Australia can make the historic transition to a low-emissions electricity system without the lights going out and without power bills skyrocketing.
But getting to 100 per cent renewable energy over the next two decades would be expensive unless there were major technological advances to backup renewable supply during rare, weather-related renewable energy droughts. That’s one reason it’s sensible for Australia to continue its current strategy of net zero emissions in the National Electricity Market (NEM) by the 2040s, not absolute zero emissions or 100 per cent renewable energy.
Gas generation with negative-emissions offsets will be the lowest-cost ‘bridging’ technology backup until a zero-emissions alternative, such as hydrogen-fired generation, pumped hydro storage, or carbon capture and storage, becomes an economically competitive alternative.
It is theoretically possible that nuclear energy, in the form of small modular reactors, could play this role in the 2040s or beyond. For now, however, this technology is far from commercial reality, its promised benefits are as yet unrealised, and its costs are unknown with any level of confidence, particularly in this backup role.
There should be three parts to Australia’s net-zero electricity system plan.
First, maintain the primary focus on increasing investment in solar and wind generation, firmed with storage and gas while closing the coal plants. The Integrated System Plan (ISP) supports this as the lowest-cost pathway to net zero. Even without the current prohibitions,
current nuclear technologies are too expensive and would take too long to deploy to be useful here.
Second, fully develop the role of gas as a backup technology, while supporting research and development on the alternatives that are very costly today.
And third, stay close to technical and economic developments in nuclear technology.
Australia should position itself to be a fast adopter of nuclear if and when it becomes economical. Preparatory work on legislation and regulations could begin ahead of that time if justified by emerging circumstances.