Australia faces a huge challenge in meeting its target of generating 83% of National Electricity Market (NEM) electricity from renewables by 2031. To be absolutely clear, that target is not the subject of this paper. Nuclear energy cannot possibly be part of the fuel mix that contributes toward that target.

Due to legislative and regulatory barriers associated with nuclear energy, combined with the need to gain broad social licence, even ardent proponents of nuclear concede that under the most ambitious timeframe it will be at least a decade, if not more, before any form of the technology is deployable in Australia.

This paper’s assessment of the potential role of nuclear energy in Australia is strictly limited to a decade or more from now— specifically, from 2040 forward. As the authors will show, a holistic model that takes into account the total system cost (TSC) of a fully decarbonised NEM in 2050 reveals a strong argument that a small, but significant, level of nuclear energy has a critical role to play in order to achieve decarbonisation at the lowest possible cost.

Importantly, it must be stressed that this paper is focussed on modelling decarbonisation of the NEM in isolation from the broader economy. This is to say that the cheapest decarbonisation pathways of heavy industry, transport, and other non-grid entities are not modelled, nor are the ways in which the decarbonisation pathways of these entities may impact the cheapest decarbonisation pathway of the energy grid. Were a fully integrated, economy-wide decarbonisation cost model to be developed elsewhere (a monumental undertaking far beyond the capacity of the model used in this paper), it may show different results.