Nuclear Energy: An Economic Asset in Australia’s Energy Mix, Says Study

An independent economic analysis concludes that including nuclear energy in Australia's electricity market could yield substantial savings, with a cost reduction estimated at 44% compared to a scenario relying solely on renewable energy.

Share:

A recent report by Frontier Economics compares two energy scenarios for Australia. This analysis aims to determine whether the integration of nuclear energy into the National Electricity Market (NEM) offers a cost-effective and reliable alternative to a strategy based solely on renewable energy and storage.

Two Energy Scenarios for Australia

The report presents two distinct pathways:

– Progressive Scenario: This model includes nuclear energy, consistent with the policy proposed by the Liberal-National Coalition (LNP).
– Step Change Scenario: Supported by the current Labor government, it relies exclusively on renewable energy and storage.

The findings highlight that the Progressive Scenario would be 44% less expensive between 2025 and 2051. The higher costs of the Step Change Scenario are attributed to the substantial investments required in renewable capacity and storage infrastructure to address their intermittency.

Savings and Increased Reliability

According to Frontier Economics, integrating nuclear energy could generate approximately AUD 263 billion in savings over the study period while enhancing the reliability of the electricity grid. A variant of the Step Change model, which includes a limited share of nuclear energy, would also deliver significant financial benefits.

Frontier Economics’ Managing Director, Danny Price, stated: “Including nuclear energy in our energy mix is more cost-effective in the medium and long term, and it stabilizes electricity production.”

Strategy of the Liberal-National Coalition

The Coalition plans to build small modular reactors (SMRs) in South Australia and Western Australia, with additional facilities considered in Queensland, New South Wales, and Victoria. These projects, according to Shadow Minister Ted O’Brien, follow international guidelines from the International Atomic Energy Agency (IAEA) and established standards in several developed economies.

Peter Dutton, the LNP leader, declared that this approach would reduce costs for households while strengthening Australia’s industrial competitiveness. “This strategy aligns with international practices where nuclear energy plays a crucial role in combining economic growth and emissions reduction,” he said.

Criticism from the Government

Climate and Energy Minister Chris Bowen criticized the report’s conclusions, stating that Frontier Economics’ estimates are significantly biased. According to Bowen, the projections ignore the real costs and delays associated with building nuclear infrastructure while overestimating the benefits.

Meanwhile, the CSIRO and AEMO have published reports favoring renewable energy, asserting that it represents a faster and more affordable solution to meet Australia’s energy goals.

A Political and Economic Debate

Beyond the figures, this debate illustrates a stark political divide between the two energy strategies. The Coalition favors a mix that includes nuclear energy for economic and strategic reasons, while the government emphasizes the urgency of a rapid transition to renewables. The resulting decisions will have major implications for Australia’s electricity market.

SE Ignalina, the Lithuanian nuclear operator, has signed a memorandum of understanding with French firm Newcleo to explore the integration of small modular reactors (SMRs) using lead-cooled fast reactor (LFR) technology in Lithuania.
Egyptian President Abdel Fattah al-Sisi oversaw the signing of new agreements for the construction of the El Dabaa nuclear power plant, thus strengthening the strategic cooperation between Egypt and Russia.
Vistra Corp receives green light to extend Perry nuclear plant operations in Ohio by 20 years, securing regional electricity supply until 2046 and ensuring operational continuity for all its nuclear reactors in the United States.
EDF will hold a 12.5% stake in the Sizewell C nuclear project in the UK, a €1.3 billion investment announced during Emmanuel Macron’s official visit to London, confirming the strategic nuclear energy alignment between the two countries.
The French Cigéo project, designed to bury the most hazardous radioactive waste deep underground, obtains a crucial technical validation before its final authorization, expected by the end of 2027.
EDF confirms the continuation of its industrial project in Fessenheim for recycling very low-level radioactive metals, a first in France requiring specific regulatory authorizations, following a public debate concluded last February.
NANO Nuclear Energy Inc. formalizes its collaboration with UrAmerica Ltd. to strengthen Argentina’s uranium supply, aiming to secure future nuclear fuel supply chains for the U.S. market.
American companies SHINE Technologies and Standard Nuclear partner to recycle uranium and plutonium, supplying advanced fuel to the nuclear reactor sector and enhancing the national energy security of the United States.
The American Bureau of Shipping and two nuclear sector companies are studying the potential deployment of floating nuclear power plants to meet the energy needs of island and coastal regions in the Mediterranean, notably via electricity and desalination.
Lithuania establishes a working group tasked with assessing the feasibility of modular nuclear reactors to meet electricity demand estimated at 74 TWh by 2050.
Framatome has secured two significant contracts from Electrabel covering modernisation and technical support for the Tihange 3 and Doel 4 nuclear reactors, as part of their extension agreed upon between Engie and the Belgian government.
Cairo is stepping up connection works for the planned 4,800 MW El-Dabaa nuclear plant, developed with Rosatom, to feed the grid from 2026 with output equal to about seven % of national electricity.
EDF extends Flamanville EPR's shutdown to August 13 to conduct technical checks on three valves of the reactor's primary circuit, initially scheduled to resume production this week.
GE Vernova Hitachi Nuclear Energy and Fortum announce partnership aimed at preparing for the potential deployment of small modular reactors in Finland and Sweden, with commissioning scheduled for the 2030s.
Energy Fuels Inc. announced record production of 638,700 pounds of uranium during the second quarter of 2025 at its Pinyon Plain mine in Arizona, significantly surpassing initial site performance forecasts.
Argentina and Peru have signed an agreement expanding their scientific and technological cooperation in the civil nuclear field, including joint research projects and specialised training programmes for future development.
After several decades without funding nuclear projects, the World Bank has formed a strategic partnership with the IAEA to provide technical and financial support to countries integrating nuclear energy into their energy strategies.
South Korea's Nuclear Safety and Security Commission officially validates the decommissioning of reactor number one at the Kori plant, initiating an unprecedented project for the national industry scheduled to last until 2037.
Uranium producer enCore Energy surpasses three thousand pounds per day at its Alta Mesa ISR complex and sees three new Texas laws as a strong signal for faster nuclear production permits.
The International Atomic Energy Agency expresses concerns over Iran’s enriched uranium stockpiles following the abrupt suspension of inspections at key sites disrupted by recent attacks whose consequences remain uncertain.