The GenCost 2024-25 Draft Report is open for public comments unti 11 February (Image: CSIRO)
GenCost is a report published by CSIRO, Australia’s national science agency, and the Australian Energy Market Operator (AEMO). The report focuses on cost estimates for new build electricity generation, storage, and hydrogen technologies, and is intended to give business leaders and decision makers information on capital costs and data comparisons for their planning and financing studies. It also feeds into AEMO's two-yearly Integrated Systems Plan, which provides a comprehensive roadmap for developing Australia's generation, storage and transmission as ageing coal-fired power stations retire.
The report has included small modular reactors since its inception in 2018, but included large-scale for the first time only last year. Since then, three considerations have emerged - regarding nuclear plants' longer operational life compared with other technologies, the estimated capacity factor range for nuclear generation, and the estimated development time for a nuclear power plant in Australia.
"Nuclear advocates have asked for greater recognition of the potential cost advantages of nuclear technology's long operational life and CSIRO has calculated those cost advantages for the first time," the report notes. "Our finding is that there are no unique cost advantages arising from nuclear technology's long operational life. 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."
Reasons for this finding include the "substantial" refurbishment costs required to achieve safe long operational life: "When renewables are completely rebuilt to achieve a similar project life to nuclear, 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," the report says, adding that, due to the long lead time in nuclear deployment, "limited cost reductions achieved in the second half of nuclear technology’s operational life, when the original capital investment is no longer being repaid, are not available until around 45 years from now, significantly reducing their value to consumers compared to other options which can be deployed now."
The draft report did not alter GenCost’s previous analysis of a capacity factor range of 53-89% for nuclear, which it said is a fair estimate based on "verifiable data and consideration of Australia’s unique electricity generation sector". It cites that the average capacity factor for black coal in Australia in the past decade has been 59%. It agrees that "high capacity factors of around 90% are achievable for nuclear generation" but says it "bases its capacity factor assumptions for all baseload technologies - coal, gas, and nuclear - on the Australian evidence, applying a maximum of 89% and minimum of 53%", with the minimum based on the same formula it applies to renewables.
Taking into account an increase in global median nuclear construction times over the past five years, the GenCost analysis arrives at a total development lead time for nuclear in Australia of "at least" 15 years.
For the seventh consecutive year, the draft report found renewables continue to have the lowest cost range of any new-build electricity generation technology.
CSIRO Director of Energy Dietmar Tourbier said the report's annual update delivers data-based forecasts that support informed decision-making, providing objective cost benchmarks using the best available and verifiable data. Feedback received plays a vital role in ensuring data and projections are "relevant and impactful", he said. The current draft report is open to public comment until 11 February.
Australia's electricity mix is heavily reliant on coal, of which the country has abundant resources. The country has formally pledged to reduce its greenhouse gas emissions by 43% below 2005 levels by 2030, with the current government of Prime Minister Anthony Albanese supporting a transition to renewable energy. But with an Australian general election to take place during 2025, the opposition has said it favours introducing nuclear power.
Minister for Climate Change and Energy Chris Bowen and Minister for Industry and Science Ed Husic, in a joint statement, said the CISRO report backed their case. According to ABC News, Australian opposition leader Peter Dutton claimed the assumptions used in the CSIRO's methodology were flawed. Dutton's Liberal-National Coalition, which unveiled its vision to implement nuclear energy earlier this year, is expected to release its own costings for nuclear energy later this week.
