The only company to have a small modular nuclear power plant approved in the US – cited by the Australian opposition as evidence of a “burgeoning” global nuclear industry – has cancelled its first project due to rising costs.
NuScale Power announced on Wednesday that it had dropped plans to build a long-promised “carbon free power project” in Idaho. It blamed the decision on a lack of subscribers for the plant’s electricity.
The Coalition’s energy and climate spokesperson, Ted O’Brien, has cited NuScale’s technology as part of the opposition’s contentious argument that Australia should lift a national ban on nuclear energy and that small modular reactors (SMRs) could be an affordable replacement for its ageing coal-fired power plants.
In an opinion piece in the Australian earlier this year, O’Brien said the company’s integrated reactors, starting with the Idaho plant in 2029, offered “exceptional flexibility” and were an example “of a burgeoning nuclear industry for next-generation technology” in the US.
The climate change minister, Chris Bowen, said SMRs were “the opposition’s only energy policy”.
“The most advanced prototype in the US has been cancelled. The LNP’s plan for energy security is just more hot air from Peter Dutton,” he said.
O’Brien said the minister was “beating up on zero emissions nuclear energy” because one company had “lost a customer”.
“If Bowen was to apply the same faulty logic to all forms of zero-emissions technology, he’d be eliminating every single one of them,” he said, arguing wind, solar and hydro energy developers had suffered cost overruns and delays.
“SMR companies are accelerating their development because the world has recognised that we cannot reach net zero without nuclear energy. If Australia is serious about reaching net-zero emissions by 2050 while keeping the lights on and getting prices down, we cannot afford to take any option off the table.”
Industry experts say SMRs are not commercially available, that nuclear energy is more expensive than alternatives and in a best-case scenario could not play a role in Australia for more than a decade, and probably not before 2040. The Australian Energy Market Operator found renewable energy could be providing 96% of the country’s electricity by that time.
The Coalition opposes Labor’s goal of reaching 82% renewable electricity by 2030. It has argued for a slower response to the climate crisis and amplified local concerns about new clean energy and electricity transmission connections.
The projected cost of the NuScale project had blown out from US$3.6bn for 720 megawatts in 2020 to US$9.3bn for 462MW last year. It had received about US$600m in government funding, but failed after securing subscriptions for only 20% of the required capital from a Utah-based consortium of electricity companies. NuScale’s share price fell nearly 30% after the announcement.
Simon Holmes à Court, a clean energy advocate and commentator and convener of political fundraising body Climate 200, said the estimated capital cost of the Idaho project before it was cancelled was 70% higher than CSIRO projections of what nuclear power plants could cost to build in 2030.
He said this undermined arguments by the Coalition and other nuclear advocates, who had accused the CSIRO of exaggerating the likely cost of nuclear energy.
Holmes à Court said Australia needed a rapid rollout of solar, wind and energy storage. He recently toured nuclear power projects in the US.
“The simple fact is that commercial SMRs don’t exist. There are zero in operation or even contracted for construction outside Russia and China. The cancellation of one of the three leading proposals underscores the speculative nature of this far-off technology,” he said.
“More than two thirds of our coal generators will retire in the next decade due to age. By pushing a unicorn technology the Coalition is posing a threat to the cost and security of Australia’s electricity grid.”
• This article was amended on 9 November 2023 to correct the initial projected megawatt capacity from 7,200 to 720.