Examining The Impact Of Proposed Nuclear Power Plants On Australian Household Electricity Bills – Report

Australia’s opposition party, the Liberal-National Coalition, is pushing for the construction of seven nuclear power plants across the country, which could significantly impact household electricity bills. This report analyzes the potential effects on consumer electricity costs based on real-world construction data from nuclear plants around the globe, rather than just theoretical estimates.

The study examines recent projects like Finland’s Olkiluoto Unit 3, France’s Flamanville Unit 3, the UK’s Hinkley Point C, and the US’s Vogtle Units 3 and 4. For small modular reactors (SMRs), which have yet to be completed in a democratic country, the IEEFA report uses the canceled NuScale project as a reference point. Costs from the proposed Czech Republic Dukovany plant are also included.

The findings reveal that electricity bills would need to rise to cover nuclear power costs. On average, households could see an increase of around AUD 665 per year. For those with higher electricity usage, such as larger families, the impact could be even greater, reaching AUD 972 for a four-person household and AUD 1,182 for a five-person household. The lowest estimated increases come from the Dukovany project, which suggests bills might rise by AUD 260 to AUD 353 annually, while the UK’s Hinkley Point C indicates potential hikes of over AUD 1,000

The variation in costs across different countries highlights the uncertainties surrounding nuclear power, especially for SMRs. Most countries using nuclear energy have older plants with costs largely covered, or their expenses are managed through government subsidies or other means, which isn’t the case for the Coalition’s proposal. They have ruled out taxpayer support, expecting nuclear power plants to recover costs through the electricity market alone.

High recent costs for nuclear projects are a significant concern. For example, the European Pressurized Reactor projects have faced major delays and budget overruns. The required cost to produce electricity from these plants could range from AUD 250 to AUD 346 per megawatt-hour (MWh) in Australia. The Vogtle plant, which encountered significant delays and budget increases, indicates that achieving similar plants in Australia could lead to costs between AUD 197 and AUD 220 per MWh.

In the context of SMRs, the estimated levelized cost of electricity could be around AUD 289 per MWh. However, costs could rise further if construction takes longer than planned. Capital costs for recent nuclear builds have often exceeded initial estimates, creating financial stress for involved companies. Notably, Westinghouse and France’s AREVA faced bankruptcy challenges related to their nuclear projects.

The proposed plan for seven nuclear plants in Australia may lead to even higher costs than seen internationally, mainly due to the country’s limited nuclear experience and the small scale of the proposed projects. Unlike countries with established nuclear programs, Australia would miss out on the cost efficiencies seen with larger, continuous builds.

In summary, the introduction of nuclear energy in Australia, as proposed by the Coalition, could result in substantial increases in household electricity bills. This report suggests a careful evaluation of the financial implications and encourages consideration of alternative energy sources, such as renewables and energy storage solutions, to provide a more viable path forward for the nation’s energy needs.