Solving Australia’s Energy Trilemma with Nuclear Power

This paper has been prepared by Mr. Barrie Hill, Dr. Robert Barr and Mr. Robert Parker.
It examines all alternative for the supply of Energy on the National Electricity Market. It compares Renewables, Gas, Coal, Nuclear, Pumped Storage and a mix of all these options.

Click on the link below to go to the article

SOLVING AUSTRALIA’S ENERGY TRILEMMA WITH NUCLEAR POWER

We look forward to honest informed debate about our nation’s energy future and invite your comments.
A system which includes nuclear energy in a transition from coal to nuclear is found to be the least cost, lowest carbon intensity with the greatest reliability.

15 Comments
  • David Mathers
    Posted at 09:04h, 09 September Reply

    Yes yes yes

  • James Fredsall
    Posted at 13:44h, 09 September Reply

    A very good attempt to justify nuclear power for Australia, and being involved in the nuclear power business overseas, I commend you. However, (1) there is a government act forbidding such; (2) the state governments or private companies might insist to be the ones that would own and operate such plants; (3) there is little or no nuclear experience in this country to be involved in the near term in nuclear regulation, plant design, plant operation, or plant construction; (4) you mention the experience the South Korea has had and how this country could benefit – however President Moon is intending to establish a “nuclear free era”; (5) the Westinghouse AP1000 design is running into trouble being built in Georgia (current estimate for two units $19.8 US billion); (6) the AP1000 is also currently having trouble being built in South Korea; (7) I don’t believe the anti-nuke sentiments that have been voiced for so long in this isolated country will not be reversed until there is a clearly proven need for it.

    • Rob Parker
      Posted at 12:08h, 10 September Reply

      Thanks Jim and we are not blind to the hurdles but currently the NEM has failed comprehensively to provide Australia with either low cost or low carbon electricity.
      There are very good precedents for the design and implementation of a reactor program – the UAE being the most recent and the Kepco International Nuclear Graduate School in South Korea could certainly help massively with training.
      I see little virtue in designing a reactor – rather we use an existing design and an existing supply chain with the first reactors being built on a turnkey basis. Regarding President Moon – South Korea has 500 people per square kilometre (we have 3) and every bit of accessible land is currently used so good luck with renewables and gas is a strategic risk both price and availability wise. The air in Seoul is appalling. I suggest we keep watching the South Korean energy industry – there are very good reasons why it uses nuclear energy.
      Regarding the AP1000 – this reactor is a Westinghouse design that is not being built in South Korea. They built the OPR1000 and now the APR1400
      From my perspective, high prices, failing industry and climate change are converging as the great drivers for a nuclear rethink

  • Graham Davies
    Posted at 15:36h, 09 September Reply

    It is good that all options are on the table and that CO2 is considered and I like the idea of a systems approach. I do have a few questions:
    – How was SLCOE derived. So I have a few questions:
    – Which nuclear technologies were considered? eg. SMR, PWR, Gen3, Gen4?
    – How ‘dispatchable’ is nuclear? ie what is the ramp up rate? Coal requires pumped hydro because of its slow ramp rate – something the NEG overlooked
    – Why wasn’t distributed renewables considered with nuclear?
    – Hinckley C in the UK has a 30year strike price of $180/MWh – how did the authors arrive at a much lower figure? What $/t figure was used for the waste?
    – How was SLCOE derived? Its a great concept. Did it include despatchability, demand management (ie paid to switch off), FCAS, 5 minute bidding and reconciliation time periods, inverter vs synchronicity and how was this priced, transmission?
    – How is the $320/MWh for renewables derived, when currently PPAs are at $60-80/MWh. Finkel took this up to $130 when paired.
    We need to consider the full ambit of energy generation types to achieve the goal of affordable, reliable, quality and secure power – in which each technology pays its own externality costs (eg CO2, particulate matter, decommisioning.

    I commend the authors on looking at the economics of the energy mix holistically. It is very disappointing that the energy debate in political circles is so puerile. After all the energy discussions, I find it astounding that there was so little substance in the NEG and its modelling – even at the end, the xls spreadsheets provided were wholly inadequate for anyone to make a decision. Was it simply Much Ado about NEGthing.

    • Rob Parker
      Posted at 10:49h, 10 September Reply

      Graham,
      Thank you for your questions
      1. Robert Barr described his Energy Model to our group and out of that discussion the “System Levelised Cost of Electricity” was born. The model uses the NEM energy demand curve for 2017 at 17,520 half hourly points. It then matches the available generating plant to these points by ranking them in terms of marginal cost to create a merit order despatch. In this way the model is able to determine the actual capacity factors and load contribution of each generator and storage device throughout the year. Knowing their capacity factors and energy contribution to the NEM and their capital and operating costs enables the model to derive the individual cost proportion of each generator to the total system. By summating these cost the model comes up with the system levelised cost. In Appendix 1, Case 1, Figure 7 you will see an output table from the model that provides a result which arrives at the SLCOE.
      2. The model uses a PWR from South Korea as the basis of the nuclear cost. We targeted those reactors which are currently available and could be built immediately if we had the will.
      3. The model assumes nuclear behaves as a baseload generator. We have not used a ramp rate. The daily peaking load above base load is handled in the nuclear energy dominated scenarios by open cycle gas, solar PV, hydro and pumped storage.
      4. The nuclear scenarios do use renewables in the form of solar PV and hydropower. We excluded wind due to its volatility.
      5. The cost for nuclear was derived from the currently constructed reactors in South Korea at Shin Kori and built with an established supply chain and very experienced project management with experience in recent projects. They also use a significant levels of public investment
      The UK Hinkley C project has a strike price of £92.50/MWh and care needs to be taken in adopting a currency conversion to establish an Australian equivalence. The UK reactor is an EPR built in Europe using a supply chain that is being reconstructed following a long idle period in nuclear construction and using private funding. Future UK projects will have a much higher level of public funding or guarantee.
      6. Waste was not included for any generating types. It’s a complex issue that involves how much to allocate for decommissioning wind, solar, gas, coal or nuclear plants. How much to allocate for rare earth metal mines, coal mines, uranium mines etc. How much to allocate for materials recycling etc? It really involves a full comparative life cycle analysis of all technologies.
      7. Despatchability is handled within the model using a merit order based in lowest marginal cost. No demand management has been included nor are the other market operations devices. It is a cost and not a price model.
      8. Transmission costs are derived using the same cost rate for compact systems for all the model runs . Additional costs ore allocated where the generation is located over more dispersed regions.
      9. The high values of generation for renewables occur due to low use of standby gas generators with capacity factors of around 12% and substantial spillage. For example, in the 90% RE case, 27.4 percent of the RE is actually spilled and this has a major impact on plant utilisation. This effect then flows through into transmission and system services.

  • Peter Morgan
    Posted at 16:16h, 09 September Reply

    Taking a while to absorb the detail, but this looks really good. While the following comments might be outside the scope of the article, I put them forward for consideration.
    •. For the less-familiar with the abbreviations and terminology a page with explanations would help.
    •. There is a huge environmental cost associated with expansion of solar, wind and hydro through loss of habitat, agriculture, and extra infrastructure. The $ cost of this, particularly habitat, species loss and environmental services are difficult but important.
    •. The smaller footprint of nuclear, and assumed ease of tying in to existing infrastructure should(?. Eg, nuclear power station on site of removed coal-fired power station) add to the favourable cost compared to other RE.
    I don’t see the environmental costs considered as offsets to the cost of nuclear, and if they could be incorporated, the nuclear proposition would become even more attractive.
    Getting that out into the public discussion could assist in reducing a lot of the opposition to nuclear energy.

    • Peter Lang
      Posted at 10:24h, 10 September Reply

      Peter Morgan said:
      “I don’t see the environmental costs considered as offsets to the cost of nuclear, and if they could be incorporated, the nuclear proposition would become even more attractive.”

      True. Here is one estimate.

      If each technology was required to pay insurance or compensation for the annual cost of deaths caused by that technology, the amounts they would have to pay, in USA, per MWh are:

      Technology $/MWh
      Coal 141
      Natural gas 38
      Hydro 13
      Solar 4
      Nuclear 1

      Inputs used for the estimate:

      1. Value of a Statistical Life (VSL) in USA = $9.4 million (2015, https://www.transportation.gov/sites/dot.gov/files/docs/VSL2015_0.pdf )

      2. Fatalities per TWh (Source Forbes http://nextbigfuture.com/2012/06/deaths-by-energy-source-in-forbes.html )

      Coal electricity, world avg. = 60 (50% of electricity)
      Coal electricity, China = 90
      Coal, U.S. = 15 (44% U.S. electricity)
      Natural Gas = 4 (20% global electricity)
      Solar (rooftop) = 0.44 (0.2% global electricity)
      Wind = 0.15 (1.6% global electricity)
      Hydro, world avg. = 1.4 (15% global electricity)
      Nuclear, world avg. = 0.09 (12% global electricity w/Chern&Fukush)

      3. USA Electricity generation per technology in 2014 (source EIA), TWh https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_1

      Coal = 1,581,710
      Natural gas = 1,126,609
      Nuclear = 797,166
      Hydro = 259,367
      Solar = 17,691
      Other renewables = 261,522

  • Shane chapman
    Posted at 21:38h, 09 September Reply

    When will everyone wake up

  • Peter Lang
    Posted at 23:27h, 09 September Reply

    Reasons Australia should go nuclear are, it (links refer to http://www.mdpi.com/1996-1073/10/12/2169/htm ) :

    1. is the safest way to generate electricity and always has been since the first power reactor began supplying power to the grid in 1954 (Appendix B, Note VIII)
    2. is sustainable – nuclear fuel is effectively unlimited
    3. provides reliable, dispatchable electricity
    4. provides countries with a high level of energy security – many years of fuel supply can be stored in a small space at low cost so countries are not vulnerable to disruption of fuel supply during periods of trade or military conflicts
    5. is highly flexible in small modular reactors – consider the flexibility of nuclear powered submarines and ships, as has been demonstrated over the past 60 years; also see Irwin (2017) submission to the Australian Energy Security Board on SMR technologies.
    6. has almost unlimited potential for cost reductions over time, if the impediments to progress are removed.
    Other economic benefits and policy implications are presented in Sections 3.5 and 3.6.

    Further to ‘Nuclear power is the safest way to generate electricity’ – it is about 150 times safer than coal:
    • Australia’s electricity consumption is around 200 TWh per year
    • On a full life cycle analysis basis, generation with coal in US and Europe causes about 15 deaths/TWh (world average is about 60 deaths/TWh)
    • Assuming Australia’s rate is the same as US and Europe, coal fired electricity generation would be responsible for about 3000 deaths per year
    • In contrast, deaths per TWh from nuclear is about 0.04/TWh (life cycle analysis using best estimates of long term deaths from Chernobyl and Fukushima, or 0.09/TWh using high end estimates)

    However, it is not economically viable for Australia, and probably will not be for a long time. Reasons are:

    1. We’d have to implement regulations similar to those in the US, Canada, UK. Europe. These make the cost of nuclear power uneconomic in developed countries:
    o It takes >10 years and $10 billion to get a new design approved, even for small reactors, and similar ridiculous time and cots for even small design changes. The whole regulatory process is ridiculously long and costly. This is totally unwarranted given that nuclear is the safest way to generate electricity and always has been.
    o The cost of security at nuclear plants is horrendous and totally unjustified (if not for the baseless fear generated by 50 years of anti-nuclear protest movement and activists threats to damage reactors.
    2. The cost of building infrastructure in Australia is around twice the cost of building equivalent infrastructure in the US (hospitals, schools, desalination plants, airports, etc.)
    o This is largely due to the control exercised by the building construction unions and collusion between unions and the construction industry
    3. Even if the regulatory constraints were removed overnight and the premiums due to labour costs were removed it would take many decades for costs to come down.
    o In the 1960’s overnight construction costs of nuclear power plants were reducing at about 25% per doubling of global capacity http://www.mdpi.com/1996-1073/10/12/2169/htm . Capacity doublings were occurring about every three years before the disruption (after which costs rose rapidly).
    o If nuclear power construction costs in developed countries could suddenly return to the rate of 25% cost reduction per doubling of global capacity, it would require the world build 500 GW of nuclear capacity to reduce cost by 25% and another 1000 GW to reduce by another 25%.
    o We’ve missed the bus massively thanks to the anti-nuclear power protest movement.
    4. For more on this see: https://www.thegwpf.com/what-could-have-been-if-nuclear-power-deployment-had-not-been-disrupted/

  • Graeme Sanders
    Posted at 13:22h, 10 September Reply

    The case is impressive except for one very important detail.
    It does not address what we do with high- and low-level waste.
    This is the critical argument against nuclear put forward by the emotionally-driven anti-nuclear-power lobby.
    Most important is WHAT will be done with the waste. Of secondary importance is what will be the COST of dealing with the waste, which will add to the levelized cost of the overall generation.
    UNLESS THESE ISSUES ARE DEALT WITH, NO-ONE IS GOING TO EVEN LISTEN TO A NUCLEAR PROPOSAL. The anti-nuclear lobby has built up such a high emotional wall against nuclear power that the proposal will not even get to first base. (Make no mistake. Along with James Lovelock and James Hansen I am strongly in favour of nuclear power.)
    Could I also suggest that you try to run the economic arguments past Ross Gittens of the Sydney Morning Herald. Maybe even ask him to write about it in the SMH. He is generally fairly objective and it could help to get the economic issues across to a much wider audience, including our politicians

    • Rob Parker
      Posted at 12:41h, 12 September Reply

      Graeme – I sent the article to Ross Gittens at your suggestion.
      Regarding used nuclear fuel
      Opponents of nuclear energy put up emotional roadblocks and are not disposed to accepting “technical” solutions regardless of their merit. Most do not compare the relative risks of climate change vs the infinitesimally small risks associated with used fuel storage.
      Even if their concerns on storage were fully addressed, another barricade would be erected.
      So to the technical – the South Australia Royal Commission identified the use of storage in deep geological deposits to be the best approach – 500m down in granite with no water permeation – its not going anywhere for ever.
      Many of us think this is a great waste and don’t classify the first pass of fuel rods through thermal spectrum reactors such as PWR’s to be waste at all. In our perception it needs careful above ground storage until fast spectrum reactors re-use this material and get another 80 times more energy out of it. Along the way the isotopes with long half lives such as plutonium, neptunium, americium, curium et al are burned and all we end up with are shorter lived fission products which give us a 300 year issue rather than 240,000 year one.

  • Matthew Stocks
    Posted at 12:30h, 12 September Reply

    For any study to be credible, you need to provide the data to support your assumptions. Release the model for the world to use and understand.

    Anyone can produce a secret model with carefully manipulated assumptions that purports to show that coal is better, or gas, or renewables. Put the data in the public domain and demonstrated that this is really the case.

    Cheers,
    Matt

    • Rob Parker
      Posted at 12:46h, 12 September Reply

      Fair point – have you read the description of how the model works in the article?
      I’m more than happy to discuss it with you.

      • Matt Stocks
        Posted at 21:57h, 12 September Reply

        G’day Rob,

        Thanks.

        Yes – I have read the article. I am trying to understand the numbers behind the figures.
        For example.
        What are the cost assumptions for nuclear, coal, gas, wind, solar, hydro, pumped hydro? Capex $/MW and Opex.
        What are the fuel cost assumptions for nuclear, coal and gas? $/GJ Thermal conversion efficiencies?
        How did you decided to apportion the costs between transmission and distribution?

        Can you put these in the article?

        Cheers,
        Matt

  • Tim B
    Posted at 15:51h, 16 September Reply

    What a joke. Pro-nuke folk fail to inform punters that building 20 nuclear kettles scores a massive carbon deficit: that it takes many decades to remit the GHGE from construction plus mining, transport, & processing of ore. Let alone securing waste for centuries. Building these things will worsen global warming not lessen it. LOL

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