Australia is having a debate over nuclear power. Hamilton and Heeney weigh in with an important perspective:

On the basis of many conversations about Australian energy policy over the years, we can divide the proponents of nuclear energy into three groups.

The first might be called the “ideologues”. They favour nuclear not because of its zero emissions, but despite it. Indeed, many are climate sceptics. They hate renewables because the left loves them, and they favour nuclear because the left hates it.

The second might be called the “engineers”. They favour nuclear energy because it’s cool. Like a Ferrari, they marvel at its performance and stability. They see it as the energy source of the future. The stuff of science fiction.

The third might be called the “pragmatists”. They are not super attentive or highly informed about the intricacies of energy policy. They superficially believe nuclear can serve as a common-sense antidote to the practical shortcomings of renewables.

Conspicuously absent are those who might be called the “economists”. They couldn’t care less about exactly how electrons are produced. They simply want the cheapest possible energy that meets a minimum standard of reliability and emissions.

On the basis of the economics, Hamilton and Heeney conclude that nuclear is expensive for Australia:

The CSIRO estimates the cost of 90 per cent renewables, with firming, transmission, and integration costs included, at $109 per megawatt hour. Based on South Korean costs (roughly one-third of the US and Europe), a 60-year lifespan, a 60 per cent economic utilisation rate (as per coal today), and an eight-year build time (as per the global average), nuclear would cost $200 per megawatt hour – nearly double.

The same electrons delivered with the same reliability, just twice as expensive under what is a fairly optimistic scenario.

Note--this is taking into account that nuclear is available when the sun doesn't shine and the winds don't blow--so are batteries.

I suspect that Hamilton and Heeney are right on the numbers but it's this argument that I find most compelling:

If you need external validation of these basic economics, look no further than the opposition’s own announcement. Rather than lift the moratorium and allow private firms to supply nuclear energy if it’s commercially viable, the opposition has opted for government to be the owner and operator. A smoking gun of economic unviability if ever there were one.

I am optimistic about the potential of small modular reactors (SMRs) based on innovative designs. These reactors can ideally be located near AI facilities. As I argued in the Marginal Revolution Theory of Innovation, innovation is a dynamic process; success rarely comes on the first attempt. The key to innovation is continuous refinement and improvement. These small reactors based on different technologies give as an opportunity to refine and improve. To achieve this, we must overhaul our regulatory framework, which has disproportionately burdened nuclear energy—our greenest power source—with excessive regulation compared to more hazardous and less environmentally friendly technologies.

Electrons are electrons. We should allow all electricity generation technologies to compete in the market on an equal footing. Let the best technologies win.