Is renewable energy really more expensive than nuclear or fossil fuels in australia
Executive summary
The best available, repeatedly updated Australian analysis — CSIRO’s GenCost in partnership with AEMO — concludes that new nuclear-energy-costs">renewable generation (wind and utility-scale solar) firmed with storage and transmission is the lowest-cost pathway for Australia’s electricity system to 2050, while nuclear is substantially more expensive and slow to deploy [1] [2]. Multiple industry and research groups have echoed that nuclear projects would likely cost at least twice as much as renewables once full system costs are included and the first-of-a-kind premium is counted [3] [4] [5].
1. Why mainstream Australian modelling finds renewables cheapest — and what “cost” includes
CSIRO/AEMO’s GenCost reporting explicitly compares levelised costs that bundle capital, fuel, transmission, storage/firming, decommissioning and other lifetime costs so that variable renewables are judged on a like‑for‑like basis against dispatchable technologies; those reports have found wind and solar (with storage and transmission) to be the cheapest new-build options since 2018 [1] [6]. Government statements and industry groups cite GenCost’s finding that renewables plus storage deliver lower LCOEs than new coal, gas and nuclear, and that renewables remain the cheapest new-build generation to 2050 even when accounting for required firming [2] [7] [6].
2. Nuclear’s price tag: models, first-of-a-kind risk and long lead times
CSIRO’s draft GenCost and related reporting estimate a large-scale reactor would cost many billions (CSIRO cited at least $8.5 billion) and produce electricity at roughly double the cost of renewables, noting timelines of 15–20 years for delivery in Australia because of regulatory, workforce and site-preparation work [4] [3]. Independent commentary and peak bodies reiterate that the first reactors built in a country without an existing civil nuclear industry carry heightened cost‑overrun and delay risks, pushing their comparative cost well above renewables firmed with storage [3] [8].
3. Fossil fuels aren’t necessarily cheaper once full system effects and subsidies are considered
Analysts point out that coal and gas can set high wholesale prices when they act as marginal suppliers and that fossil fuels benefit from subsidies and tax treatments that distort direct cost comparisons; CSIRO/AEMO and think-tank reviews show gas and some fossil options are costlier than renewables when system integration and fuel volatility are included [9] [6] [1]. Energy Fact Check and Clean Energy Council syntheses of GenCost emphasise that renewables firmed by storage, plus flexible generation where needed, provide the lowest‑cost system pathway as coal retires [6] [8].
4. Arguments and modelling claiming nuclear could be cheaper — and their limits
Political proposals and some private modelling (for example work cited by Coalition proponents and Frontier Economics) claim nuclear, particularly small modular reactors (SMRs), can be cheaper than a renewables-led pathway and promise large savings; those claims have been questioned by academic reviewers and the GenCost authors who say the modelling’s cost assumptions and timelines do not withstand scrutiny and that real-world SMR experience is lacking [10] [7]. Critics note that other studies (Lazard, AEMO experience) still place firmed renewables as more cost-effective than nuclear, and that black‑box modelling claiming large savings requires transparent assumptions to be credible [11] [10].
5. Practical implications: bills, reliability and timing
Beyond per‑MWh cost numbers, analysts repeatedly flag timing as a decisive factor: Australia’s ageing coal fleet faces retirements before a domestic nuclear industry could realistically deliver first power, meaning delays would risk higher bills and reliability gaps if nuclear were depended upon as the primary replacement [3] [8]. Conversely, accelerating renewables, transmission and storage is judged by GenCost and AEMO to be deliverable faster and at lower overall system cost, reducing exposure to fuel‑price volatility and large capital risks [2] [1].
6. Bottom line and caveats
On the balance of publicly available, peer‑reviewed and government‑commissioned Australian analysis, renewables (wind and solar) firmed with storage and transmission are currently and prospectively cheaper than nuclear and generally cheaper than new fossil generation once full system costs and subsidies are accounted for; nuclear is judged to be more expensive, slower and exposed to first‑of‑a‑kind cost overruns [1] [3] [4]. That conclusion rests on current technologies, market designs and the GenCost assumptions; alternative models claiming nuclear savings exist but have drawn sustained critique for opaque assumptions and optimistic timelines [10] [11]. If new evidence, different cost trajectories for SMRs, or major policy changes on subsidies emerge, the economics could be reassessed — but the transparent, repeated finding from CSIRO/AEMO and corroborating organisations today is clear: renewables are not more expensive than nuclear in Australia [2] [6].