The latest report released by GenCost has revealed that renewables remain the cheapest new-build electricity generation to 2050, even if they were to be rebuilt every 25 or 30 years.
GenCost, the annual collaboration between CSIRO and the Australian Energy Market Operator (AEMO), is used as a standardised measure by industry for forward planning and to assess the most economically viable investment opportunities.
CSIRO and AEMO considered the claims about the life of nuclear reactors and capacity factors, rejecting the claim that these factors make nuclear cheaper.
The report found that renewables remain the cheapest new-build electricity generation in Australia to 2050, both as standalone assets and when also accounting for the required storage, transmission and firming.
Gencost found that the first large-scale nuclear couldn’t be expected to produce electricity in Australia any earlier than 2040, with cost estimates from then ranging from $145 to $238/MWh.
The report found firmed renewables, including transmission and storage costs, provide Australians the cheapest power, at between $80MWh to $122MWh in 2030, when they account for 80 per cent of variable generation.
According to the report, the cost of renewable technologies has continued to decline despite a global inflationary environment. Large scale battery costs decreased 20 per cent and utility solar declined eight per cent. The cost for onshore wind infrastructure is moderating, rising only two per cent after having risen eight per cent in 2023.
In the updated analysis, CSIRO responded to stakeholder requests to model the cost of nuclear reactors based on them having a longer financing and operational lifespan than what was used in the previous GenCost report, and a longer lifespan than wind and solar assets.
The analysis reveals that nuclear remains significantly more expensive than renewables, even if the renewables were rebuilt every 25 or 30 years.
Nuclear is assumed to be financed and operate for 60 years, noting the oldest reactor still in operation is about 55 years old.
The report finds that long operational life provides no major financial benefit to electricity customers relative to shorter-lived technologies. This is because the cost of refurbishment to keep reactors running for 60 years is likely to be about a third of the initial construction costs, and ongoing operation and maintenance costs would also have an impact, noting the reactors would only be providing a small share of Australia’s total energy generation.
Gencost also addresses feedback that says the 2024 report’s assumption that nuclear reactors run between 53 per cent to 89 per cent of the time is too low, and should instead be 90 per cent. In assessing the impact of higher capacity factors on nuclear costs, Gencost concludes the impact would be negligible.
The draft report draws heavily from local and international data sources when examining nuclear construction timelines.
It finds mature democracies, such as Australia, face significant lead time for planning, financing, safety and other regulatory approvals, with an average construction timeline of between 17 and 21 years, putting first nuclear power well into the 2040s, consistent with evidence from other experts.
The draft report is open for consultation until 11 February 2025 with the final report due in the second quarter of 2025.
CSIRO’s Director of Energy, Dietmar Tourbier, said GenCost provides objective cost benchmarks using the best available and verifiable data.
“GenCost’s annual update delivers data-based forecasts that support informed decision-making across the energy sector,” Dr Tourbier said.
“Collaboration and transparency are central to this process, and the feedback we receive plays a vital role in ensuring our data and projections are relevant and impactful.”
CSIRO Chief Energy Economist and GenCost lead author, Paul Graham, said the draft report found no unique cost advantage in nuclear technology.
“Similar cost savings can be achieved with shorter-lived technologies, including renewables, even when accounting for the need to build them twice,” Mr Graham said.
“The lack of an economic advantage is due to the substantial nuclear re-investment costs required to achieve long operational life.”
