Nuclear small modular reactors (SMRs) could see their capital costs nearly halve by 2030, according to an Australian government agency, but will not have "any major role" in the electricity sector emission cuts needed for the country to reach its net zero greenhouse gas (GHG) emissions target by 2050.
The Commonwealth Scientific and Industrial Research Organisation (CSIRO) said in its GenCost 2023-24 draft report published on 21 December that capital costs for SMRs could drop from an estimated average A$509/MWh ($343/MWh) in 2023 to A$282/MWh in 2030. This is well above the projected costs for onshore wind and solar photovoltaic (PV), CSIRO noted, even when adding integration costs — mostly investments in transmission and storage — into the levelised cost of electricity data for the renewable sources.
Combined costs for large-scale solar PV and onshore wind are expected to fall from an average A$112/MWh in 2023 to A$82/MWh in 2030, the lowest cost range of any new-build technology. CSIRO incorporated pre-2030 integration costs into the renewables data this year in response to feedback on the previous annual report, published earlier this year.
SMRs emerged as the highest-cost technology in the report, following new available data from an advanced SMR project in the US that was cancelled last month by nuclear developer NuScale and Utah Associated Municipal Power Systems.
"Despite being cancelled, this project is the first to have provided cost estimates for a commercial project with detailed data," CSIRO noted. "This new data means we can be more confident about the current capital costs of nuclear SMR and the data confirms it is currently a very high-cost technology."
Apart from the unfavourable economics, lengthy periods for certification, planning and construction mean that nuclear would take 15 years or more to be deployed, CSIRO said. This is compounded by the fact that nuclear power generation is prohibited in Australia under federal and state laws, with undergoing local development approval an "untested" process for the technology in the country.
"It's very clear that nuclear is going to find it very challenging to compete against renewables in Australia," CSIRO said.
"The time needed for nuclear SMR to prove commercially viable, and overcome other hurdles, rules it out of any major role in the electricity sector emission abatement required for Australia to reach its net zero emissions target in 2050," it noted.
While large-scale nuclear plants have a lower cost than SMRs, employing them in Australia would prove difficult as the country's state electricity grids are relatively small compared with other nations. "Planned maintenance or unplanned outages of large-scale nuclear generation would create a large contingent event of 1GW or more that other plants would find challenging to address," CSIRO said.
The Australian federal government has ruled out legalising nuclear power because of its high costs, saying that replacing the country's coal-fired power plants with nuclear would cost around A$387bn.
The GenCost 2023-24 report has also found that the cost of onshore wind generation rose by 8pc on average compared with the previous year, while the cost for large-scale solar PV fell by 8pc. Battery costs rose by 2pc, while offshore wind costs fell by 9pc.
Australia has set a target of achieving net zero emissions by 2050 and plans to reduce GHG emissions by 43pc by 2030, with renewables reaching a 82pc share of the electricity mix.
The GenCost 2023-24 report will now undergo public consultation until 9 February 2024, with feedback to be sent to the Australian Energy Market Operator. The final report will be released in the second quarter of 2024.
