Australia’s Nuclear Submarines – Costs and Timelines

The dust is settling from the momentous AUKUS announcement in San Diego. What can we expect in the coming decade?

A follow-on examination of the known facts by Jack Dillich

A Virginia class fast attack submarine

Introduction

The AUKUS trilateral pact made a big splash in the news recently. Leaders from the United States, United Kingdom and Australia gathered in San Diego, California to announce a plan to provide Australia with the capability and technology to deploy conventionally armed, nuclear-powered submarines. What was divulged was the “optimal pathway” to acquire a small fleet of nuclear-powered boats for the Royal Australian Navy.

The announcement was symbolic of unity among the three allies. It was short on details, however; many of the desired granularities were not forthcoming. These are early days yet and each of the three governments must formulate the practical steps necessary to achieve success.

What follows is an analysis of what is known today, as well as what is likely with respect to Australia’s desire to obtain its first nuclear submarines.

The Phases

The AUKUS announcement described a plan that involves three distinct phases.^1,2

The first phase has already begun and will see an increased presence of US and UK submarines in Australian waters. In addition, the Australian government plans to improve the infrastructure in Perth and Adelaide over the coming four years. Let’s call this the “plan and upgrade” phase.  By 2027, it is expected that four US nuclear boats and one UK submarine will be permanently deployed from Australia.

The next phase aims to avoid an undersea capability gap that would otherwise eventuate due to the aging Collins class. It involves the acquisition of at least three US nuclear submarines – ostensibly new Virginia class and with US congressional approval pending – with the first one arriving in the early to mid-2030s. The long pole in this tent will undoubtedly be related to naval expertise, not procurement. Hundreds of RAN personnel will have to gain valuable training and experience in the coming years by serving aboard US nuclear boats.

The third phase is very long-term and may be called the “design and build” phase. It involves a collaborative effort to design a follow-on to the UK Astute class. What was once termed the SSN (R) in the UK is now called “SSN AUKUS”. These submarines are to be built in the UK and in Australia.

It was announced that the total cost of all three phases of the AUKUS submarine deal may approach $368 billion.³ This total was a guestimate- it was neither itemized nor budgeted. Unless otherwise stated, all costs that follow are in $AU.

Each successive phase has an escalating cost and a diminishing chance of success.

Cost:      Low                           $ billions                                                  Probability        Low            <20%

                Medium                   $ tens of billions                                                                       Medium   about 50%

                High                         $ hundreds of billions                                                              High         ˃80%

Phase 1 – Deployment of US and UK Boats to Australia

HMAS Stirling is the RAN base on the Indian Ocean that is part of Fleet Base West. Situated on the west coast of Australia, it is the largest of the RAN’s shore establishments and has a base population of approximately 2,300 service personnel and hundreds of civilians. HMAS Stirling provides operational and logistical support to the RAN ships, submarines and aircraft based in WA.

In future years, there will be a permanent, rotational presence of one UK submarine and four US nuclear boats at the base in support of the AUKUS submarine pact. The port facilities will be improved over the coming years. In addition, upgrades are expected in Adelaide. The effort to identify a potential submarine base on the east coast will also begin soon, apparently funded by this phase 1 allocation. As part of the total $368 billion, approximately $9 billion will be spent domestically in coming years on upgrading Australian naval infrastructure, including the naval base HMAS Stirling. The government claims the $9 billion will be cost-neutral over the forward estimates, with $3 billion in cuts to other areas of defence.

Phase 2 – Acquisition of US Boats

The US has plans to increase its production of Virginia class SSNs. To ensure a cadence of at least two boats per year going forward, the US government recently increased funding in a $US 2.4 billion effort last year. There was a recent request for an additional $US 2.2 billion next year. The Americans appear to be serious about their commitment to AUKUS while increasing their number of operational attack submarines above 50.⁴

Under phase 2, Australia plans to purchase at least three – and perhaps up to five – US nuclear submarines. Australia has agreed to pay a fair price for each; a new Virginia class would be about $5 billion. In addition, Australia has agreed to make a proportional contribution to the submarine industrial base in the US to help lift production and maintenance capabilities to offset the loss of those submarines. It was reported that Australia would invest some $4 billion in the American and British submarine industrial bases over the next four years. That includes funds for U.S. workers to help Australia set up its own nascent submarine industrial base in Adelaide and for their Australian counterparts to work in U.S. shipyards across the country.

In the coming decade, the size of the RAN submarine force must more than double. Consider the need to recruit RAN personnel, and to supply candidates to the US nuclear navy training pipeline.

Commissioned RAN submarine officers will be distinguished university graduates in STEM. Each must successfully complete over a year of nuclear power training on the east coast of the US, which includes qualification on an actual nuclear prototype. Experience will have to be gained via assignments as division officer (3 years), department head (3 years), executive officer (3 years). It will therefore take at least 12 years to achieve the expertise and qualifications for command. (In the UK submarine force, only a portion of the wardroom is nuclear qualified – it remains to be seen how the RAN may approach this.)

Enlisted candidates, after completing their rating qualifications, will also have to undergo more than a year of nuclear power training. The first Australian nuclear submarine will require several senior enlisted in various ratings. Again, the pipeline extends over about 10-12 years.

How many candidates must enter the pipeline? Let’s assume the RAN must operate four nuclear boats by the mid-2030s. A nuclear attack submarine has a complement of at least 12 officers and 100 enlisted. It is therefore estimated that a RAN fleet of four nuclear attack submarines will require a minimum complement of about 50 officers and 400 enlisted. To afford periodic shore assignments, however, the RAN would have to increase these numbers such that there would eventually need to be at least 75 officers and 600 enlisted to operate four boats. Up to half of the enlisted (or 300) would have to be nuclear trained.

These numbers represent a snapshot in time – say the year 2035 – and they are the minimum complement needed to sustain the planned nuclear fleet. Assuming all officers are nuclear trained, and assuming a retention rate of 50%, it can be concluded that at least 150 officers and 600 enlisted will have to enter the nuclear training pipeline in the coming decade or so.

This will involve a substantial increase in submarine staffing. The RAN currently has over 10,000 permanent, full-time personnel, but only about 500 serve in submarines.

It was recently announced that three RAN officers are expected to graduate from US nuclear power training this year. Upon graduation in June, they will attend submarine school and then be assigned to a nuclear submarine for a tour of duty. This is a propitious start, but many more are needed every year for the coming decade.

The entire phase 2 includes the purchase of up to five US boats, investment in US and UK shipbuilding, and the recruitment and overseas training of hundreds of RAN officers and enlisted.  This “recruit and train” phase is expected to cost a total of nearly $59 billion. Using back-of-envelope estimates, this will be about $5 billion per year.

Phase 3 – SSN AUKUS

The Astute class is the UK’s latest class of attack submarine. There are six such boats in operation today; the seventh, and last, is due to be commissioned in 2026. The first of this class was commissioned in 2010 and is expected to serve until the late-2030s.

In 2021, prior to AUKUS, the British announced their intention to begin design work for the successor to the Astute class. They referred to this design as the SSN (R). Large contracts were awarded to BAE Systems and Rolls-Royce.

As part of the AUKUS announcement, however, it was announced that the new submarine design would be a joint project between the UK and Australia (and the US to a lesser degree). This phase 3 description has the newly designed boats beginning to replace the Astute class in the Royal Navy in the late 2030s.

This phase, dubbed “design and build”, is largely aspirational. The design and development work will continue with the brand-new submarine, now known as the SSN-AUKUS, taking advantage of work the British have already been doing to replace their Astute-class submarines. The new submarine would eventually be adopted by both the UK and Australia, using American combat systems. 

This phase is expensive. It is also the sexy aspect of the AUKUS deal, receiving nearly all the attention in Australia. There are prospects of employment for thousands of trade workers, PhDs, and public servants. Because phase 3 looks well beyond the horizon, its details are sketchy.

It appears that the UK would build its future SSN-AUKUS class boats at Barrow-in-Furness, while Australia would construct theirs in South Australia. Although Australia currently lacks the capability to design and construct a nuclear submarine, it is certainly possible that sufficient resources could be brought to bear to make it a reality. I estimate that approximately $300 billion of the estimated $368 billion would be directed at this phase. Some have conjectured that one submarine could be built every few years from the early 2040s through to the late 2050s, with five SSN-AUKUS boats delivered to the Royal Australian Navy by the middle of the 2050s.

How expensive might this be? The current annual defence budget is about $50 billion, which is 2% of Australia’s GDP. The government has framed the additional AUKUS costs in terms of an additional percentage of GDP for future estimates (e.g., an additional 0.15%). When the economy is booming, this is an appealing way to look at the cost. When Australia’s 30+ years of economic expansion ends, however, very difficult choices will have to be made.

Just how difficult is nuclear submarine construction? Consider the effort by the Americans to build a Virginia class boat. Construction of a single Virginia-class submarine requires about nine million labor hours. This is what is needed from a shipyard that has been doing such work for decades. After years of gains in efficiency, the US Navy estimates that the marginal cost of each new boat is about $US3.5 billion ($5 billion).

A valid and operative question is whether Australia should spend additional resources building its own small fleet of nuclear boats. What benefit would there be from a defence or deterrence perspective? How much less expensive would it be for Australia to simply purchase additional nuclear submarines from the UK or US in the 2040s and beyond?

Many are inclined to believe that government creates wealth and jobs. Many of these people may be tempted to support domestic submarine construction for economic reasons. Phase 3 would not boost the economy or create jobs in aggregate; it would simply reallocate $300 billion in capital. 

Again, so much can happen in the coming decades that might change the calculus.⁵ Debates about costs and direction will continue. Federal elections every three years, budget considerations, geo-political changes – there are “many a slip twixt cup and the lip”. Phase 3 extends well into the 2040s, and it is very likely to undergo revision in coming years.

Radioactive Waste

Australia currently has no power reactors, and therefore has no need for high level radioactive waste (HLW) disposal capability. Initial reports about the AUKUS pathway suggest that Australia will be responsible for the disposition of spent submarine nuclear fuel.

The US has operated hundreds of naval reactors since the 1950s and has the infrastructure to dispose of used nuclear fuel safely. The US Navy has decommissioned more than 250 naval reactor cores and placed more than 30 metric tons of spent fuel in dry storage in Idaho.⁶

A new Commonwealth agency was created in 2020 to establish a national radioactive waste management facility near Kimba in South Australia. To date, little progress has been evident. The facility, which may open in the early 2030s, is being designed to accept low and intermediate level waste only – not HLW.

Because the Phase 2 nuclear boats will originate from the US, Australia would be wise to continue negotiations regarding the issue of HLW responsibilities. This is especially important if the initial three or more submarines are transferred from America’s operational fleet.

Conclusion

At Point Loma in San Diego in March, the US President stated:

“AUKUS has one overriding objective – to enhance the stability of the Indo-Pacific amid rapidly shifting global dynamics.”

I believe that the first two phases of the AUKUS agreement have a high probability of success and will enhance stability at a reasonable cost. The permanent presence of five nuclear submarines in Indo-Pacific waters will provide additional deterrence in the coming decade. This will be supplemented with a few of Australia’s own nuclear submarines beginning in the mid-to-late 2030s.

We can expect ongoing discussions regarding phase 3, which is an overly ambitious plan that is unlikely to survive in its current form. The project costs and risks are simply too high. Australia has no commercial nuclear industry, and its limited shipbuilding capability has no nuclear experience. Any plan to build nuclear boats in South Australia would require tremendous resources.

Australia is right to feel proud of its domestic capabilities. It is understandable that Australia cherishes its sovereignty and independence, but it must be acknowledged that its comparative advantage is not in nuclear design or submarine construction. There is no doubt that the country is capable. With government backing, Australia could undoubtedly produce its own automobiles as well. The operative question has to do with the wise use of limited national resources, not ability. A fleet of eight or fewer is not large enough to justify the eye-popping expense that would be required to duplicate what already exists overseas.

Phase 3 would involve the creation of a vast array of governmental bureaucracy. It would duplicate much of what already exists in the US and UK – naval nuclear laboratories, capable nuclear shipyards, design authorities, equipment suppliers, training facilities, regulatory headquarters, etc. If it is to proceed, proponents will have to convince the public that the benefits of a nuclear infrastructure in Australia will outweigh the considerable costs.

Let the debate begin. In coming decade, it may become obvious that Australia’s undersea capability is best assured by the continued acquisition of nuclear submarines designed and built in the UK or US.

References

1. Joint Leaders Statement On AUKUS | Prime Minister of Australia (pm.gov.au)
2. The AUKUS Nuclear-Powered Submarine Pathway | About | Defence
3. What is the Aukus submarine deal and what does it mean? – the key facts | Aukus | The Guardian
4. How the US plans to expand its submarine industrial base for AUKUS (defensenews.com)
5. AUKUS debate: we live in a time of no war and no peace, so we need to educate the public about Australia’s strategic position (afr.com)
6. US Navy says it met Idaho deadline on spent nuclear fuel (navytimes.com)

Jack Dillich

Mr. Dillich holds an advanced degree in Nuclear Engineering and is a former nuclear submarine officer. He served as an executive with the Australian Nuclear Science and Technology Organisation (ANSTO) and was responsible for the operation of the nation’s only nuclear reactor. Mr. Dillich was also Head of the Regulatory Branch at the Australian Radiation Protection and Nuclear Science Agency (ARPANSA).