• Webinars

The State and Outlook of Nuclear Generation

Watch Webinar
DOWNLOAD PRESENTATION
Explore the future of U.S. nuclear energy and how shifting policies, next-generation technologies like SMRs and microreactors, and global competitiveness are shaping the nuclear landscape. Discover cost outlooks, integration challenges in high-renewable grids, and why data centers could be nuclear’s next big customer.

UPDATE: 2025-11-19

The Paris Agreement targets limit global warming below 2°C, with an additional goal to keep global temperatures below 1.5°C, from pre-industrial levels. Signatories are required to review their targets periodically and to commit to more stringent ones where it is cost effective to do so.

Current Australian targets include a 43% reduction in 2005-level (baseline) emissions by 2030 and a net-zero goal for 2050. The Department of Climate Change, Energy, the Environment and Water (DCCEEW) has modelled Australian emissions projections as achieving both their GHG emissions reduction target and emissions budget target by 2030, shown in Figure 1.

Figure 1 – Australian Historic and Target CO2e Emissions, Source: DCCEEW (2021), Climate Targets Panel (2021), Climate Change Authority (2014), Energeia, Note: 2020 datapoint is historical (excluding the Kyoto Protocol and Climate Council Authority targets)

Historically, Australia has not taken up nuclear energy, despite having advantages that support it, such as the world’s largest supply of uranium. Australia does have some with nuclear, through the 20MWt Open Pool Australian Lightwater (OPAL) research reactor, owned and operated by the Australian Nuclear Science & Technology Organisation (ANSTO).

Consistent with official Australian Government policy, the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) prohibits developing a nuclear energy industry in Australia. In recent years, the push to develop a nuclear energy industry in Australia appears to be gathering strength as a result of wider environmental and industry concerns, including:

  • Climate change
  • Rising energy costs
  • Ageing of the coal-fired power plant fleet
  • Baseload power for an increasingly renewable energy grid

Though the push for nuclear development in Australia has been met with strong resistance, the conversation is very much alive and a focus of political positioning.

Nuclear Policy

Given the significant cost of developing and maintaining a nuclear capability, with potential military linkages, pursuing nuclear generation is very much a national policy position. Though Australia is not expected to pursue nuclear power in the near future, other nations have traditionally supported it, but its role in the energy transition is unclear, with solar PV, wind and battery storage being the focus to date. If nuclear generation can deliver a lower cost transition, it could put Australia at a disadvantage if not part of the future Australian energy system mix.

Table 1 summarises current nuclear energy targets of key jurisdictions globally.  It shows that most countries with existing nuclear generation are expecting to increase their overall share of nuclear energy over time. A notable exception to this is Japan, which is expected to reduce its overall dependence on nuclear power going into the future. Canada notably has no explicit targets despite being a current world leader. However, they are currently investing in nuclear on an ongoing basis. France has reversed their 2014 policy to lower nuclear penetration from 70% to 50% and, since 2022, plans to install 6 new reactors.

Table 1 - Summary of Worldwide Nuclear Targets, Source: nergeia Research, Note: BRI = Belt and Road Initiative

Table 2 summarises the incentives being used in each jurisdiction to encourage investment in nuclear energy. The research shows that jurisdictions are funding their nuclear energy programs through a mix of federal subsidies, tax incentives and loans. Both the UK’s and France’s policies offer developers a contract-for-difference (CfD) style arrangement, thereby locking in a bankable sale price for all energy generated by the power station once it is constructed.

Table 2 – Summary of Worldwide Nuclear Incentives, Source: Energeia Research. Note: RAB = Regulated Asset Base

The impacts of these varied targets and incentive approaches to nuclear will heavily depend on the progression of nuclear technologies in future. The key question is whether nuclear technology is able to compete with and/or complement solar PV and wind based zero carbon energy systems.

Nuclear Technologies

The following section summarises key nuclear energy technologies, current historic rates of development, and future technologies.

Key Definitions for Nuclear Technologies

The most common and/or prospective nuclear energy technologies are summarised in Table 3 below. The Small Module Reactor row is highlighted as is the focus of most next generation technology solutions and appears to hold an edge over conventional reactor designs for reasons spelled out below.

Figure 2 – Pressurised Water Reactor, Source: United States Nuclear Regulatory Commission

Of the types listed in the table above, the most common nuclear reactor technology that is used today is the Light Water Reactor (LWR). The two most common types of LWRs are the Pressurised Water Reactor (PWR) and the Boiling Water Reactor (BWR), which have a global market share of 71% and 14% respectively. Their operation mechanism is similar, except that a PWR transfers heat through two fluid circuits, compared to a BWR, which only uses a single fluid circuit.

Figure 2 shows a diagram of the operation of a PWR.

Table 3 – Nuclear Reactor Technologies, Source: Energeia Research

The above nuclear technologies can generally be grouped into the following three key categories:

  • Light water reactors – PWRs and BWRs. Both are the most widely implemented technologies to date
  • Small modular reactors – This approach can be applied to most of the other reactor technologies
  • Generation IV nuclear reactors – These aim to be the next step in reactor designs, targeting improvements to sustainability, economics, safety and reliability, and proliferation resistance.

Generation IV reactors are still novel, with very limited grid deployment to-date. However, with nuclear becoming increasingly relevant for major flat loads including data centres and industrial electrification applications, combined with the planned construction of Gen IV nuclear reactors, they’re expected to capture a greater worldwide generation market share moving forward.

Conventional vs Small Modular Reactors

An SMR is an umbrella term for reactors with the following features, as determined by the International Atomic Energy Agency (IAEA) and World Nuclear Association (WNA):

  • Reactors and other major components are designed to be standardised
  • Smaller physical footprint
  • Designed with inherent passive cooling, in the case of a power failure
  • Minimum capacity 30-300 MWe, which can be daisy-chained.

Table 4 compares conventional nuclear reactors to a PWR small modular reactor.

Estimates for the SMR are based on NuScale, which is not yet fully commercialised, but is the only SMR to be certified by the US Nuclear Regulatory Commission to date. Cost estimates are expected to be higher than the above figures in the Australian context, however the Commonwealth Scientific and Industrial Research Organisation (CSIRO) notes that, as Australia has no existing nuclear energy industry, a first-of-a-kind multiplier of 2 could apply to capital costs in Australia, as the technical capability and skilled workforce do not currently exist. This would fall over time with industry learning.

Table 4 – Conventional vs Small Modular Reactors (PWR Case Study), Source: Energeia Research. 1based on current NuScale SMR estimates. For the cost assumptions, this includes no subsidy, does not reflect CSIRO’s 2 times multiplier and is converted to AUD

Small modular reactors have recently begun operation in China and Russia, and more are under construction. Table 5 summarises the SMRs that have been constructed to date. The table shows that to date, only two SMRs have seen grid-connection deployment worldwide, with a total of 280 MWe capacity across the two reactors. These have been installed in Russia and China.

Table 5 – Grid-Connected Small Reactors Operating, Source: World Nuclear Association, Energeia Research

The six identified SMRs under construction are summarised in Table 6 and are projected to add 1,127 MW of capacity. Current estimates show that SMR pilots are expected to deliver the following cost and build time ranges:

  • ~3-5 year deployment times, with median install time on the higher end of this range
  • ~$5-10m ($/MW) unit rates, with the Canadian reactor an outlier to this range

The actual delivery times and costs for the planned projects won’t be known until the projects are completed.

Listen or click through at your own pace

WATCH WEBINAR
DOWNLOAD PRESENTATION
Table 6 – Small Modular Reactors Under Construction, Source: World Nuclear Association, Energeia Research

The summary of installed and currently under construction SMRs shows that SMR deployments are not limited to conventional PWR designs. There are reactors currently operating, as well as those under construction, that use advanced reactor technologies such as:

  • High Temperature Reactors,
  • Fast Breeder Reactors, and
  • Molten Salt Reactors.

The use of these ranging technologies results in different operation and build characteristics, as summarised in the following section.

Summary and Benchmarking of Technologies

Key issues with nuclear technology in the past have included cost overruns, minimum sizing, flexibility, leaks, and waste disposal, all of which need to be considered when comparing different technology options.

The following section summarises the results of our research into cost, lead time, sizing, and technical capabilities of different nuclear energy technologies. These metrics impact their competitiveness in future energy systems, especially those with variable loads and/or variable resources.

Table 7 captures this information, where the data is known in the public domain. The table shows that there are still a large number of data gaps in the public domain regarding key characteristics of reactors, including how they perform when grid-connected. Key operational characteristics include:

  • Ramp rate – The rate at which a nuclear power station can change its output, measured in MW/minute or % of rated capacity/minute. This indicates how well it can follow load and/or other co-installed generation technologies, such as variable renewables
  • Maintenance time – the downtime per year required for refuelling and other maintenance activities, including forced outages, which reduce its availability to generate
  • Minimum load – the minimum level at which a reactor can be safely and stably operated, measured in MW or % of rated capacity, which can lead to negative bidding behaviour to remain online rather than turning off, and incurring restart costs
  • Restart Costs – the cost of turning a reactor off and on again, comparable to a cold, warm, or hot start for a coal power station, when components need to heat up, i.e., boilers. Higher costs will lead to larger negative prices to avoid shutting down.

All of the above technical constraints are key to consider when integrating into a grid that has an existing generation mix, and known demand characteristics, including ramping requirements due to rapid changes in solar PV or wind generation.

Table 7 – Comparison of Key Nuclear Reactor Technologies, Source: Energeia Research

A new generation of technology is promising to address these concerns. The question is, will they be cost-competitive?

Cost Competitiveness

The following section shows Energeia’s analysis of the cost competitiveness of nuclear energy in the current grid with a Queensland FY25 grid price analysis, and in the future with a projected FY45 cost analysis.

Queensland FY25 Case Study

Energeia has analysed the Queensland (QLD) electricity market for insight into potential strengths and weaknesses of nuclear technology. Figure 3 shows QLD’s current average daily load profile. The consumer load profile exhibits a distinctive “duck curve” shape from rooftop solar generation during the day and an evening peak immediately following the solar period. Seasonality also influences the average day profile, with lower minimum demand occurring in winter.

Figure 3 - QLD Average All, Summer and Winter Days (FY25), Source: AEMO ISP (2024)

Figure 4 shows the price duration curve in QLD in FY25. This shows that at FY25 prices, a baseload operating nuclear plant would have receive $109/MWh on average for each MWh sent out, assuming the reactor operates for ~100% of the hours in a year at a fixed output. This includes operating at negative prices, which were observed to occur for ~15% of the time. This is much lower than the CSIRO estimate of the cost to produce a MWh of nuclear energy, with the best price of $141/MWh.

Figure 4 – Number of VET Providers by Type, Source: National Centre for Vocational Education Research (2023), Note: Dispatch % at $109/MWh Avg.

The plant could avoid negative prices, but that would incur additional restart costs and increase the investment as well as fixed operating and maintenance costs per MWh delivered. These negative prices typically occur periodically, correlating with daily solar generation, meaning that a run strategy including avoiding negative prices could require up to daily or intra-daily plant restarts.

Queensland FY45 Case Study

In FY45, QLD load is expected to evolve due to increased electrification and adoption of behind-the-meter resources. Figure 5 shows AEMO’s forecasted QLD load for FY45, showing an exacerbated “duck curve” effect with a more significant midday trough from solar, relative to the morning and evening peaks. Overall load significantly increases from FY25, but the impacts of seasonality are the same.

Figure 5 – QLD Average All, Summer and Winter Days (FY45), Source: AEMO ISP (2024)

Energeia developed a simplified QLD wholesale cost-of-service model to investigate least-cost solutions (from an annual capex and opex perspective) to meet FY45 operational demand with varying constraints on fuel type inclusions. This analysis was developed using the following simplifications and assumptions:

  • Analysis uses FY45 resource capex and opex costs from the 2024 ISP, identifying the least-cost combination that serves 100% of load
  • Assumes ramping and excess nuclear generation able to be smoothed out by reported ramping rates and 5 hour battery, per latest US approach
  • The analysis does not account for existing capacity (consistent with a long-run-marginal-cost analysis), forced or planned outages, or inter-state trade
  • The analysis relies on FY45 QLD renewable energy traces from the 2024 ISP

Figure 6 and Figure 7 show the key outcomes of this analysis, being the modelled least cost capacity mixes for each of the two 100% (24/7) renewable energy scenarios, one that allows for SMR nuclear technology, and one that does not. The ISP Step Change scenario results are also included for comparison, which includes gas fired technology and is only net zero, and not 24/7 zero carbon.

UPDATE: 2025-11-19 — Based our findings, which are contrary to those of the 2024 ISP, Energeia reviewed its key inputs and assumptions, and linear-solver based results post the webinar to confirm the FY45 results. As a result of additional linear solver runs, the optimised system mix and average pricing have changed, but the overall result has not; that under the simplifying assumptions made, and the 2024 ISP cost and load forecasts assumed, our modelling shows that nuclear may result in a lower average system cost.

Figure 6 – QLD Cost in FY45, With and Without Nuclear, Source: Energeia Analysis using AEMO ISP Data (2024), Note: RE = Renewable Energy

Under the highly simplified modelling and ISP assumptions used, the nuclear scenario comes in significantly cheaper than the non-nuclear scenario. However, the net zero ISP scenario is cheaper still. The key driver of this outcome is wind droughts; for ~2% of the year (~176 hours), the average capacity factors for wind across QLD drop to less than 5%. This forces additional renewables and battery firming to be built to overcome these wind droughts and ensure all load is met.

Figure 7 – QLD Capacity in FY45, With and Without Nuclear, Source: Energeia Analysis using AEMO ISP Data (2024), Note: OS = Off-Shore

Given the significant assumptions and simplifications made for this modelling, the considerable complexity of the real-world NEM, and the immaturity of SMR nuclear technologies and their associated costs, it is uncertain whether these outcomes would hold true. Additional analysis of regional power dynamics, nuclear ramping capabilities and costs, load flexibility, renewable energy diversity, and allowed unserved energy are needed to increase certainty of findings.

Data Centre FY25 Case Study

Data centres typically run a flat load because much of their power consumption comes from non-time-dependent processing, which is overlaid on synchronous business use. Figure 8 compares the average price observed by NEM state for a flat load in FY25. This analysis varies from the foregoing analysis in that it is focused on today’s costs, to inform discussion as to whether a data centre is better off connecting to the grid where it can, or connecting to a microgrid with or without it where it cannot.

The figure below shows that a data centre in most states in FY25 would have seen an average wholesale Regional Reference Price (RRP) of ~$107/MWh, which is still below the $141/MWh best-case CSIRO nuclear cost figure. This suggests that a data centre would pay less at the average grid price than the best-priced nuclear station in FY25. Note that this assumes that the additional data centre load does not itself increase wholesale market prices, which is increasingly a dubious assumption to make.

Figure 8 - Data Centre ($/MWh) by NEM State in FY25, Source: Energeia Analysis using AEMO ISP Data (2024)

Where a data centre is not able to connect to the NEM, or where it may be lower cost not to, the alternative cost of a microgrid system is relevant. Figure 9 shows the costs of different standalone generation solutions to meet data centre demand in FY25, again using the 2024 ISP inputs. Results show gas solutions to be least-cost at current costs, and renewables with battery as the least-cost zero emissions option, followed by nuclear as the most expensive.

Figure 9 – Data Centre Cost of Service by Solution (FY25, $/MWh), Source: Energeia Analysis using AEMO ISP Data (2024)

A key driver of the above results compared to the outcome in FY45 in Queensland is the cost of nuclear fuel, which falls 50% over the period to FY45 in the 2024 ISP.

Takeaways and Recommendations

Energeia’s key takeaways and recommendations for tackling the skills gap in the workforce implementing decarbonisation are summarised below.

Key Takeaways:

  • Australian law prohibits nuclear installations for power generation
  • The transition to zero emissions power systems, combined with the rapid growth in major flat loads like data centres, are driving renewed interest in nuclear technologies
  • Most countries with nuclear capabilities are aiming to invest in next generation technology, or at least keep their options open
  • Small modular reactors promise smaller form factors, faster construction times, without too much of a cost impact from the smaller scale
  • There are very few small modular reactor designs in the world that have been certified
  • Key limitations of the technology still include nuclear waste management, water consumption, ramping rates, and restart costs
  • A few pilot projects are currently underway, with significant results expected in the next 3 years or so
  • The high utilisation / baseload nature of the technology may find it hard to integrate into a high renewables and/or highly variable net load system without adding in battery storage
  • Data centres, with their flat loads, could be a key future customer, especially where there are connection limitations, but access to water will be key
  • Our analysis shows that even assuming a flat load profile, a modular reactor would not be competitive with a solar + wind + BESS solution in FY25, economically speaking
  • It also shows that for QLD’s FY45 profile, under simplified assumptions, that nuclear may be able to deliver a lower cost, zero emissions outcome than without it

Key Recommendations:

  • Monitor the outcomes of small modular reactor pilots around the world to see if they deliver on timelines and cost targets
  • For data centres, and other major industrial loads, prioritize consideration of load flexibility to maximise grid connection capacity and minimise standalone costs
  • Focus analysis on the limits and costs of nuclear outage rates and flexibility, including how excess generation may be best utilised
  • It will also be important to monitor the cost of alternative technologies, esp. long-duration storage
WATCH WEBINAR
DOWNLOAD PRESENTATION

For more detailed information regarding the key challenges of analysing and optimising electrification, best practice methods, and insight into their implementation and implications, please see Energeia’s webinar and associated materials.

For more information or to discuss your specific needs, please request a meeting with our team.

You may also like

Scroll to Top