Compact nuclear power units may blow wind away

When the issue of nuclear power was raised by South Australian Premier Jay Weatherill last month, green activists quickly pointed out that nuclear power is more expensive than almost any other form of energy in Australia.

That is true up to a point, but activists should not start throwing stones in glass greenhouses, especially when it comes to the complex issue of trading off costs against emissions and reliable production of electricity, and should be concerned about the possibility of manufactured nuclear plants elbowing out green energy.

For those interested in the costs of different sources of energy, both the US Energy Information Administration and the Australian Bureau of Resources and Energy Economics have produced what are known as Levelised Cost of Energy comparisons.

These can be complicated, as they depend on a host of factors including the country and region in which the power is produced, and the cost of capital decades into the future, but the basic message is clear. Unsubsidised wind power can compete, on a cost-per-output basis, with the likes of coal and gas, while the other forms of green power - photovoltaics and solar thermal - trail the field by a fair margin, with the possibility of future improvement. Nuclear power is about 20 per cent more expensive than wind.

But that is just on a levelised cost basis and, as the EIA comparison points out, power sources have to seen as part of a mix of generating units in a 24-hour seven-day-a-week system balanced constantly for frequency and voltage. Overall costs can change depending on the other types of energy sources being used, which have to be operated to work around alternative energy generators, as those are not "dispatchable" - they cannot be directed to switch on and off. As the EIA comparison says, dispatchable and intermittent generators are in different categories and "caution should be used in comparing costs".

Back in Australia, the Warburton review on the renewable energy scheme released late last year estimates that renewables have already consumed $9.4 billion in subsidies since 2001 and will absorb another $22 billion in net present value to 2020.

So wind costs, remains intermittent, and is set to face increasing competition from small modular reactors. Unlike the 1600-megawatt behemoths that have dominated nuclear electricity production until now, these are well designed versions of the type of reactors that have been used in nuclear submarines for decades that would be manufactured and shipped as a single unit capable of producing anywhere between 10MW and 300MW.

In theory, because they are manufactured to a standard design, and contain various passive safety features, they should be a lot safer than any reactor built on site.

The very vocal green community is not about to accept such assurances and has expressed horror at the increase in radioactive waste that would have to be safely stored.

The Union of Concerned Scientists has produced a report blasting the likely safety of such reactors.

Compact reactors also come at a steep price.

A report from the World Nuclear Association says that a 160MW reactor produced by the US company Holtec that can shrug off earthquakes and tsunamis, and is now going through approval processes, will cost $US800 million ($1026 million).

That purchase price buys a big tube about 65 metres tall that simply requires the right fuel rods to start generating electricity. The tube is installed upright, but buried so that two-thirds is below ground.

The land required, various outbuildings and connections would be extra. The mid-level waste generated - fuel rods have to be changed every three to four years - can be stored on site for years before the question of long-term storage arises.

In contrast, a Bureau of Research and Energy Economics report issued in November states that the Jupiter wind farm being developed by EPYC in New South Wales, a short drive from Canberra, has a planned capacity of up to 350 MW and an estimated capital cost of $400 million.

Case closed? Not quite. Wind is a variable energy source with the commonly accepted capacity factor (average output) for wind farms being 30 per cent, as opposed to around 90 per cent for the likes of nuclear reactors, and their output is dispatchable, making it considerably more valuable.

Wind turbines, left out in all weathers, are usually expected to last about 20 years, while the WNA information claims a life span of 80 years for the Holtec reactor.

Nuclear might still seem expensive, but just as the price of wind and photovoltaic units has dropped due to additional demand, the price of off-the-shelf reactors may also come down - and they do not generate any emissions. Wind enthusiasts should watch out.