AUSTRALIA’S NUCLEAR OPTION | SPECIAL REPORT
Three questions answered
The authors of this year’s GenCost publication – the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Australian Energy Market Operator (AEMO) – addressed three criticisms of their treatment of nuclear power: that capital recovery should be calculated over a potential 60-year nuclear lifetime, rather than the 30 years used as standard in GenCost; that nuclear should be assumed to have capacity factors above 93%, based on recent experience in the USA, not the 53-89% range used in GenCost; and that that new nuclear can be built in 10-15 years, rather than it taking more than 15 years. On the lifetime, the authors say that “there are no unique cost advantages” arising from nuclear’s long lifetime and “similar cost
savings are achievable from shorter lived technologies, even accounting for the fact that shorter lived technologies need to be built twice to achieve the same life”. It says that in order to deliver a longer lifetime, “substantial refurbishment costs are required,” for nuclear plant. Other forms of generation such as renewables may have to be rebuilt completely to attain a similar 60-year lifetime, but “they are rebuilt at significantly lower cost due to ongoing technological improvements whereas large-scale nuclear technology costs are not improving to any significant extent owing to their maturity”. From a financing point of view, a longer lifetime reduces annual capital repayment costs, but more interest is paid over the plant lifetime and there are other ongoing costs. Finally they note that the renewables options can be implemented immediately because there is a pipeline of projects, whereas “the benefits of the nuclear project are devalued by the 15 year delay” that would be required to license and build a nuclear plant. On the capacity factor range the authors point to nuclear experience in countries with lower capacity factors. They also make a distinction between availability factor and capacity factor. They say the Australian experience of ‘baseload’ technologies – currently coal but potentially nuclear – is that its best performance in the last 10-year period was 89% and its worst was 59%. The trend for such plant is that they are ramping down more often because more solar and wind generation, which is lower cost, is being used, so capacity factors are not likely to rise. On lead times, the authors agree that some countries have been able to build new nuclear units more quickly than its estimate.
However, those countries are typically building a series of plants. What is more they have a relatively low score for ‘democracy index’, which tends to coincide with a high degree of community consultation before construction begins. The authors say, “High levels of consultation tend to occur in democracies”. In fact, they suggest that “the IAEA range of 10- 15 years should likely be reinterpreted as 12 to 17 years” and where a recent plant in UAE was built in 12 years, “Australia is not likely to be able to repeat the UAE experience because our level of consultation will be consistent with our higher level of democracy”. ■
the time frame for the closure of coal-fired power stations and added, “Not knowing when the competing technology will exit the system means that you have a higher degree of uncertainty about what your revenue outlook is.” Zaneta Mascarenhas MP asked: “If we consider a
scenario where renewable investment is slowed down in anticipation of nuclear power generation after 2035, could you describe the implications for system reliability, the supply and demand balance and possibly consumer price implications?” Duggan noted that there would be ongoing implications for discussion of, for example, combined cycle gas turbine capacity factors, natural gas fuel costs and efficiency.
The new nuclear timetable While it is important for investors to understand the time frame for coal plant closures, equally important is knowing what other generating technologies could enter the frame. A pause in renewable energy investment, for example, might bring forward gas turbine investment to meet capacity needs long before new nuclear could be built. So on 24 October the Select Committee members had questions for witnesses over the timetable to license and build a nuclear power plant in Australia, which is expected to be up to 15 years. Committee members asked about lead times closer to 10 years in the UAE and less in other countries, and the IAEA’s current estimate of 10-15 years as a typical lead
Above: The now closed Ranger uranium mine, in Australia’s Northern Territory Source: NEA
www.neimagazine.com | January 2025 | 27
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