Electricity bills could spike under nuclear power plan
Household electricity bills could go nuclear if the energy source was introduced into Australia’s electricity mix, a new report claims.
The coalition’s plan to build seven small nuclear reactors across five states on the sites of coal-fired power stations could cause electricity prices to rise by hundreds of dollars, research from the Institute for Energy Economics and Financial Analysis shows.
Typical household electricity bills could increase by $665 a year on average, while a family of four could face a $972 increase, according to the report released on Friday.
Analysing six relevant nuclear projects in Europe and the US, including a cancelled US small modular reactor project, the report found electricity bills increased by hundreds of dollars in every scenario.
It was unable to examine the experience of small modular reactors, the type proposed by the coalition, because no plants had been successfully completed in a democratic country.
Nuclear-generated electricity costs would likely be 1.5 to 3.8 times than current electricity generation in eastern Australia, with capital costs associated with construction reaching $90 billion based on international examples, report co-author Johanna Bowyer said.
“For nuclear power plants to be commercially viable without government subsidies and generating 24/7, electricity prices would need to rise to these higher levels to allow the nuclear power plants to recover their costs,” Ms Bowyer said.
“This would result in a large increase in wholesale market prices which would then flow through to household bills.”
While costs associated with nuclear construction and financing don’t show up in the energy bills in nuclear nations, the report said that is because the plants are old and their costs have largely been paid off or governments had recouped costs through taxes separate from electricity prices.
The report investigated the impacts to household bills in NSW, Victoria, southeast Queensland and South Australia and found the annual increase ranged between $260 and $1259.
“For households with larger electricity use, they would see higher bill rises with nuclear,” Ms Bowyer said.
“In a cost-of-living crisis, bill increases like this are a big deal.”
But the bill shock could be even worse because of optimistic assumptions, including ignoring mid-life refurbishments, not regarding financial buffers for high construction risks and Australia’s limited nuclear capability, report co-author Tristan Edis said.
“Nuclear is often mistakenly perceived to be a cost-effective technology because it is in widespread use across the globe,” Mr Edis said.
“Yet most of the plants built in the western world were committed based on projected costs and time frames that turned out to be horrible underestimates.”
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