What one less nuclear power station could mean for NSW strata

The Australian Liberal-National Coalition's renewed push for nuclear energy taps into a recurring narrative within the national energy debate—one that promises a future of dispatchable, reliable, and cheap electricity. While nuclear power would indeed deliver on dispatchability and reliability, the claim of it being cheap doesn't hold up under scrutiny, especially within the Australian context. Read on for how the funds from just one of seven proposed nuclear power stations could alternatively be deployed into NSW strata buildings....

​The Coalition's proposal outlines a plan to replace the capacity of seven retiring coal-fired power plants in the National Electricity Market (NEM) with an equal number of nuclear reactors. Specifically, they aim to introduce five large-scale nuclear reactors, each with a capacity of around 1GW, and two small modular reactors (SMRs), each at approximately 0.5GW, beginning in 2037 and 2035 respectively So, what would this cost?

According to the CSIRO's 2023-24 GenCost report, the capital costs for these nuclear projects are significant. A large-scale nuclear reactor comes with a capital cost off about $8,655/kW, while an SMR costs a staggering $28,580/kW. In practical terms, this means each large-scale reactor would require an investment of approximately $8.655 billion, and each SMR would cost around $14.29 billion. In total, the seven reactors would cost an estimated $71.855 billion.
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This enormous expenditure invites us to consider alternative uses of such funds, particularly in a country like Australia, where solar potential is among the highest in the world. For instance, NSW strata buildings represent a largely untapped market for solar energy, with only around 2%-3% penetration to date. It costs approximately $1.4/W to install solar on strata buildings (average across all strata building types). The below table presents a picture of the strata buildings in NSW that don’t currently have solar which can be used to get an idea of what could be done in strata electrification with but a fraction of the nuclear budget. Note, the size of a strata scheme has a bearing on the typical size of a solar installation.

Strata Scheme Size	Number of NSW Strata Schemes without solar	Average Solar Installation Size (kW)	Total Solar Potential (kW)
< 30 lots	78,549	12	942,588
31-60 lots	3,188	25	79,700
< 60 lots	2,196	39	85,644

The remaining total solar potential on NSW strata is therefore estimated to be approximately 1,107,932 kW (1.11 GW). At the average strata solar installation cost of $1.4/W, it would cost $1.55 billion to install solar on every remaining strata building in NSW. This is a mere fraction of the cost of a single large-scale nuclear reactor.

Large-Scale Nuclear Reactor	Small Modular Reactor	Solar on every remaining Strata Building in NSW without solar
$8.65 billion	$14.29 billion	$1.55 billion

But what about the intermittency issue often raised against solar? This is where battery storage comes into play. A typical battery installation into a strata building costs ~$842/kWh. Taking the cost of a large-scale nuclear reactor ($8.655 billion) and subtracting the cost of solar for all of NSW strata buildings ($1.55 billion), we’re left with a handy $7.1 billion. This would get approximately 8.44 GWh of battery storage installed across NSW strata buildings.

Assuming that the batteries were half full at the time of a statewide grid power outage, that there are roughly 1m individual apartments in NSW and that the average apartment uses 10kWh of energy in a day, this “virtual power plant” could provide enough power to run the state’s strata buildings for approximately 10 hours. If the power outage occurred during the night time, it would likely keep the lights on until the sun started shining the next morning and the batteries were able to start charging up again off the solar.

Most of the time you don’t have a statewide power outage and you would only have a regional power outage occurring. If this were to happen, the strata buildings in the rest of the state which don’t have a power outage could actually contribute power into the grid to assist not only strata buildings but also standalone houses and industry.

The reason that strata buildings are better than standalone houses for building out a solar + battery “virtual power plant”, is that they always have higher amperage wires connecting them to the grid, compared with standalone houses. This allows them to discharge power into the grid faster than standalone houses. This is a critical competitive advantage when the grid needs power quickly after a power outage.

Applying the same process but using the cost of an SMR ($14.29 billion), approximately 15.13 GWh of battery storage could be installed across NSW strata buildings. This would give strata buildings closer to 20 hours of backup power in the event of a grid outage. 

Contributor:
Sean Cowan
Energy Consultant, Wattblock