The Peter Dutton-led Coalition has announced that, if elected, the government will build seven nuclear power stations located across every mainland state.
One can understand the appeal of nuclear power to those who are unfamiliar with the history of the technology. Nuclear power has been with us for many decades, supplying large amounts of emission-free power across a wide number of democratic, developed countries in Europe and North America. Why wouldn’t we make use of a power source that can be turned up and down independent of the weather and which other developed nations have used for decades?
What many Australians probably don’t realise is that almost all of these nuclear power plants were constructed in the 1970s and 1980s. The technology was then largely abandoned as an option for new power supply. Over the 2000s there was talk of a renaissance of the technology as concerns around global warming grew, and the industry unveiled new “generation 3” designs to address nuclear meltdown risks. Yet this expected renaissance never eventuated, with just five generation 3 nuclear power plants under construction over the past decade across Europe and North America.
There is a very good reason for why the appetite to build new nuclear power stations in western nations that already have nuclear power is minimal. Fans of nuclear like to think this is just because of irrational fears of reactor meltdowns and radiation. But in reality it’s got more to do with the fact that nuclear power plants cost too much to build.
What several countries, particularly France and the United States, encountered during their nuclear build programs over the 1970s and 1980s was that the promised costs for nuclear reactors turned out to be badly underestimated. They also found that things didn’t improve as they built more of these reactors – instead they got worse.
Oxford University professor Bent Flyvbjerg, an expert in construction management, has built up a large database of the time and budget records for 16,000 major construction projects across the globe covering a wide array of fields. He finds that nuclear reactors encounter the greatest budget and time blowouts in his database of construction projects, with the exception of just two other project types. One, worryingly, is nuclear waste repositories, which Australia would also need to build. The other is host city Olympic Games infrastructure. Interestingly, Flyvbjerg’s database also reveals the projects which are most likely to achieve construction timeframes and budgets are wind and solar power.
The poor experience over the 1970s and 80s meant there was almost no new nuclear plant construction commitments in Europe and North America until the second half of the 2000s. The table below summarises the horrific budget blowouts with the five generation 3 reactors committed to construction since then. Of note is that the two projects in the US used the same reactor model Dutton has indicated he’d like to use – Westinghouse’s AP1000. Also worth noting is actual real world experience indicates costs for nuclear per megawatt of capacity, which are significantly higher than the $8.6m estimated recently by the CSIRO.
What we can see is that, contrary to the promises of nuclear technology companies, generation 3 designs did not improve on past experience of budget blow-outs. It should also be noted that one of these projects – Virgil C Summer – was abandoned prior to completion, as the cost blowouts became too great to bear. Unfortunately for South Carolina energy consumers, this was only after the expenditure of $13.5bn on the failed project.
So what does this all mean for you personally?
Contrary to Dutton’s claims, it means you’ll be paying more on your electricity bill. As the table above shows, exactly how much more will be subject to wide variation depending on how badly the construction process unfolds, as well as a range of other assumptions.
If we use Vogtle as an example, which is the one completed project that employed Dutton’s favoured Westinghouse AP1000 technology, the extra cost to consumers would be very high. Power retailers would need to pay prices for wholesale energy at least three times higher than what they currently pay to recover the cost of this plant. For the average household that would result in an increase in their power bill in the realm of $1,000 per year from Dutton’s plan to go nuclear.
• Tristan Edis is a director at Green Energy Markets – a provider of analysis and advice on energy and carbon abatement policy and markets
