LCOE could improve by 2030, but remain higher than alternatives
The levelised cost of electricity (LCOE) for small modular reactors in Australia could improve significantly to around $230/MWh-$382/MWh* by 2030, but would still remain significantly higher than alternatives, according to national science agency CSIRO’s annual GenCost report.
This compares to around 141/MWh-233/MWh for large-scale nuclear, which has been included in the report for the first time. The lowest LCOE for 2030 is solar and wind at around $89/MWh-$125/MWh.
The LCOE estimate for SMRS in 2023 was $387/MWh-641/MWh while the 2023 cost for large-scale nuclear was $155/MWh-252/MWh.
LCOE captures both capital and operating costs that need to be covered. It is essentially the long-term price at which the electricity produced by a power plant will have to be sold at for the investor to cover all their costs.
The International Energy Agency has said the LCOE for advanced nuclear is USD63.10/MWh. The lowest LCOE is USD30.43/MWh for standalone solar and the highest is USD120.51/MWh for offshore wind. Onshore wind is USD36.92/MWh.
The report warned that given the potential for “an extended development timeline”, a risk for nuclear generation developers in Australia is political change.
“That is, they could commence the development process, incurring development expenses, but before reaching financial close they may find that a change in government results in a modification of the required permitting steps or prohibits nuclear altogether,” the report said.
“Without bipartisan support, given the historical context of nuclear power in Australia, investors may have to consider the risk that development expenses become stranded by future governments.
“Of course, other technologies face some level of this risk as well, but to a much lesser degree given shorter total development times and a longer history of successful permitting.”
Australia has no nuclear plants and a domestic nuclear energy industry is banned following a moratorium set in place under the former Howard government in the 1990s.
The opposition federal Coalition has said it will back a global pledge to triple nuclear energy if its leader, Peter Dutton, becomes prime minister.
In 2019 a parliamentary inquiry concluded the ban should be partially lifted, but then-energy and emissions reduction minister Angus Taylor said at the time the government had no plans to alter the moratorium.
* Data in the report is adjusted to Australian dollars and inflated to 2023‐24 dollars.
