Nuclear power seems to be back on the agenda in Australia. In response to calls from some Coalition MPs, Environment Minister Sussan Ley says she is open to lifting the ban on nuclear plants, and Energy Minister Angus Taylor says he is open to hearing a business case.
But if you are persuaded for no other reason that nuclear power is not the way forward for Australia, then consider cost. Those arguing for nuclear power in Australia are arguing for higher energy prices.
To compare the cost of producing electricity using different technologies, the “levelised cost of energy” is used. This allows for the fact that the sun does not always shine and the wind does not always blow.
So, while coal power produces electricity 85 per cent of the time; solar produces 30 per cent of the time, and wind produces 40 per cent of the time.
According to figures confirmed by Bloomberg New Energy Finance, and Lazards, the levelised cost of energy of a solar farm is $60 MWh, and the levelised cost of wind is $50 MWh.
To make solar and wind completely reliable, you need to firm it up with back-up sources - a combination of gas plants, pumped hydro storage and batteries. Power companies and government estimates put this back-up cost at $15 MWh.
So, wind power made completely reliable would, in Australia, cost $75 MWh, as demonstrated by contracts being signed by companies such as Snowy Hydro.
Compare this to the levelised cost of nuclear energy in nations with established industries, which is between $160 MWh and $270 MWh – potentially three times the price.
Australia does not have an established nuclear industry and would likely take 15 years to establish one.
The current cost of producing electricity in NSW is about $80 MWh and, according to the ACCC, it has increased 63 per cent in real terms since 2013.
In 2004, Australia had the fourth cheapest electricity prices in the OECD. In 2018 we had the fourth highest.
The Australian Energy Market Operator has found that the cheapest new energy for Australia is renewable energy – wind and solar – backed up by pumped hydro storage and gas.
Even if Australia was to overcome all the barriers to nuclear power – the legal ban, the social licence, concerns about safety of operation and waste disposal – the fact remains that nuclear power would lead to higher power bills.
This opinion piece first appeared in the Newcastle Herald on Tuesday, 2 July, 2019.