should have started in 2019. And France is a country with over 60 years of nuclear experience. Australia has no such legacy and no Uranium production capacity.

There is no mention of the maintenance costs of these nuclear plants. The refurbishment cost of the nuclear fleet in France (58 units) is estimated to cost 50 billion Euros over a decade (over A$75 billion), and is likely an understatement. 

Last, there is no actual model of the interaction of nuclear baseload and renewables in the wholesale market. Nuclear is even more rigid in its operation than coal. Today we routinely see negative prices in the NEM when renewables produce. Old coal-fired power plants that are already written off eat these intraday losses. But how will nuclear pay for itself then?

The outcome of decisions on infrastructure often have long lead time, beyond political terms of the politicians. Therefore, it is hard to ensure accountability of these suggestions during the political career of the proposing politicians. To put it simply, if the project goes ahead and it is over budget and behind the schedule, the suggested politician may not be in politics anymore to respond to the consequences of their decisions. Putting infrastructure at the centre of political debate, instead of technical and social considerations, is unfortunate and will lock many decisions for future generations.

The nuclear component of Dutton's energy strategy, to be released today, is just a distraction, and will probably never be built. Based on overseas experience in the UAE and Czechia, it will take at least five years from the time the policy is adopted to the signing of the first contracts, even on the implausible assumption that there will be no political resistance. By then, it will be obvious that nuclear power is unaffordable.
 
What matters is the disastrous decision to abandon our Paris commitments, keep coal going as long as possible and then rely on gas. A Dutton government can and will take immediate steps to implement this decision.

In the age of climate change, nuclear power can be an option for countries. However, we can’t evaluate any plan for nuclear power without clear information about how community consent will be obtained as part of the planning. 

Recent history is littered with examples of failed nuclear siting projects because of the failure to gain social licence. All available information so far indicates that the Coalition plan does not include the time and money needed to genuinely consult with affected communities, including First Nations communities, not only around the nuclear power infrastructure but also the handling of resulting waste, which could be up to 420 tons of radioactive waste per year. 

This isn’t just morally imperative, but also pragmatic, because without a clear plan for obtaining genuine community consent, these plans are likely to fail, at significant cost to the Australian taxpayer.