Nuclear energy has no future in Australia

Article published 4 February 2025

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Nuclear energy may once have been an option for Australia's electricity production, but that time has long since passed.

In 1969, Australia began laying the groundwork for a nuclear power station at Jervis Bay, around 150km East of Canberra. Just two years later, the plan was paused and then scrapped after a government report found that nuclear energy would be considerably more expensive than coal-fired power. So while some other countries went down the path of nuclear energy, Australia continued to build coal-fired power stations for the next 40 years, with the most recent plant having been opened in 2009.

Fast forward to 2025. Many of these coal-fired power stations have now closed, and the remaining ones are all scheduled to be gone by 2040 at the latest. Partly, these closures are due to the age of the power stations (the average lifetime for a coal plant is around 45 years), but mostly it is because these power stations can no longer make enough money.

Why are coal-fired power stations closing early?

Coal-fired power stations are slow and very expensive to start up and power down, so they can only really afford to operate if they are running constantly. Historically, this wasn’t a problem because Australia’s electricity needs were very predictable and fairly even throughout the day. This meant that coal stations could slowly increase or decrease their electricity generation in advance of high and low periods of demand.

In the past couple of decades though, several things changed.

First, many electricity intensive industries like car manufacturing began to shrink or disappear in Australia. Second, many households began installing rooftop solar panels that reduced the amount of electricity they needed to draw from the grid during the day. Third, large scale solar and wind plants were built that could provide cheaper electricity than coal.

These three factors changed Australia’s electricity usage, leading to less demand during the middle of the day and more in the evening.

The problem for coal-fired power stations is that the power that they generate must be used. If electricity is flowing into the grid but not flowing out again, it can damage infrastructure and create blackouts. And because coal plants are very expensive to shut down and start up, it is more affordable for them to pay to send electricity into the grid when demand is low than it is for them to stop production.

For many coal plants, especially older ones that face high maintenance and refurbishment costs, these numbers no longer stack up and they cease to be as profitable as they once were. This can lead their owners to decide to close them ahead of schedule.

Nuclear energy is unlikely to be affordable

Like coal-fired power stations, nuclear power stations are more expensive to shut down and restart than they are to run around the clock. And unless modified, they are at their most cost efficient when running near to their maximum capacity (on average, nuclear energy around the world runs at around 80% capacity).

This means that all the problems facing coal-fired power plants in Australia – low demand during the day and cheaper electricity from renewables – would also face nuclear power stations.

Because nuclear energy is very expensive to set up in the first place, these costs need to be recouped by guaranteeing a steady and predictable income over the long life of a nuclear reactor. The problem is, Australia’s electricity demand is very hard to predict, especially as more households continue to add rooftop solar and battery storage.

Australia currently has a higher proportion of households with rooftop solar than any other country and this is likely to increase over time, which will continue to reduce our demand for electricity during the day.

In order for nuclear energy to be a reliable and profitable investment, the Australian Government would likely have to discourage the uptake of new rooftop solar and batteries, something which they would probably be unwilling to do.

This means that private companies are unlikely to ever invest in nuclear energy in Australia when they could more affordably invest in renewables or battery storage.

For more information please email our media contact at media@cpsa.org.au

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