Here’s a bit of history for you…
When the Irish defenders of Aughrim Castle cracked open their ammunition boxes, they discovered that English musket balls were too big for their French flintlocks.
Oops…
History rhymes…so they say.
Nuclear power may look like a silver bullet for Australia’s energy problems.
But I’m here to tell you that nuclear just isn’t going to fit into Australia’s electricity grid.
I better explain why…
The real benefit of nuclear
power is the unseen
The true cost of renewables lies in their indirect expenses. For example, having to upgrade the electricity grid, build batteries, and build long distance interconnectors.
Then we have the vast tracts of land needed. And keeping our fossil fuel power system on backup for when intermittency strikes…
None of these costs are directly attributable to renewables. But they are part of a grid that runs on renewables.
Nuclear power’s biggest benefit is that it rids us of a huge chunk of these indirect costs. We wouldn’t need to build vast subsea interconnector cables. We wouldn’t need batteries or a backup fossil fuel grid either.
Would we?
Well, that’s my worry…
Diversification is expensive
The Australian Energy Market Operator (AEMO) is currently being roasted by the blogosphere for manipulating their cost estimates for different forms of energy.
To cut a long story short, the AEMO presumed that a large part of the indirect costs, such as the grid upgrade and batteries, would get built regardless. And so it didn’t include much of their cost in the estimates.
This meant the cost of renewables looks artificially cheap. And nuclear looks comparatively expensive. Because it is robbed of the key cost saving it generates.
But I’m beginning to think the flawed analysis has a very good point. Because a lot of that renewables-based infrastructure really is going to get built regardless.
If we take vast investment in renewables, the grid, batteries and all the rest of it as a given, then nuclear really doesn’t make much sense anymore. Not even a small amount.
Why?
Well, nuclear wouldn’t save us much money by preventing all the expensive investment in the grid.
Unless the government abandons renewables and vast electricity infrastructure projects, nuclear doesn’t make sense.
It gets worse. If we prioritise using the electricity coming from renewables, nuclear is only left producing at the margins when needed. And nothing makes nuclear more expensive than cutting the amount of time it’s producing at full capacity. That’s because most of its costs are fixed. The less you use it, the more expensive it becomes.
The AEMO analysis applies an incredibly low capacity factor of 53% in its study of nuclear’s costs. This has been roundly lambasted by the blogosphere. In practice, nuclear power plants have a capacity factor of around 80%, and for decades longer than AEMO estimates. Old nuclear is performing at more than 90% consistently over time around the world.
But what if the 53% assumption is entirely correct because our nuclear power would have to give way for renewables? We’d only need nuclear when the sun isn’t shining and the wind isn’t blowing. About 53% of the time, I reckon.
What if the analysis is putting its finger on the scale, not to make nuclear look unfairly expensive, but because that’d be the reality on the ground?
Nuclear power is hardly cost efficient if it is only operating when it is needed
Solar is already dominating the share of electricity production at peak production times. This means that solar is providing enough power to butt out nuclear.
How economic is a nuclear power plant that curtails production whenever its sunny? In Australia…
Negative pricing at peak production times is already undermining investment in renewables.
The Australian governments is already taxing rooftop solar producers feeding the grid because there’s too much power.
Adding nuclear would make these problems worse, or leave the nuclear plant unused a great deal of the time.
What about a small amount of nuclear to get us through the dark and windless nights?
Nuclear just isn’t cost effective at that capacity factor. That’s the point of AEMO’s report.
If we consider how often nuclear would actually get used in Australia’s predicted future grid, it really would be very low and therefore very expensive.
Nuclear, as it is likely to be used in Australian conditions, doesn’t make sense. We have too much renewable energy already for nuclear to play a cost-effective role.
The conclusion is that nuclear power only makes sense if it is given priority to produce over renewables, so that it is operating at very high capacity factors all the time. But this would undermine renewables, dramatically. Just as prioritising renewables undermines nuclear today.
Our government is in a massive pickle. It doesn’t matter which party either. Unless the energy transition becomes an all-out race for nuclear at the expense of renewables, we won’t turn to nuclear.
We’re on course for a decade of energy chaos under renewables instead. And the only viable solution would mean dismantling everything we’ve been doing until now — too radical to consider.
Until next time,
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Nick Hubble,
Editor, Strategic Intelligence Australia
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