The debate around whether nuclear power should be part of Australia’s future energy mix is again on the federal political agenda. This note looks at the arguments for and against the use of nuclear power in Australia and assesses whether nuclear power is a realistic solution to the requirements of Australia’s energy transition.

The Politics

The federal Coalition (the Liberal and National parties) has proposed that nuclear power, and specifically small modular reactors (SMRs), potentially hold the answer to Australia’s energy transition and that SMRs are needed for Australia to achieve net zero by 2050[1] (noting that the Coalition’s commitment to net zero at all remains tenuous[2]).

The Coalition has suggested that SMRs could be located on the sites of retired coal-fired generators to take advantage of the existing transmission system[3]. The Coalition claims that up to 50 countries are now exploring the use of nuclear power for the first time (and 33 other countries already use nuclear power).

It is important to note that this call to consider nuclear power is not formal Coalition policy and it is not entirely clear whether nuclear power is being proposed as an alternative to renewables to meet Australia’s immediate energy transition requirements (some of the debate suggests this) or is just being proposed as a technology that should be in the mix for 2050 – details of the Coalition’s policy regarding nuclear power will only be formalised in its future 2025 election policy. For the moment, the proposal is being described by the Coalition as a “conversation”.

Federal Climate Change and Energy Minister Chris Bowen has dismissed the proposal, calling nuclear “the most expensive source of energy in the world” and the proposal for nuclear power in Australia as just a distraction from the urgent need to transition the Australia’s energy sector to renewables[4]. He describes nuclear power an energy source which clearly “doesn’t stack up” for Australia and the proposal as demonstrating the Coalition’s continued philosophical resistance to renewable energy.[5]

As has been a hallmark of Australia’s consideration of nuclear power since the 1950s, this current debate is coloured with strong ideological convictions from both sides. Previous (mostly Coalition) governments have proposed nuclear power plants at various locations, including the Spencer Gulf, Jervis Bay and near Perth. These announcements have been punctuated by numerous State and federal reports, inquiries, and even a Royal Commission, into the use of nuclear power in Australia.

Australia’s abundance of cheap coal has meant that there has really been no need for nuclear power and little real appetite to introduce it into the Australian energy mix. However, Australia’s aging coal-fired generation fleet is rapidly retiring and requires replacement with an alternative generation source. This is occurring at the same time as Australia’s electricity consumption levels are forecast to increase due to electrification, population growth and, potentially, hydrogen production. Australia is grappling with how to replace coal-fired generation with a renewable generation mix, the transmission investment required to support that new generation and how to maintain a stable electricity system with an all-renewables generation mix. On top of this, cost of living pressures on Australians make any significant increases in the cost of delivered electricity a sensitive political issue.


Nuclear reactors rely on fissile materials as their fuel and uranium is the only naturally occurring fissile isotope.  Australia has the world’s largest reserves of uranium (approximately one third of the world’s known reserves) and is the fourth largest producer of unenriched uranium (behind Kazakhstan, Canada, and recently Namibia).

The specific isotope required for nuclear reactors is uranium-235, which makes up only 0.7% of mined uranium. However, mined uranium can be processed and enriched. Four operators are responsible for most of the global uranium enrichment with facilities in the US, the UK and mainland Europe. Smaller enrichment facilities are in Japan, Brazil, China, Iran and North Korea.

Enriched uranium is used in reactors for three to seven years, after which it requires storage, reprocessing or disposal.

Nuclear Power

Nuclear power relies on a chemical process called fission, which involves the splitting of an atom to release energy in the form of heat. This heat is used to create steam to drive a steam turbine and generate electricity. While this is not the only form of electricity generation from nuclear energy, it is the most common.

Nuclear power plants were first developed in the 1950s and proliferated both in number and capacity through the second half of the 20th century. The development of each successive ‘generation’ of nuclear power plant technology has been characterised an increase in capacity with the most recent conventional nuclear reactors (Generation III) typically having capacities of over 1,000 MW. There are currently 410 nuclear power reactors in operation globally and a further 57 under construction. There is no doubt that nuclear power is a proven technology and a key component of the energy mix in many global economies.

Australia has only one nuclear reactor, located at Lucas Heights in Sydney, which is used solely for medical and scientific purposes.

Small modular reactors

While nuclear power is a proven technology, specific SMR technology is nascent. SMRs use the same basic power conversion technology as conventional reactors but are scaled-down versions at around 300MW. In theory, SMRs can be produced using a standardised design in an offsite facility and transported to the relevant site for installation (ie. they are “modular”). Plants can connect multiple SMR units in series to achieve the desired total capacity.

However, there are only three operational SMRs globally, with a further three under construction. These operational SMRs are all located in Russia and China.

A further 38 to 70 SMRs are under development, depending on where one draws the line between ideation and committed development.

Canada, the UK and the US are all considering future SMRs. For example, Ontario has recently announced an agreement with GE Hitachi for the construction of four SMRs at the Darlington New Nuclear Project site, which would be the first grid-scale SMR project in North America. The project states the objective of having these SMRs come online between 2034 and 2036, subject to approvals.

Why are countries turning to SMRs?

Nuclear reactors rely on fission to generate the heat needed to generate steam and spin steam turbines. The greenhouse gas and other emissions from nuclear reactors are essentially zero. However, nuclear power, whist non-emitting and efficient, is not strictly “renewable”. Nuclear reactors still require an extracted and non-replenishable feedstock.

A related benefit is the energy density of uranium as a nuclear fuel. It has been suggested that a 20-gram pellet of uranium can provide the same amount of electricity as 400 kilograms of coal[6]. Reactors, and especially SMRs, provide a high density of energy relative to their footprint. SMRs are capable of 3000 GWh of generation per square kilometre compared with 872 GWh and 62 GWh for wind and solar respectively. SMRs have advantages in terms of reduced footprint impacts and are particularly appealing to countries with a lack of available space for solar and wind.

Proponents also suggest that nuclear reactors can provide flexible capacity to complement or “firm” variable renewable generation. Commercial experience in Germany and France indicates that nuclear reactors can fulfil this role but the flexible operation of SMRs is not yet proven. Traditional nuclear reactors are designed to run as baseload capacity (ie. at a flat generation profile) – they are not designed to perform a firming or peaking role.

A domestic nuclear industry potentially offers wider economic benefits. By onshoring segments of the nuclear supply chain, other countries have invested in the development of expertise and specialised manufacturing capacity. Enrichment facilities, manufacturing plants, and specialised disposal services all offer high-value-add industries as seen by the export of the Canadian CANDU reactor technology to six countries.

Proponents have also pointed to the potential application of SMR technology to hydrogen manufacture (referred to as “pink”, “purple” or “red” hydrogen, depending on whether they use an electrolysis or thermolysis process, or combination of both), although it is difficult to see how SMR technology can achieve the costs levels required for this hydrogen to be cost competitive to an export market.

Proponents suggest several factors make SMRs cost effective when compared with large reactors (although not necessarily cost effective when compared to other generation technologies). The modularity of SMRs allows EPC contractors to transfer learnings across projects more readily, resulting in cost savings, and pre-fabrication and standardisation of components allow for a faster and more reliable construction schedule. Although SMRs are not able to leverage economies of scale, they are able to employ economies of multiples by installing multiple SMRs in series at a generation point. This also allows additional SMRs to be installed in response to demand increases and grid instability, reducing the risk of unnecessary overinvestment and providing investment optionality.

Barriers to nuclear power in Australia

Nuclear power is banned in Australia. The Australian Radiation Protection and Nuclear Safety Act 1998 and the Environment Protection and Biodiversity Conservation Act 1999 both prohibit nuclear power. Similar prohibitions exist under the laws of every State and Territory. The first step to developing an Australian nuclear power industry would be the removal of these Federal and State bans. Queensland senator Matt Canavan recently brought a private member’s bill to remove this ban, but the bill was rejected by a Labor/Greens Senate committee (with a dissenting report from the committee’s Coalition senators).

In addition to the ban, there remain key barriers to developing nuclear power in Australia:

  • Cost;
  • The lack of any local nuclear industry or skill base;
  • Concerns for safety and social licence;
  • Management of disposal of nuclear waste including its long lifetime; and
  • Other regulatory barriers.


The current economic argument for nuclear power does not appear to stack up from a cost perspective against the cost of renewables and firming technologies.

Referencing the GenCost 2022-23 Report prepared by the CSIRO and AEMO[7], the Department of Climate Change, Energy, Environment and Water estimates that replacing Australia’s coal-fired power stations with SMRs will require more than 70 SMRs and cost taxpayers $387 billion[8]. Under this modelling, SMRs have an estimated capital cost of $18,167/kW (in 2030 dollars) compared to large scale solar at $1,058/kW and onshore wind at $1,989/kW.

We have seen constraints on global supply chains for energy infrastructure significantly increase the costs of energy infrastructure major projects and extend development timeframes, and Australia having limited purchasing power in a global energy infrastructure market. These are factors that may further adversely impact both cost and timeframe of SMR development in Australia.

Cost certainty will be an issue with any nuclear power development. Cost blowouts have historically been a feature of major nuclear power projects. Construction of Generation III gigawatt-scale reactors, such as the Hinkley Point C reactor (3.2 GW) in the UK, have been significantly delayed and over budget. Proponents of SMRs suggest that standardised componentry, smaller scale, and flexible construction options allow SMRs to reduce the cost of upfront capital and provide greater cost certainty. Smaller capacity also allows more flexibility in demand planning and less risk than committing to gigawatts of generation. Sceptics argue that these are little more than theories with no current development experience or costings of SMRs to date. Further, these benefits are all relative to larger nuclear reactors in established nuclear industries and are unlikely to map neatly onto a nascent nuclear industry in Australia.

Any development of a meaningful nuclear power sector in Australia will need considerable government financial support to be viable (eg. underwriting and offtake arrangements, grant funding and concessional finance). Even SMR projects in established nuclear power jurisdictions like Canada require significant government support to be viable.

Lack of any local nuclear industry or skill base

Federal Climate Change and Energy Minister Chris Bowen has noted that Australia has never had a nuclear power industry and to develop one now would be like starting from “worse than scratch”[9]. In addition to importing SMR technology, Australia would be entirely reliant on offshore construction and operation experience until local capability was developed.

Former Chief Scientist Alan Finkel says, it was highly unlikely that Australia could open a nuclear power plant before the early 2040s[10]. In his view, discussions regarding nuclear power must not involve a loss of focus on developing renewables to replace coal-fired generation[11].

Concerns for safety and social licence

Australia has a long history of anti-nuclear sentiment. British nuclear weapons testing in remote South Australia in the 1950s led to a fierce public backlash. Since then, anti-nuclear organisations and movements in Australia have responded to proposed projects, expansions in uranium mining and establishment of waste sites. These movements have a strong aversion to the proliferation of nuclear weapon capabilities globally as well as a concern regarding the environmental and health impacts of radioactive waste.

Politically, federal Labor has maintained an anti-nuclear stance since the 1970s. On the international stage, Australia was one of the first signatories of the Partial Test Ban Treaty in 1963 and has since continued to be a proponent of the Treaty on the Non-Proliferation of Nuclear Weapons.

A key actor in this opposition has been the union movement. In response to French weapons testing in the Pacific in the 1980s the Seamen’s Union boycotted foreign nuclear warships. This anti-nuclear stance continues to this day. The Australian Council of Trade Unions has voiced opposition to the AUKUS submarine deal and the Electrical Trades Union, Construction, Forestry, Maritime, Mining and Energy Union and Maritime Union of Australia were reportedly pushing to remove references to the deal from the Labor party platform at the recent conference in Brisbane[12].

From a social licence perspective, this opposition to the local development of a nuclear energy supply chain may make siting a nuclear power generation or uranium enrichment, storage or waste facility difficult. The spectre of a nuclear disaster materially exceeds the actual level of risk but is difficult to overcome. Australians have grown up learning about the disasters/near disasters at facilities such as Three Mile Island, Chernobyl and Fukushima and on a diet of post-apocalypse cinema and literature.

Social licence is likely to be the biggest hurdle of all for nuclear power in Australia. SMRs are most efficiently and logically located at strong points in the grid, such as the sites of decommissioned coal-fired power plants. There are significant questions about whether the communities of the Hunter Valley, Central Coast, Swanbank and La Trobe Valley would accept a new nuclear power station adjacent to their communities.

Management of nuclear waste

The treatment of nuclear waste is also problematic, as the credibility of a SMR proposal would rely on the identification and approval of a site for the storage, treatment and disposal of its nuclear waste. Obtaining environmental approval for such a facility at scale would be required to support approval of the SMRs themselves.

Identification of sites for consolidated disposal of Australia’s radioactive waste (eg. from medical and other uses) has been difficult in the past, including in light of environmental and cultural heritage concerns.[13] Attempts by the previous federal Coalition government to declare an area near Kimba in South Australia as a radioactive waste disposal site were challenged in the Federal Court, and ultimately declared invalid on the basis of procedural defects in decision making (apprehended bias) (Barngarla Determination Aboriginal Corporation RNTBC v Minister for Resources [2023] FCA 809). While strictly a case about administrative decision-making processes, this decision also reflects the level of community opposition to these sites ‘in their backyard’.

Other regulatory barriers

Given the current ban on nuclear power, there is no regulatory framework for a nuclear power industry in Australia. The task of incorporating the necessary licencing, zoning, health and safety, planning, environmental, waste, transport and other controls required for a nuclear power sector will require significant consultation, time and expense.


There is no escaping that nuclear power is an attractive energy solution from a footprint, efficiency and emissions perspective. However, consideration must be given to how and when this technology could ever be deployed in Australia given its cost, development timetable and issues with social licence.

Our conclusions are:

  1. SMR technology is largely developmental and commercially unproven.
  2. Construction times for the few SMRs that are currently operating (a mixture of commercial and pilot projects) are approximately ten years from breaking dirt. Considerable time prior to this is required for grid planning, tendering, approvals and licencing.
  3. The costs of nuclear power, even SMRs, are currently prohibitive and significantly more than alternative technologies. Even in the future, SMRs are unlikely to be cost competitive against traditional renewables and firming technologies.
  4. The timeframe for developing nuclear power needs to take into account the need to repeal the existing federal and State bans on nuclear power, and to develop an appropriate regulatory regime for all aspects of a nuclear power industry including waste disposal.
  5. Considerable social licence hurdles will first need to be overcome to have the Australian public accept the development of a nuclear power industry in Australia.
  6. Australia has no domestic nuclear power experience. However, an increasing affinity with nuclear energy in the defence industry may prompt a complementary development of nuclear literacy for broader power generation.
  7. SMR technology is not a solution to Australia’s immediate energy transition needs (ie. to replace retiring coal-fired plant). However, it may have a role in Australia’s longer term energy needs (eg. achieving net zero by 2050) if it is possible to address the issues above.
  8. Better (and cheaper) options for firming renewables in the short to medium term are likely to come from gas-fired peaking generation, batteries and pumped hydro.


For more information, contact:

David Ryan
David Ryan
Partner, Sydney
+61 2 9225 5349
Heidi Asten
Heidi Asten
Partner, Melbourne
+61 3 9288 1710
Nick Baker
Nick Baker
Partner, Global Co-Head of Energy, Melbourne
+61 3 9288 1297
Peter Davis
Peter Davis
Partner, Sydney
+61 2 9225 5354
Melanie Debenham
Melanie Debenham
Partner, Perth
+61 8 9211 7560
Kathryn Pacey
Kathryn Pacey
Partner, Brisbane
+61 7 3258 6788