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GenCost: cost of building Australia’s future electricity needs

Large-scale nuclear costs are introduced

The inclusion of large-scale nuclear costs this year was driven by increased stakeholder interest in nuclear technology following updated cost estimates for SMRs in the 2023-24 consultation draft.

Applying foreign costs to large-scale nuclear projects in Australia is complex due to the lack of a domestic nuclear industry and significant global differences in labor costs, workforce experience, governance and standards.

The GenCost 2023-24 report team estimated large-scale nuclear costs using South Korea’s successful nuclear program. They adjusted for differences in Australia and South Korea’s implementation costs by comparing the cost ratio of new coal generation in each country.

GenCost concluded that nuclear power is more expensive than renewables and estimated a development timeline of at least 15 years, including construction. This reflects the absence of a local development portfolio, additional legal and security requirements and evidence from stakeholders.

Achieving the reported nuclear costs depends on Australia committing to a continuing construction program like South Korea’s. Initial units are likely to incur higher costs, and a one-off premium of up to 100 percent is possible, although it is not included in the cost estimates for nuclear power or other new electricity technologies in the report.