Nuclear Power’s Economic Crisis and its Implications for Australia

December 2021 report by Friends of the Earth Australia, ‘Nuclear Power’s Economic Crisis and its Implications for Australia’.

The full report is available as a PDF.

The introduction (minus references and footnotes) is copied below.


Despite the abundance of evidence that nuclear power is economically uncompetitive compared to renewables, the nuclear industry and some of its supporters continue to claim otherwise. Such claims are typically based on implausible cost projections for non-existent reactor concepts. For example the Minerals Council of Australia conflates self-serving, implausible company estimates for small modular reactors (SMRs) with “robust estimates” based on “conservative assumptions”. And the Australian Nuclear Association bases its claim that nuclear power is Australia’s “least cost low carbon energy option” on the non-existent BWRX-300 SMR.

Claims about ‘cheap’ nuclear power certainly don’t consider real-world nuclear construction projects. Those following real-world developments have come to the opposite conclusion. Indeed supporters of nuclear power have issued any number of warnings in recent years about nuclear power’s “rapidly accelerating crisis” and a “crisis that threatens the death of nuclear energy in the West” while pondering what if anything might be salvaged from the “ashes of today’s dying industry”.

Consider the following statements, many of them from industry insiders:

  • “I don’t think we’re building any more nuclear plants in the United States. I don’t think it’s ever going to happen. They are too expensive to construct.” ‒ William Von Hoene, Senior Vice-President of Exelon, 2018.
  • Nuclear power “just isn’t economic, and it’s not economic within a foreseeable time frame.” ‒ John Rowe, recently-retired CEO of Exelon, 2012.
  • “It’s just hard to justify nuclear, really hard.” ‒ Jeffrey Immelt, General Electric’s CEO, 2012.
  • “We see renewables plus battery storage without incentives being cheaper than natural gas, and cheaper than existing coal and existing nuclear.”‒ Jim Robo, NextEra CEO, 2019.
  • France’s nuclear industry is in its “worst situation ever”, a former EDF director said in November 2016 ‒ and the situation has worsened since then.
  • Nuclear power is “ridiculously expensive” and “uncompetitive” with solar. ‒ Nobuo Tanaka, former executive director of the International Energy Agency, and former executive board member of the Japan Atomic Industrial Forum, 2018.
  • “In developed markets, we see little economic rationale for new nuclear build. Renewables are significantly cheaper and offer quicker payback on scalable investments at a time when power demand is stagnating. New nuclear construction requires massive upfront investments in complex projects with long lead times and risk of major cost overruns.” S&P Global Ratings, 2019.
  • Compounding problems facing nuclear developers “add up to something of a crisis for the UK’s nuclear new-build programme.” ‒ Tim Yeo, former Conservative parliamentarian and now a nuclear industry lobbyist, 2017.
  • “It sometimes seems like U.S. and European nuclear companies are in competition to see which can heap greater embarrassment on their industry.” ‒ Financial Times, 2017, ‘Red faces become the norm at nuclear power groups’.
  • “I don’t think a CEO of a utility could in good conscience propose a nuclear-power reactor to his or her board of directors.” ‒ Alan Schriesheim, director emeritus of Argonne National Laboratory, 2014.
  • “New-build nuclear in the West is dead” due to “enormous costs, political and popular opposition, and regulatory uncertainty” ‒ Morningstar market analysts Mark Barnett and Travis Miller, 2013.
  • “Nuclear construction on-time and on-budget? It’s essentially never happened.” ‒ Andrew J. Wittmann, financial analyst with Robert W. Baird & Co., 2017.
  • “Nuclear power and solar photovoltaics both had their first recorded prices in 1956. Since then, the cost of nuclear power has gone up by a factor of three, and the cost of PV has dropped by a factor of 2,500.” ‒ J. Doyne Farmer, Oxford University economics professor, 2016.

Several reasons can be posited for the crisis which led Bob Carr ‒ a former nuclear supporter, NSW Premier and Australian Foreign Minister ‒ to describe nuclear power as lumbering, cripplingly expensive and moribund:

  • The Fukushima disaster in Japan in 2011.
  • A suite of economic challenges: catastrophic cost overruns with reactor projects; nuclear power’s negative learning curve (it has become more expensive over time); and nuclear power’s inability to compete economically with renewables.
  • Nuclear corruption scandals in many ‒ perhaps most ‒ of the countries operating nuclear power plants.

Other reasons could be added to that list, such as the failure to find solutions to manage long-lived nuclear waste, and the explosion in the world’s only deep underground nuclear waste repository in 2014.

This paper focuses on nuclear power’s economic problems ‒ catastrophic cost overruns with reactor projects, and nuclear power’s large and worsening economic disadvantage relative to renewables.


Every power reactor construction project in Western Europe and the US over the past decade has been a disaster:

  • The only reactor construction project in France is 10 years behind schedule and the current cost estimate of A$30.6 billion is 5.8 times greater than the original estimate.
  • The reactor under construction in Finland is 13 years behind schedule and the current cost estimate is 3.7 times greater than the original estimate.
  • The Hinkley Point nuclear plant in the UK was meant to cost £2 billion per reactor and be complete by 2017; but construction hadn’t even begun in 2017 and costs have increased more than five-fold.
  • The V.C. Summer project in South Carolina was abandoned after the expenditure of around US$9 billion.
  • The Vogtle project in Georgia is six years behind schedule and costs have doubled.

Western Europe and the US provide the most striking examples of nuclear power’s crisis and the most striking examples of a more generalised problem: alone among energy sources, nuclear power has become more expensive over time, or in other words it has a negative learning curve.

Section 5 discusses nuclear power globally and in important countries other than those in Western Europe and North America. Suffice it to note here that nuclear power is struggling almost everywhere. China is said to be the industry’s shining light but nuclear growth is modest (an average of 2.1 reactor construction starts per year over the past decade) and paltry compared to renewables (2 gigawatts (GW) of nuclear power capacity added in 2020 compared to 135 GW of renewables).

Outside of China, the writing is on the wall: 48 power reactor start-ups and 98 permanent shut-downs from 2001‒2020 as well as a looming wave of shut-downs because of the ageing of the world’s reactor fleet and, in some countries, nuclear phase-out policies. Globally, renewable power capacity grew by a record 256 GW in 2020 (four times greater than Australia’s total capacity) compared to 0.4 GW for nuclear power.

Small reactors have a history of failure. Recent and current SMR construction projects are few and far between and exhibit familiar patterns of lengthy delays and large cost overruns:

  • The SMR under construction in Argentina is seven years behind schedule; the cost exceeds A$1 billion for a plant with the capacity of two large wind turbines; and the current cost estimate is 23 times higher than preliminary estimates.
  • Russia’s floating nuclear plant ‒ said to be the only operating SMR in the world ‒ was nine years behind schedule, more than six times over budget, and the electricity it produces is estimated to cost an exorbitant A$284 / megawatt-hour (MWh).
  • The high-temperature gas-cooled SMR in China is eight years behind schedule, plans for additional reactors at the same site have been dropped, the cost is 2‒3 times higher than initial estimates, and hopes that the reactor could produce cheaper electricity than large nuclear reactors have been dashed.
  • China recently began construction of an SMR based on conventional light-water reactor technology. According to China National Nuclear Corporation, construction costs per kilowatt (kW) will be twice the cost of large reactors, and the levelised cost of electricity will be 50% higher than large reactors.
  • Russia recently began construction of an SMR based on fast reactor technology. Construction was expected to be complete in 2020, but didn’t even begin until 2021. The construction cost estimate has increased by a factor of 2.4.

Sections of the nuclear industry ‒ and some outside the industry ‒ claim that SMRs have a bright future. Those claims have no factual or logical basis. Everything that is promising about SMRs belongs in the never-never; everything in the real-world is expensive and over-budget, slow and behind schedule. Moreover, there are disturbing, multifaceted connections between SMR projects and nuclear weapons proliferation, and between SMRs and fossil fuel mining.

Nuclear power ‒ large or small ‒ has become far more expensive than renewables and the gap widens every year. Research by the CSIRO and the Australian Energy Market Operator demonstrates that nuclear power is far more expensive than renewables plus backup power in the Australian context. Research by the same organisations demonstrates that nuclear power is far more expensive than renewables plus integration costs (transmission, storage and synchronous condensers).

Support for nuclear power in Australia has no logical or rational basis. The persistence of that support can be attributed to several factors:

  • Ignorance.
  • Commercial interests (direct nuclear interests as well as indirect interests ‒ Australian economist Prof. John Quiggin notes that “in practice, support for nuclear power in Australia is support for coal).
  • Ideological ‘culture wars’. Former prime minister Malcolm Turnbull describes nuclear power as the “loopy current fad … which is the current weapon of mass distraction for the backbench.”

All three reasons may partially explain the Minerals Council of Australia’s ongoing disinformation campaign regarding nuclear power, discussed in section 4.

The same reasons could explain support for nuclear power within the Morrison federal government. Nonetheless, the federal Department of Industry, Science, Energy and Resources expects 69% renewable supply to the National Electricity Market by 2030. There is zero or near-zero support for nuclear power among state and territory governments, including conservative governments ‒ they are focused on the renewables transition (albeit unevenly). Tasmania leads the pack thanks to its hydro resources. South Australia is another pace-setter: wind and solar supplied 62% of local power generation over the past 12 months, wholesale electricity prices were the lowest on the mainland at an average of A$48 / MWh, and grid emissions have fallen to a record low. South Australia is on track to comfortably meet its target of 100% net renewables by 2030.