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Commitments to carbon emissions reductions and technological advancements such as Small Modular Reactors (SMRs) have seen nuclear energy re-enter policy discussions around the world. Despite Australia holding the most identified uranium resources (28%) in the world, policy discussions around nuclear have never resulted in more than a 20MW reactor at Lucas Heights in Sydney that produces isotopes for nuclear medicine.

Other countries don’t appear to have a problem using nuclear energy. According to the NEI, nuclear power made up 71.7% of power in France, 55% in Slovakia, and 19.3% in the USA in 2018. But does nuclear stack up in the Australian context right now?

Nuclear reactors today

Broadly speaking, nuclear reactors create energy in three stages. Firstly, a powerful fission reaction is released by splitting the nuclei of atoms (usually uranium ore), which generates a huge amount of heat and energy. This heat is then harnessed by using water to produce steam, which spins a turbine that ultimately produces electricity.

Today, the world’s fleet of nuclear power plants consist of a small number of established designs. According to the International Atomic Energy Agency, almost 89% of the 443 operating nuclear reactors are light water moderated reactors. The other types of reactors currently in operation include heavy water moderated reactors (10.8%), gas cooled reactors (3.1%) and liquid metal cooled fast reactors (0.7%). Reactor designs vary by cooling systems, reaction control technique, and method of converting heat to electricity.

Newer reactors, often referred to as Gen IV reactors, show potential improvements in terms of sustainability, economics, safety and reliability, and proliferation resistance and physical protection. The Generation IV Forum in 2001 proposed an implementation timeline of between 2020 and 2030 for Gen IV reactors, but none have progressed significantly beyond the design stage in 2021.

Nuclear reactor and coal-fired power plant similarities

Subsequent to the nuclear fission reaction, nuclear reactors and coal-fired power plants draw on the same turbine gallery, system cooling, and transmission line infrastructure that ultimately deliver power to households and businesses.

The operational similarities between coal-fired power plants and nuclear reactors mean that there is significant potential for facility repurposing and employability transfer. The prospect of employability transfer may be extremely valuable to small Australian towns currently dependent on coal-fired power stations, and represents a solution to impending labour force displacements as fossil fuels are phased out of Australia’s energy grid.

Various energy companies in the UK are submitting proposals to repurpose retired coal-fired plants. For example, regulators recently permitted Nuscale to build 12 reactors that will make use of the water, transmission lines, and general infrastructure of former coal-powered plants in Boise, Idaho. In the UK, 20 employees – including operator technicians, maintenance technicians and desk engineers – were transferred from the coal-fired Cottam Power Station to a new nuclear fleet.

Replacing coal-fired power plants

These considerations should be taken seriously, especially in Australia where coal continues to provide most of the nation’s energy and has structurally defined much of the grid. At present, coal-fired power plants are being retired at an unprecedented rate, and by 2040 60% of existing coal-fired generation nameplate capacity is expected to retire (see Figure 1).

Figure 1. Forecast coal-fired electricity generation nameplate capacity (MWh), 2021-41

Source: AEMO

In addition to sharing operational similarities, nuclear reactors and coal-fired power plants also dispatch baseload energy, a fact that cannot be overlooked. In lieu of coal, the Australian energy grid will require more than intermittent renewables. It will require a consistent and stable energy source that can still provide electricity when the sun isn’t shining and the wind isn’t blowing.

Pumped hydro, geothermal power plants, and nuclear reactors are the three frontrunners in terms of low-carbon, baseload electricity generating technologies. Each technology has its pros and cons, but one downside that is hard to miss with nuclear is its construction costs.

Construction costs

The deployment of nuclear power generators is characterised by large upfront capital costs and long periods of construction. Despite low refuelling costs, nuclear power plants still don’t stack up against other renewable energy sources in terms of levelized cost of electricity (LCOE) (see Figure 2). LCOE is a measure which accounts for both upfront capital costs, later refurbishments costs, and ongoing operational costs.

Figure 2. Historical mean unsubsidized LCOE values (US$/MWh) by technology, 2009-2020

Source: Lazard

In addition to this, the execution of nuclear reactor construction timelines and budgets has a poor track record. In a study looking at electricity infrastructure in 57 countries between 1936 and 2014, nuclear power plants had the largest average cost and time escalation out of the six electricity infrastructure types investigated. This included an average cost escalation of 117.3% (US$1,282m) and an average time overrun of 64%.

Small Modular Reactors (SMRs)

This is where SMRs, which have been gaining popularity in recent years, enter the picture. SMRs are scaled-down nuclear reactors that generally produce 300 MWe or less. Although SMR have lower generation capacities than existing reactors and fossil-fuel power plants, modules can be co-deployed on the same site to cumulatively provide as much as conventional coal-fired power stations.

Land-based water-cooled and marine-based water-cooled SMR designs have been deployed in China, Argentina, the US, and Russia. Additional designs including the high temperature gas cooled SMR, fast neutron spectrum SMR, and molten salt SMR are in preliminary licensing stages.

The scaled-down designs of SMRs offer many benefits, including:

• Cost-effectiveness and streamlined deployment: Due to their size, SMRs can be entirely constructed in a single factory. This means that SMR parts can be easily transported and assembled on-site, drastically reducing preparation times, capital cost, overall construction time, and risk of time overruns.
• Improved safety over traditional large reactors: SMRs are viewed as inherently safer than larger reactors. Firstly, their smaller nuclear cores generate less thermal output, thus rendering them less prone to overheating; and secondly, the smaller diameter of SMR containment shells means that they are able to withstand higher pressures.
• Load following capability: Co-deploying multiple SMRs on the same site offers significant operational flexibility as the number of modules operating at any one time can be adjusted according to electricity demand. In turn, electricity demand loads can be followed very closely.

Conclusion

Nuclear reactors are a prospect worth investigating and potentially developing in Australia. Technological advancements in SMRs that offer enhanced safety, more efficient construction processes, and employability opportunities for former coal-fired power plant workers mean that nuclear energy is becoming more appealing, especially in the Australian context. However, with current construction times, costs, and inconsistencies, it may be a few more years before their implementation is feasible.

Beyond the economics of nuclear electricity generation, there are considerable security (i.e. use of nuclear material for terrorism) and safety risks (i.e. meltdown and exposure to radiation) that must be taken seriously. These concerns have given rise to political problems in the past, which could mean that nuclear power will have to wait for societal views to change before the economics of nuclear power even enters the conversation.

This post was written by Research Officer Ben Scott with comments and suggestions provided by Director Gene Tunny. The content of this article is based on research that Ben undertook as part of an internship position under Queensland Senator Matthew Canavan. For any inquiries, please get in touch with the Adept team at contact@adepteconomics.com.au.