It seems strange to try to convert a nuke to diesel I can think of a whole host of problems
1. Can enough diesel power be fitted within the existing hull to equal the power of the reactor?
2. Since the original design was nuclear, there were no provisions for carrying fuel. Where would the fuel tanks be fitted within the existing hull?
3. Where would one put the extra batteries that a diesel boat would need?
If the hull has to be modified, wouldn't it be easier to design a diesel boat from scratch?
The first will not be commissioned before '35. The current fleet of Collins class with be refurbished to fill the gap but they will always be below standard.
The French were forewarned the deal would be scrapped last June when PM Morrison met Premier Macron for parlay in Biarritz, southern France. He told him, after six years and AUD$2.2b and no steel cut, that Australia would soon announce termination of the contract. This is no surprise announcement to the French.
The Naval Barracuda nuclear submarine de-tuned to diesel-electric was never going to fly, and it is not France's fault.
From the very start it was a poor decision from the Aussies, that decision was political and came from the Left. First by the in-power Labor party who made the initial choice because 'nuclear' is anathema to their ideology, and then followed through by a left leaning conservative PM after the following election. Australians all by that stage new that this compromise, to convert a nuke to diesel, for whatever reason, was going to be a stupid and costly waste of time and result in a expensive useless lemon. Australians aren't that stupid, they already have them with the Collins and the French contract would have delivered no better for an enormous waste of money.
The major brake for Australia not to acquire nuclear boats was left/green political opposition and the fact it has no reactors (except the one) and therefore no R and D, training or back up that was assumed required.
The first is history. The Labor Party* now realise these particular boats are vital and support the decision while Aussies now understand the Greens a nothing more than a noisy marginal voice largely to be ignored. The second has been circumvented by technological advancements in high-pressure ship board reactors and so an established atomic industry is not essential.
This is a monumental step for Australia and was actually unthinkable just ten years ago. What has changed of course has been the worrying rise of an intimidating and nationalistic 'Xi-Jinping China', and its military influence in the Indo-Pacific region. Australia is very aware of the danger of China's military, political and economic expansion in the western Pacific (and beyond), and will not allow China to dominate unchallenged. This is Australia's region and it understands it must do all it can to buffer China without relying on outside help. Capable nuclear submarines are a very big stick.
The United States and the UK know that Australia is strategically placed to do this but needs the technological assistance to realise it. To offer submarine nuclear tech is a very big and generous call and Australians are now well aware (if not already) that their trust is held in the highest regard by its two strongest and greatest allies, and are grateful.
* The Collins class are a Swedish design built in Osbourne Sth Australia and were selected by the Labor Party PM Bob Hawke. At the time he had a choice of two, either a German or the Swedish design. Ignoring the Germans (what would they know about subs?) he chose the Swedish boat not on capability or innovation, but simply because being a Social Democrat he admired Sweden. That's true and that is why Australia over the years has really struggled with defence spending, too many choices are made solely for politics and ideology and not for common sense.
How long will this delay the introduction of new subs to the Australian Navy? How old are the existing Australian subs?