How to Build Low-Cost Nuclear: Lessons from the world
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Aidan Morrison
April 11, 2024 · AP65
Executive Summary
Nuclear energy can be either very cheap or very expensive. Much ink has been spilled recently attempting to establish what the true ‘cost’ of nuclear is, as though that is some fixed objective fact. In practice, the cost of nuclear energy depends on policy choices about how a nuclear fleet is planned, procured, and operated. Getting these choices right is key to ensuring nuclear power is attained at a low price. This report attempts to inform some of those policy choices, by taking a survey of eight different countries and comparing key attributes of their industry that have been determined by policy, and the key outcomes in their nuclear build programs in terms of the cost and time to construct nuclear generating capacity.
The primary observation is that nuclear energy appears to benefit from high degrees of concentration and scale, in both the technical and corporate sense. This finding can be summed up in four lessons on how to do nuclear well:
- Fewer design types: Successful countries concentrate their efforts on a limited number of reactor designs. These designs may be evolved and improved slowly and iteratively, but significant conceptual leaps are rare, and costly. Maintaining a diverse range of different reactor designs or concepts appears to be difficult, as it dilutes the industrial experience and stretches supply chains more thinly across the different concepts. Rather than ‘testing’ multiple different designs or insisting on an original design, Australia should select a design that has worked well overseas.
- Fewer generation sites: Successful countries keep costs down by building more reactors at fewer generation sites, thus benefitting from economies of scale at each site. Many of the establishment costs of nuclear energy are on a ‘per-site’ basis, including establishing water access transmission corridors, attaining social license, and many safety and regulatory overheads. Australia should focus on building larger nuclear plants at a limited number of sites. For example, one large nuclear station could replace the two or three smaller coal plants that support Sydney and Melbourne in the Hunter or Latrobe valleys. Where possible, existing water and transmission assets can be utilised with modest adaptation or extension.
- Fewer independent corporate entities: Successful countries align the interests of the entities responsible for designing (or evolving a supplied design), building, operating and owning the country’s nuclear plants. This is commonly achieved by having a high degree of vertical integration between these roles, frequently to the extent of a single company (or its subsidiaries) being responsible for all stages. This helps to ensure the plant is designed to be built and operated efficiently, built as quickly as feasible to commence operations, but only as quickly as ensures safe, reliable, and efficient operations over the long term. We observe that in countries that can’t sustain multiple competing vertically integrated corporate giants, the nuclear industry may have some of the characteristics of natural monopoly. This means the competition advantages attained by keeping multiple players operating could be outweighed by concentrating experience and capacity in one company.
- Accept government involvement: Successful countries have a high level of government involvement in their nuclear energy industries. Governments are better positioned to capture the broader national security, environmental and power system benefits provided by nuclear energy. Private companies find it difficult to recoup financial gains from these broader societal benefits. Risk of regulatory change is also very hard to price for a private entity, whereas the government rightly owns and controls this risk. The very long lifetimes of nuclear generators are also difficult for a commercial entity to appreciate when facing commercial interest rates. With the sole exception of the United States, every country in the world with an established nuclear power industry has had either significant government ownership in its first reactors, or been driven by privately-owned government regulated utilities; with at least some monopoly rights on electricity distribution to underwrite the investment.
As the debate around nuclear energy progresses, Australian policymakers should seriously consider the lessons from other countries. There appears to be a very strong case for the government being heavily involved in leading the establishment of the nuclear industry. Without government leadership, it seems unlikely that the necessary degrees of concentration and scale to make nuclear most cost-effective will be attained.
Introduction
There is currently bipartisan support in Australia for transitioning our economy to net zero by 2050. However, debate remains around whether a low-emissions, reliable and affordable supply of electricity can be achieved based on predominantly variable, weather-driven supply sources of wind and solar, or whether some contribution from high-reliability power is needed.
Given Australia lacks the geographic formations necessary to produce hydro power at large scale,
[1] and assuming carbon capture and storage remains expensive and difficult to scale, we have only one real supply option for providing high-reliability low-emissions power: nuclear. But currently the Australian government is adamant that the ban on nuclear won’t be lifted, citing cost as the reason.
[2]
CSIRO’s GenCost report is frequently cited as providing evidence that nuclear is too expensive compared to renewable energy.[3] However, CSIRO’s approach to costing nuclear energy is deeply problematic. They have chosen to sample just one particular project, of one particular reactor design (a novel reactor design), of one particular scale of reactor (small), in one country (the United States).[4] This project hasn’t yet been built, or delivered any power, and was recently cancelled. Yet nuclear technologies today make approximately 10% of global electricity, in 32 nations, from more than 400 operating reactors.[5] Choosing such an isolated, first-of-a-kind, incomplete project of a developmental design as an example isn’t suitable for serious and objective analysis.
In this paper, we propose a more credible and realistic approach to engaging with the costs of nuclear electricity, by examining a larger range of reactors across a number of different countries.
We analyse the nuclear industries of eight countries — the US, UK, Canada, France, Russia, Japan, South Korea and China — including using reactor-level data on costs, construction time and design. This country list isn’t exhaustive. We’ve sampled different parts of the world, and focused on those countries that have built enough reactors, over enough time, that drawing conclusions about trends and averages might be reasonable. We haven’t attempted to produce an exhaustive explanation of the evolution over time of nuclear costs within each country, though we find it varies. Many other researchers have explored the different trends observed within countries,
[6] including the impact of changing regulatory requirements
[7] and long pauses in construction on nuclear costs. Our research is consistent with those findings; our focus is comparing the structural differences between countries in the approach taken to construction.
We do not attempt to determine what nuclear power would cost in Australia. A quick glance at the history of nuclear will show it has cost different amounts in different countries at different times. Picking the ‘correct’ or ‘current’ price that would apply in Australia with any degree of precision is not possible — at least until you have made some decisions about how nuclear will be built.
This paper’s intent is to inform those decisions. We’re not seeking to answer ‘what does nuclear cost?’ since the credible answers span such a wide band. Instead, we intend to answer ‘how do we build low-cost nuclear
More….
Executive Summary Nuclear energy can be either very cheap or very expensive. Much ink has been spilled recently attempting to …
www.cis.org.au
There is a lot more in-depth explanation if you click the link above. Rather than clog up pages and pages. Very informative.
Some no doubt will attempt to brush it off. But if you have an open mind and wish to learn a bit more, it’s worth a read.
theconversation.com
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