Some members of the Coalition government want to trigger a national discussion about nuclear energy and whether it could be used as a low-carbon emissions back-up as wind and solar sources of electricity expand from their current 5 per cent of generation towards 50 per cent.

Energy Minister Angus Taylor said dropping the ban would probably require bipartisan agreement, which doesn't appear likely in the near term, and other ways to reduce emissions of greenhouse gases from electricity generation needed to be investigated too.

"Any change [to the nuclear ban] being made by a future government will need to have strong community support," he said. "It is crucial that we begin a sensible, fact-based debate on technologies that may play a role in our energy system in the longer term, including hydrogen, carbon sequestration, biofuels and lithium batteries, as well as nuclear."

Energy and Emissions Reduction Minister Angus Taylor initiated an inquiry into nuclear energy. Alex Ellinghausen

The need for reliable backup power was demonstrated in Britain two weeks ago when more than one million homes and businesses, including a hospital and hundreds of trains, were left without power when a North Sea wind farm and a gas plant in Cambridge stopped supplying the grid almost simultaneously.

A lightning strike was blamed for the outages, although experts said it was unclear how a common weather phenomenon cut off supplies to 5 per cent of electricity demand in the world's seventh-largest economy.

In the last few days Britain's energy regulator has launched an investigation into whether the electricity grid has sufficient back-up power to step in if similar outages happen again. The outage dampened some of the celebration from May when Britain recorded its first coal-free week of electricity since the Victorian era.

Last week the Australian energy market regulator warned that Victoria faces outages over summer as ageing coal plants reduce output and undergo repairs. The market operator had already called for more back-up to head off blackouts.


Part of a balanced mix

With the outlook for electricity generation unstable for the foreseeable future, the global nuclear industry is pitching itself as a long-term solution to fill in gaps in the grid left by the forthcoming retirement of Australian coal power stations.

"We have nothing against renewables," Mr Orr said. "We see ourselves as part of a balanced energy mix, which is absolutely necessary in terms of security of supply."

The Rolls-Royce plant, which the company says should become commercially available around 2030, would be transported to Australia in shipping containers and supply 750,000 homes from an area little bigger than a cricket ground.

Once production began, the plants could be constructed and installed in as little as four years, Mr Orr said, which is much quicker than the decade that conventional nuclear plants can take to be built.

Canadian and US companies are working on competing models designed to be commercially competitive with gas power plants, which are large emitters of carbon dioxide, and cost a fraction of the price of conventional nuclear plants under construction today.

A compact nuclear plant designed by Terrestrial Energy should be in operation by 2029, chief executive Simon Irish said, and would be ideal for Australia, where the long distances between cities increased transmission costs.

"You can't have the sticker shock you get with conventional nuclear," he said in an interview from Ontario. "It can't be $US10 billion [$14 billion] or $US20 billion. They have to be capable of being funded under $US1 billion. That is a price point where private capital can be substantially involved, if not exclusively involved."


The plant will be designed to produce electricity at 5¢ US per kilowatt hour, which is similar to gas prices, according to Terrestrial. The Rolls-Royce plant would initially cost £1.8 billion but could fall to £1.5 billion once production ramps up, according to the company, which now manufacturers jet and diesel engines instead of cars.

New generation of plants

A coal sceptic and energy analyst, Tim Buckley, has estimated a major new coal power station would cost $3 billion and take eight years to build.

Regulators in North America and Europe, where the plants are likely to be installed on the site of decommissioned nuclear reactors, are working with the industry to develop policies and rules to allow construction of the new generation of nuclear plants to begin.

Nuclear power advocates say they will be safer than any previous nuclear reactors and will reduce deaths by cutting demand for fossil fuels.

"This is not new technology," Mr Irish said. "It has been researched and developed for the best part of 50 years. We're doing that last step – the engineering step of packing it in an innovative proprietary design.

"The application in Australia would be for our power plant to supply clean, reliable nuclear energy at multiple points on the Australian grid."

ARC Nuclear Canada is developing a small power station that would cost $C450 million ($500 million) and be located next to wind and solar farms, which it would back up when they weren't generating electricity.

"Like most of the world, in Australia the government and its residents are determining how they want to address CO2 emissions," said president Norman Sawyer in an interview from St John, New Brunswick.

"Our technology is purely to address the emissions that are going on around the world. Our technology can follow wind and solar and gives the supporting infrastructure to make that whole system work."