Which is cheaper: nuclear or renewables?

Australian Energy Minister Chris Bowen has exposed the weakness of his government's energy position in a misjudged political haymaker aimed at the Leader of the Opposition Peter Dutton.

Mr. Dutton has said that a Liberal government would remove the impediments to nuclear power in Australia and suggested reactors could be sited where the soon-to-be-decommissioned existing coal-fired power stations stand.

Mr. Bowen claimed that this would cost the country $387 billion (US$250 billion). But what does he mean by cost and compared to what?

The Opposition's position isn't that they will pay for nuclear power stations and give the electricity away for free. Their position is that nuclear ought to be in the mix. It will be left up to operators as to whether nuclear power stations are built.

In which case, the stations would have to be more economical than the alternatives and the proposal would actually save the taxpayer money.

What Minister Bowen has done is estimate the total cost of replacing 21.3 GW (gigawatt) with small modular reactors, but that would be an investment, and the cost would be repaid by consumers over the life of the plant out of their (lower) power bills.

It's not as though there is a source of electricity standing by ready to tap which is free.

But even here he has used a price to construct SMRs which is larger than the best international estimates.

Several issues with the figures

Mr. Bowen is relying on the government science agency CSIRO's GenCost report. But there are serious problems with this report, and indeed the credibility of the agency, on energy matters.

No one I know in the industry can make sense of their costs, particularly when it comes to nuclear.

Australian Climate Change and Energy Minister Chris Bowen launches the National Electric Vehicle Strategy at a press conference outside Parliament House in Canberra, Australia, on April 19, 2023. (AAP Image/Lukas Coch)

Mr. Bowen is using a capital cost of $18,167 per kW (kilowatt). This is what CSIRO calls their "High Assumption" which also uses a capacity factor of 60 percent.