

The only reference to the $16,000/kW occurs in the final table “New entrant capital cost - Nuclear”. There is no reference for this figure, and it is the first time it is published. Readers should note the World Nuclear Association cost percentages are for a gigawatt scale LWR, not a 300MWe Gen IV SMR.

The stand out error is that a SMR has a “cost of land and development” of nearly a billion AUD. SMRs are small and modular, they do not require a billions worth of land development.

In 2019 the House of Representatives Standing Committee on the Environment and Energy undertook an inquiry into the prerequisites for nuclear energy in Australia[5].

The Committee specifically inquire into and report on the circumstances and prerequisites necessary for any future government’s consideration of nuclear energy generation including small modular reactor technologies in Australia, including:

As the economics of nuclear was under scrutiny the GenCost data from 2018 was to be examined. It was presented as evidence by numerous submitters to the inquiry, and on 16th October 2019 the CSIRO was brought before the committee to present evidence and answer committee members questions. This is what happened when the GHD figure was scrutinised (committee members are in CAPITALS, CSIRO in lower case):

CHAIR: Why don't I start. Much evidence has been given to this inquiry which has been anchored by or has relied on that 2018 GenCost report and the cost assumption of $16,000 a kilowatt for nuclear for small modular reactors. I understand that a new report is currently being done.

Dr Hayward : That's right, yes.

CHAIR: Where does CSIRO sit now on that assumption? Is it likely to change, and, if so, to what number?

Dr Hayward : We are sticking with the original, initial cost estimate from GHD, but, based on stakeholder feedback, we're revising the scenarios that actually go into the modelling and the modelling assumptions, and we're also modifying our methodologies. What we're expecting to see is a bit more variety in terms of the outcomes for SMR. So, instead of having a flat cost trajectory going out to 2050, we think that, given the changes that we're making because of the stakeholder feedback when we've had our meetings, that will actually see some cost reductions. But, yes, we are sticking with that number, because it is a first-of-a-kind plant. That's the assumption that we're sticking with.

CHAIR: And where did GHD source that information?

Dr Hayward : They're saying that it's from the World Nuclear Association website. We've done a bit of an investigation into that and, if you go through some of the pages in there, there are a wide range of values; $16,000 is just one number. I couldn't find $16,000 stated specifically, but it's within the range of numbers that they give on that website and other websites and in other documents.

CHAIR: So the source of the number did not state $16,000?

Dr Hayward : Well, the source was in Canadian dollars, but it's a bit unclear at this stage because we didn't actually come up with the number.

CHAIR: There will be different scenarios. So $16,000 will be only one of several scenarios provided in the next report; is that right?

Dr Hayward : Yes. We're going to look at several scenarios, so we're revising all the different assumptions.

CHAIR: In looking at the GenCost analysis, obviously, when we're looking at the topic of this inquiry, there is a need to compare it across other sources of energy. I see that even the life span for a black coal plant is listed as 25 years, with large-scale solar and solar thermal also 25 years. That's from the same page that lists the assumption of $16,000.

Dr Hayward : I'll have to look into that for the black coal plant, because normally they are 50 years, I think. I'll have a look at that. Certainly in the modelling we assume it's 50 years.

CHAIR: Okay. This is on page 54. I'm happy to provide it, but it's on the same page as the $16,000 one. We've had very different views put on it, and to date nobody has actually been able to put their finger on the $16,000 figure. But, okay, thanks for your response on that.

Mr ZIMMERMAN: Can you unpack that a little bit more? It sounds remarkably vague, in the sense that GHD has relied on a website, and, when you've sought to fact check that website, you can't find the $16,000 yourself, but then you talk about a range. It doesn't sound like a massively thorough process, if I can put it that way. I'm interested in your response to that. It sounds highly vague. Basically, you're relying on a third party, who's relying on a website, and you haven't been able to fact check that information yourself. It doesn't seem to provide the certainty—I know it's speculative, but you'd certainly be relying on it if you're making decisions about a significant investment in a new form of energy.

Dr Hayward : It is a tough one because it is so speculative. We have these stakeholder workshops where be put the numbers to them. We actually invite about 100 stakeholders, and we get about 20 to 30 to 40 coming along. We've interrogated those numbers with the stakeholders, and they seem to think that it's a perfectly reasonable number given the range of uncertainties out there.

Ms STEGGALL: Who are the stakeholders?

Dr Hayward : We could probably provide you with the list, I think.

Mr ZIMMERMAN: That would be helpful.

Mr JOSH WILSON: Can we have a broad indication? Do these people have expertise in small modular reactors?

Dr Hayward : It's a diverse range of people across the energy space. I believe some experts in nuclear were invited. I'm not 100 per cent sure—I don't think they came along to the workshops.

CHAIR: So they didn't include experts in nuclear?

Dr Hayward : They were invited.

CHAIR: But they didn't attend?

Dr Hayward : No.

CHAIR: So you're relying on validation from stakeholders who do not have expertise in nuclear energy?

Dr Hayward : They're experts across the energy sector. I'm not 100 per cent sure of all their expertise.

CHAIR: Sticking on this topic, are there any follow-ups?

Mr BURNS: To follow up on Mr Zimmerman's question, is that an accurate statement? CSIRO has relied on GHD, who's got a number from a website. Is that correct?

Dr Hayward : It's the World Nuclear Association—

Mr BURNS: I'm aware of the association.

Dr Hayward : so it's a reputable source.

Mr BURNS: But in terms of a thorough analysis and reliability—we are looking to make recommendations, decisions based on some of this information. It just doesn't sound terribly thorough.

Jane Coram : If I may, the difficulty in any modelling is that usually you're trying to predict something that you don't understand particularly well, so we're frequently forced into using ranges and picking a number within a range. At CSIRO we do source our figures in as much detail as we possibly can, but frequently when we're exploring new scenarios we don't necessarily have a definitive source of information. We can certainly provide the justification for the figures that have been used. But they have not been plucked out of the air. They've been justified as comprehensively as we can.

Mr HOGAN: Just to come back to that statement, why wouldn't CSIRO utilise someone who did know what they were doing?

CHAIR: Is that a question or a statement?

Mr HOGAN: It's a question.

Jane Coram : Could we possibly get back to you with the basis for the figures—the comprehensive basis—because it has been done as comprehensively as we can within the time frames. There is limited information to draw upon.