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Jesse's avatar

I largely agree with the points you've raised Cam. The problem in the Aus context is how the economics of nuclear stacks up. On the one hand, you can attempted to build a nuclear reactor in 14 years (history and project management studies all indicate massive cost blow outs and delays are overwhelming likely - how big things get done is offering some great insights). Over that period of 14-20 years, you are sinking in time, labour, capital and significant amounts of debt with no energy generation. Then once the thing switches on, it has to compete in a grid where half the time it sells its electricity into the grid at spot negative prices (or sinks it and makes no money), while struggling to ramp up and down. It doesn't matter if the thing lasts 80 years because discount rates and economic life mean the later years have marginal pay off in present value terms.

Meanwhile you can build in modular succession, multiple turbines and PV panels, storage systems etc. Over that 14-20 year period. All producing power immediately. All roughly on time and on budget (based on historical data). The capital costs are not only lower but the pay off is much faster. Especially when Aus has some of the best renewables resources in the world.

The only way around this would be to include Nuclear in the Capacity Investment Scheme and subsidise it's zero sales price periods. Possible, but would it stack up in the tenders? Idk.

It doesn't mean we shouldn't do nuclear, given there can be value in diversification. The real question is... Diversification at what cost? I don't think this question has been adequately resolved in the Australian context

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Walter Faber's avatar

Thank you for having been open to changing your mind regarding this topic!

Indeed nuclear policy has been highly emotional and tribal in the past. I hope that new generations will grow up with a new take on it.

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