Suddenly, there is a growing discussion in Australia about embracing nuclear power as a solution to the ongoing energy challenges. This shift in focus is driven by a recognition that climate activists are unlikely to relent in their campaign against carbon dioxide emissions, which has led to increased pressure to phase out affordable coal-fired power. Those who are concerned about ensuring a future with reliable and accessible electricity are now advocating for nuclear power as a crucial option.
Currently, approximately 85% of Australia's electricity is generated from coal-fired power plants, especially in the Eastern Grid that links Queensland, NSW, Victoria, Tasmania, and South Australia. Despite efforts to transition away from coal, it remains a significant part of the energy mix and will continue to play a role for many years. However, the coal industry faces threats from renewable energy proponents, policymakers pushing for ambitious renewable energy targets, and other factors like the Federal government's Large-Scale Renewable Energy Target (RET).
This is where nuclear power comes into play. Nuclear power is the only self-sustaining energy source that does not produce carbon dioxide emissions during electricity generation. While debates over CO2 continue, the focus should remain on securing reliable and affordable electricity, regardless of the source. This includes considering the potential for nuclear power.
In Australia, there has never been a nuclear power plant, and the possibility was banned through legislation in 1998. However, the growing interest and concern about energy security have sparked a renewed conversation about nuclear power as a viable option for the nation's energy future.
In the initial scenes of "The Smartest Guy in the Room," a documentary exploring the downfall of the US energy trading giant Enron, various accounts attempt to explain the company's collapse. Enron, once valued at $63 billion, rapidly grew but ultimately disintegrated due to its profiteering from manipulating the Californian energy crisis two decades ago.
One explanation offered is that Enron's executives became "blinded by the money" and failed to see that they were essentially sabotaging their own success. The primary flaw identified can be summed up as "pride," but it was exacerbated by arrogance, intolerance, and greed.
Enron serves as a cautionary tale for governments endeavoring to transform their electricity systems to align with the imperatives of addressing climate changes and renewable energy sector. The tumultuous conditions exploited by Enron bear resemblance to the challenges faced within Australia's National Energy Market.
The key lesson from Enron is that corporations tend to thrive on volatility and will take advantage of regulatory vulnerabilities to generate quick profits. To safeguard against such practices, patient capital and government intervention are crucial.
A discussion paper, commissioned by Industry Super Australia and supported by unions, outlines a strategy for fostering patient capital in the energy sector. Superannuation funds, being a source of long-term investment, have been significant backers of renewable energy projects, although with varying degrees of success.
The discussion paper aims to strip away ideological biases and present a forward-looking perspective on the future direction of Australia's energy market. It critiques the haphazard nature of government policies and outlines where government efforts should have commenced in the journey to decarbonize the energy system.
The discussion paper produced by the super fund does not aim to promote nuclear energy, but it has coincided with a resurgence of interest in the nuclear power debate within Australia's energy discourse.
The facts challenge the notion that nuclear power is primarily a cultural or political battleground, emphasizing its role in electricity generation.
Internationally, the prevailing view is that nuclear power offers a valuable emissions-free option if renewable sources fall short of satisfying more than approximately one-third of a nation's energy needs.
Calls are growing for the Prime Minister to support a review of nuclear energy potential in Australia. Queensland MPs Keith Pitt and James McGrath have proposed inquiry terms of reference to evaluate advancements in nuclear energy, including small nuclear reactors and thorium.
The NSW parliament is also planning its own review, while One Nation MLC Mark Latham has introduced legislation to legalize uranium mining and nuclear facilities, emphasizing that addressing climate change requires more than a fixation on renewables.
NSW Deputy Premier John Barilaro has advocated for a national referendum to lift the ban on nuclear energy and has suggested potential locations for a nuclear power station.
Prime Minister Scott Morrison has expressed openness to nuclear energy if it proves economically viable, although no concrete plans for reactor construction in Australia have been presented.
Proponents of nuclear energy are focused on a long-term strategy to advocate for its role in the country's energy mix.
William Magwood, the director-general of the OECD Nuclear Energy Agency (NEA), made his first official visit to Australia. During his visit, Magwood held discussions with various Australian authorities, including the energy ministry, the Australian Safeguards and Non-proliferation Office, the Australian Radiation Protection and Nuclear Safety Agency, the Australian Nuclear Science and Technology Organisation, and the Energy Policy Institute of Australia.
Australia does not currently have operational nuclear power plants, but it ranks as the world's third-largest uranium producer and possesses around 30% of the world's known uranium resources.
Magwood's discussions in Australia centered on uranium resource issues and covered NEA analyses related to decarbonizing electricity systems and managing radioactive waste.
While there are no immediate plans to build nuclear plants in Australia, the country became a member of the Generation IV International Forum in 2016, with the OECD Nuclear Energy Agency serving as its technical secretariat. Magwood's talks encompassed the latest developments in advanced nuclear systems research and development.
The debate surrounding nuclear energy remains contentious in Australia and has faced significant challenges when it comes to government discussions.
Environment group Friends of the Earth continues to actively campaign against nuclear energy, asserting that Australia does not require nuclear power. Instead, the group advocates for renewable energy sources such as bioenergy, geothermal hot rocks, solar thermal electricity with storage, and occasionally hydro-electricity to fulfill baseload power needs. They argue that nuclear power is directly associated with the proliferation of weapons of mass destruction and highlight vulnerabilities in nuclear reactor facilities. Additionally, they stress that clean energy solutions can be implemented immediately, while developing nuclear power would take at least 15 years.
Stephen Anthony, the chief economist of Industry Super Australia, acknowledges that the inclusion of nuclear energy in the discussion has raised concerns. However, he clarifies that this does not necessarily indicate a pro-nuclear stance, just as not excluding solar energy does not make them pro-solar. Anthony's conclusion is that decarbonizing Australia's energy sector would be challenging without incorporating nuclear power.
The discussion challenges mainstream thinking in the energy market, suggesting that it may be misleading in several aspects. It criticizes partial analyses of the problem that overlook economy-wide implications and emphasizes that assessments of technologies often have overly short time horizons.
A significant focus of the report is the real cost of renewables and storage and the complexities of managing increased variable power generation. As variable electricity production rises, its value to the system diminishes, potentially leading to curtailment of solar and wind projects during high-production periods. There is also the looming possibility that some wind and solar projects could become stranded assets.
Intermittency issues are a global concern, and Australia's Federal Energy Minister, Angus Taylor, is working on addressing them with a reliability obligation for generators.
William Magwood, the director-general of the OECD Nuclear Energy Agency (NEA), emphasizes the need for strategies that accurately reflect renewables' costs and attributes. He believes that each country will need to determine how to meet its future electricity supply needs as it becomes apparent that a certain level of baseload supply will still be necessary.
One common criticism of nuclear energy is its perceived high cost, although the expense varies depending on the project's location. Nuclear projects can range from as high as $7 billion per gigawatt in Europe to as low as $2 billion per gigawatt in China. Even at its most expensive, nuclear energy is twice the cost of onshore wind power.
However, nuclear power offers advantages that intermittent energy sources cannot provide. A recent OECD report, using a 3% interest rate, assessed the levelized costs of various energy sources. It estimated $100 per megawatt-hour for commercial solar, $70 per megawatt-hour for onshore wind, and $50 per megawatt-hour for nuclear.
According to the OECD, a cost-effective low-carbon energy system would likely consist of a significant share of variable renewable energy, an equally substantial share of dispatchable zero-carbon technologies like nuclear energy and hydroelectricity, along with some gas-fired capacity for added flexibility. Nuclear and hydroelectricity contribute by generating large amounts of low-carbon power predictably, meeting the needs of households and industries.
For Australia's future energy mix, the likely components will include renewable technologies such as solar, wind, hydro, and battery storage, with some pumped hydro and combined-cycle gas generation as backup. However, gas generation produces significant emissions, which may hinder its long-term viability without carbon capture and storage. Coal also presents risks unless carbon capture and storage become feasible options.
Australia's absence from the list of First World economies with nuclear power experience and management of nuclear plants is considered undesirable by the Industry Super discussion paper. It states that this precludes Australia from making informed decisions regarding major emission reduction options. Furthermore, Australia is trailing behind several Second and Third World economies, including Argentina, Mexico, Bangladesh, Turkey, Indonesia, and Vietnam, in considering nuclear energy as part of its energy mix.
This lack of consideration leaves Australia exposed to significant risks, as it is uncertain whether solar and wind energy can provide all primary energy needs feasibly. While there is storage capacity for a solar and wind system that supplies all primary energy, the paper highlights that capacity does not guarantee feasibility. To provide 1½ days of energy storage, Australia would require approximately 100 Snowy Mountain 2.0 schemes at a total cost of $700 billion. This cost could support the construction of 100 to 150 nuclear reactors, covering more than half of Australia's current primary energy requirements.
The paper assesses the economics of batteries as less favorable. To achieve 1½ days of energy storage, it would cost $6.5 trillion, equivalent to the construction of about 1000 nuclear reactors, based on the Tesla battery in Adelaide. For household batteries, it would cost approximately $7000 per household every 10 years to provide 36 hours of backup.
While transitioning to electric vehicles may increase storage capacity, it could have implications for peak-time loads. The paper argues that intermittent technologies may not be the best solution for delivering all primary energy and questions whether they are suitable for supplying all electricity at current demand levels.
Although Clive Palmer's United Australia Party may not have achieved significant success in the last Federal election, his substantial advertising campaign promoting a nuclear-powered future may have raised awareness and sparked discussions on the topic. The extensive advertising campaign, with an estimated $80 million budget, likely influenced voter preferences and contributed to the Coalition's success in Queensland.
While Clive Palmer's advertising was hard to miss, it remains uncertain whether it had a substantial impact on public opinion. Nevertheless, the discussion about nuclear power continues to evolve, with political leaders in Australia showing a more mature approach to the issue. The Greens party remains an exception to this trend, as reported in The Australian's Cut & Paste section.
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