Nuclear energy is a hotly contested topic for the upcoming election, with both sides of politics looking for a plan that enables Australia to hit net zero emissions by 2050 while maintaining an affordable, reliable energy supply. Peter Dutton has declared nuclear a central piece of the Coalition’s energy plan, but with the policy light on details, there’s a lot of questions left behind.
What would a nuclear future look like for Australia? Does it help or hinder the pursuit of net zero? And is it cost effective for Australian taxpayers? All these questions – and more – are answered in this week’s podcast with energy expert Alison Reeve, and host Kat Clay.
Transcript
Kat Clay: Nuclear energy is a hotly contested topic for the upcoming election, with both sides of politics looking for a plan that enables Australia to hit net zero emissions by 2050 while maintaining an affordable, reliable energy supply. Peter Dutton has declared nuclear a central piece of the Coalition’s energy plan, but with the plan light on details, there’s a lot of questions left behind.
What would a nuclear future look like for Australia? Is it cost effective, and does it help or hinder the pursuit of net zero? I’m Kat Clay, Head of Digital Communications, and I’ll be the first to admit I don’t know a huge amount about nuclear energy. With all the talk about it, I wanted to spend some time cutting through the politics to get a better understanding of the situation.
So, I’m thrilled to have enlisted my colleague, Alison Reeve, who is a far greater mind than I.
So, I’m wondering if we can talk a little bit about what Dutton’s proposed and then kind of dig more into that.
Alison Reeve: What the opposition have said so far is that they think they would like to build nuclear power stations on seven sites, one in WA and the rest on the east coast. It’s unclear how big those nuclear power stations would be, and it’s unclear which technology they would use.
There are several different types of nuclear technology. They said that they want to deliver their first two sites by 2035 if they use the technology called a small modular reactor or 2037 if they’re using the larger power stations. They’ve said they want to use full public ownership of those power stations, although, obviously, even if there’s full public ownership, you would have to contract with the private sector to build them. And it’s unclear what they’re going to cost. It’s unclear how they would fit with the rest of the market, and while they have said that they do see perhaps a larger role for gas power generation in the electricity market if they were to bring nuclear in, they haven’t really said how they think that would work.
It seems that they think this would extend the life of coal fired power stations to fill the gap while the nuclear is being built but haven’t really gone into specifics about how that would work.
Kat Clay: Also, if they’re planning to build the nuclear stations on top of the coal sites.
How’s that going to work if they need the coal sites to keep running?
Alison Reeve: that is an excellent question, Kat. There are a number of sites on the east coast where there used to be coal fired power stations and those are not there anymore. For example, the site of the old Liddell power station in the Hunter Valley.
The thing is that those sites belong to other people. The Liddell site belongs to AGL and AGL has its own plans for that site. They’re putting in a big battery and then they’re looking at building a, what they’re calling an industrial hub there. So, bringing in lots of new industries into that site to take advantage of the transmission systems that are there already.
Part of the coalition’s logic was that if you put the nuclear power stations in the same places as where the coal was, you don’t need to build new transmission lines. But other people own those sites and other people have plans for exploiting those transmission connections and it is not clear how you would persuade those people to build nuclear or whether you would get into something like compulsory acquisition of those sites.
Kat Clay: Yeah. I feel like there’s two big problems in my mind there. First of all, you just hit the nail on the head with the compulsory acquisition. because they’re privately owned, the government would then need to acquire them, and I imagine that that would be quite expensive.
the other thing is I can’t imagine that, switching out types of power between nuclear and coal is the same as getting a sparky to your house to just put in some new light switches and switch over the old light bulbs to LEDs. I imagine that’s a lot more complicated than just plugging in a nuclear power station.
Alison Reeve: It definitely is, particularly if you’re building a large nuclear power station. So, the traditional ones, right? So, they are very large construction projects. And they take up a lot of space. Now, to be fair, there is a fair bit of space on these sites where the coal fired power stations were, because They’re not like surrounded by houses right up against the boundary or anything like that.
They do have a lot of spare land around them. But it is also that construction process that’s a little bit worrying. most nuclear power stations that have been built worldwide over the last 20 years have taken a lot longer than originally planned and have Cost a lot more than originally planned.
And that’s because they’re complex to build. And the other, you know, the other side of that is, there’s no reason to believe that the experience would be different in Australia. Given that, as our former colleague Marion Terrill used to talk about a lot on the podcast, Australia is not particularly good at construction.
large construction projects in Australia tend to run over time and over budget anyway. even if they’re things we’ve built many times before, like freeways or bridges or railway lines. So nuclear power stations are not going to be any different, in the Australian context. And that means, you know, even if the sites can be secured, it’s really hard to see that Those would come online in 2035 or 2037, which is, and the reason that those dates are important is because those are the dates where most of the coal fired power is going to be gone.
And so, we need replacement capacity to be there.
Kat Clay: Yeah, and I think there’s a really good point in there, right? And that comes from kind of infrastructure projects, which is, have we done a cost benefit analysis of what these nuclear power stations would cost the taxpayers. I mean, is it worth it for us?
I think it’s a little hyperbolic, but Jim Chalmers put it as economic insanity. is it more cost effective to build renewables for the Australian taxpayer?
Alison Reeve: So certainly all of the modelling exercises that I’ve seen nuclear comes out as the most expensive option and the most cost effective combination of different generation technologies is mostly solar and wind with a good bit of storage in the form of pumped hydro and batteries in order to provide the sort of stability in the power grid, plus some gas for backup.
it doesn’t matter whose model you use, that tends to be what comes out as the most economic option. we haven’t actually seen anything from the coalition yet. I presume at some point they are going to, if they’re going to take this as a major policy to the election, they are going to have to cost it.
I hope that they are doing that work. It’d be very interesting to see it when they do. But in the meantime, everybody else’s modelling shows that this is not actually a cost-effective thing to do.
Kat Clay: I think that’s something that we always have to keep in mind when we’re talking about policies and politics is like, even if it is potentially a good source of energy, how much is this going to cost people?
And is there, can we get a better deal for the Australian public? It’s something that came up with infrastructure so much is like Does this have value for the people who are paying for it. I think the question that did sit in my mind from Dutton’s speech as well is it accurate to say that we’re not going to hit those kind of targets at the moment, the rate we’re going like, is there other things that need to be done right now with the current government, is there more that they should be doing in order to hit those targets other than just nuclear?
Alison Reeve: it’s important to be clear here, which target we’re talking about. there are kind of three that are relevant. One is net zero by 2050. both parties are committed to that it’s hard to judge this far out from 2050, whether we’re on track or not but the target that’s important for judging that is the target we have for 2030.
Now that is an emissions target, so that is about more than just the electricity sector, it’s also about what happens in transport and what happens in industry and what happens in farming. The last set of projections that the government put out, we were reasonably on track to hit that target by 2030.
But a lot of that relied on the electricity sector. And so, the target that the government has in the electricity sector is to get to 82 per cent of electricity coming from renewable sources by 2030. There has been, a lot of concern both within government and in the industry more generally about progress towards that target.
And that’s because basically because a couple of things happened. post COVID, there was a lot of disruption of supply chains internationally, which held up a lot of projects. We’ve also had inflation, which has pushed up the cost of a lot of those projects. It’s not just about building more solar farms and more wind farms.
We also have to build the transmission to connect those up to where the electricity is being used. And that gives you a bit of a chicken and egg problem. And you’ve got to do a lot of coordination and get a lot of sequencing right in order to make that work. for a while, there were people talking about the progress having stalled, but I think with some data that was released just in the past week from the Clean Energy Council, it feels like that has started to pick up again, which is great, but there is still an awful lot that needs to go right.
Pretty much everything that is in the pipeline at the moment has to come in on time if we’re going to hit that target in 2030. Now, the thing about the target in 2030, you know, if we only get to 75 per cent renewable energy by 2030, that would actually be really great, right? That would be a huge achievement for Australia over 30 years to have taken the share of renewable power from 2 per cent to 75%, right?
So, I’m not too bothered about the number. What bothers me is that we need to get the capacity in place before any of the coal closes. We’ve already seen one decision earlier this year with the Arari Power Station to keep that power, which is a coal fired power station, to keep that open longer. the company that owns that power station basically said it could only keep it open under a financial deal with the New South Wales government.
So, the New South Wales taxpayers are carrying the cost of having that power station open for two more years as, as an insurance policy. Now, it’s hard to see what the alternative was, but what we sort of don’t want to get into the habit of is instead of having that as insurance policy, having that is something that we do all the time.
The point of an insurance policy is that you hardly ever use it. And hopefully, you never have to use it. So, it is really important, even if we don’t hit the exact number on that target by 2030, it is very important to get the pace to pick up both on building transmission and building renewable energy.
Kat Clay: Yeah, I think there’s a concern that we’ve raised previously, both you and Tony around the teething issues in that transitional period, because there’s a period of uncertainty. Obviously, politicians and the public don’t want their lights turning off and the power going out.
We don’t want increased blackouts. But if the pace of the renewables isn’t meeting up with future demand, that’s a concern on how we manage that. You know, you have talked a little bit as well about the role of gas in that transition as well. Is that something you wanted to talk about on this podcast in relation to the nuclear stuff?
Alison Reeve: I think the answer is the gas is going to be part of the mix in either scenario, right?
It doesn’t matter whether you’re going with the coalition’s plan or if you’re going with the plan that the government is pursuing, that gas will be there. And the reason that gas will be there is because it’s extremely flexible and because it has a fuel that’s potentially storable.
And what you need when you get a high level of renewables in the grid is generation that can switch on and off quickly in order to respond to how the renewables often switch on and on, which can be quite quickly because the wind dies down suddenly, or because the sun goes behind a cloud.
So that gas is always going to be there as having a role, but in both cases, it’s what’s called a peaking generator. So that means it’s only on for maybe one or two hours every day. And so, its overall utilisation is actually very low. And that means it doesn’t really have a big effect on the emissions in the electricity sector.
Kat Clay: Can I ask a question then, do you think that nuclear would be a more reliable source of energy in the case that we’ve got renewables that are reliant on weather conditions and say, say our gas is being diminished in the future, would you see nuclear filling that gap that gas currently fills?
Alison Reeve: I don’t know. So, it’s very hard for nuclear to play the same role as gas because nuclear power plants like to be on all the time. Like that, they just like to chug along in their happy place, you might say. And the thing about that is that that is not particularly compatible with A grid where you’ve got a lot of renewables, where the rest of the generation is going up and down and being quite peaky.
There has been some work done overseas to try and get nuclear to be more responsive. And there’s also an interaction that you can get between nuclear and storage that allows you to get some more flexibility out of the nuclear power plant. But when you’re talking about reliability, what you really want is flexibility and nuclear is not particularly good at that.
Kat Clay: One of the things as well that did strike me that Tony Wood had recently put into one of his articles about Dutton’s nuclear plan is that nuclear is kind of illegal in Australia. That’s the other uphill battle he’s facing. Did strike me as a little bit of a roadblock to his plan.
What kind of things would he have to change to get it across the line?
Alison Reeve: So, there’s a, there’s a couple of things that would need to change. First of all, there is federal legislation in the Environment Protection Biodiversity and Conservation Act, which doesn’t allow for nuclear power plants to be built in Australia.
Now you could take that out of that act. But then you would have the hurdle that the three largest states, Queensland, New South Wales and Victoria, also have bans on building nuclear power. So, you would need to persuade the states to lift those plans, or you would need to figure out a way to override those state bans.
It’s not enough just to take the bans away. You also have to put in place a regulatory regime so that people actually know under what circumstances and where they can build a nuclear power station. And there’s a lot of different things you would have to do there. So, for example, there’s nothing in our National Construction Code at the moment that tells you what standards you have to meet for the concrete shell on a nuclear power station.
So, you would have to come up with that. There’s no regulation for you know, we, we make a very small amount of nuclear waste in Australia at the moment. It’s basically medical waste and waste from scientific experiments. We do not have a regulatory regime that can cope with a large amount of waste.
We would have to build that regulatory regime. We would have to find somewhere to put that waste. And that has been an issue that has run into massive social license problems previously. Because a lot of communities don’t want nuclear waste in their backyards. There’s a lot of new laws that you would have to come up with, basically.
Just out of interest, I went and looked at the US Federal laws that govern nuclear power. It is literally a thousand pages of legislation. And that’s just at the federal level. You would also need the state governments to adjust their legislation because most of the things that govern what you can build and where are actually state laws, not federal laws.
I have heard some people who have a lot of experience in energy market regulation and so on, estimate that you would need at least eight years to build that regulatory framework before you could actually start building a nuclear power station because it would be a super complicated exercise.
Kat Clay: Can imagine, also, Peak Alison, that you went and read a thousand pages of
Alison Reeve: Oh no, I didn’t read it. I just checked how many pages there were.
Just out of interest, before I jumped into reading it, I thought I should check how many pages here, how many, how much of my time is it going to take.
Kat Clay: I think there’s like a serious question out of that, right, is actually taking a step back and saying, why is nuclear power banned in Australia?
Why was it banned in the first place?
Alison Reeve: That is actually a super interesting piece of history. Australia was the site of a lot of nuclear weapons tests in the 1950s and 60s, and those were done with a lot of secrecy. A lot of stuff came to light about those tests, about the fact that there had been nuclear fallout over a quite a large area of eastern Australia where people lived and that we hadn’t been told about that.
And that created a massive distrust of nuclear. This was also at the time in the 70s when nuclear accidents started to happen overseas with power stations, like, for example, Three Mile Island. And it was also the era where we were very worried about nuclear weapons. So, this is in the last 2 decades of the Cold War, where you’re in a bit of a nuclear arms race.
All of that meant that you had, you know, people just didn’t like nuclear for a whole lot of reasons because it felt super dangerous. So when the Environment Protection, Biodiversity and Conservation Act was passed by John Howard, that was why nuclear power, I think, was brought into that as a ban, because there was this public feeling that nuclear was not something that we would ever want in this country, either as nuclear weapons or as nuclear powered electricity.
So that’s kind of the history behind the ban. And the thing is that if you want to move to having nuclear as part of our mix, you have to do a lot of work to overcome and change those social attitudes and social attitudes are, they can be changed. But it does take a long time. I feel like no one who is advocating for nuclear at the moment is really doing the groundwork to bring The Australian community along and overcome, you know, that, that really deep-seated fear of nuclear and the dislike of it.
Kat Clay: I actually think that’s a very good point, Alison, because a lot of my knowledge of nuclear comes from popular culture and historical disasters. And, and the Chernobyl series on Netflix, right? Yeah, exactly. I’ve been trying to distance myself from those things to take an objective look at it.
But I’ve also, you know, watched the documentary on Three Mile Island and there are legitimate concerns raised from these things there’s a reason why, we have to have so much regulation about it, and also really seriously consider about that question of disposal agree that, for most people, there’s a big piece of communications work that needs to be done around talking about nuclear, how it’s changed since the 60s and 70s.
And also, can we get over that hurdle? Like, do people want nuclear?
Alison Reeve: Yeah, I think there’s another thing there too, is that the security environment has changed a lot since then as well. So, you know, one of the reasons, for example, that People worry about countries like Iran having nuclear power is because they’re not so worried about what happens with their electricity.
They’re worried about the fact that malicious non state actors might be able to get hold of nuclear material and use it for the purposes of terrorism. when you look at, things like what’s happening between Ukraine and Russia at the moment, one of the things that Russia is doing is lobbing missiles at the nuclear reactors to disrupt the power grid, but also because if they were to hit one and blow it up, that would have, Huge consequences for the people of Ukraine.
The sort of thing that wasn’t around in the 60s and 70s was, I think, this idea that nuclear can be weaponized by people who want to disrupt national security and safety. And I think that’s something that probably needs to come into the conversation here a bit as well.
Kat Clay: Just coming back to implementation of nuclear, like, can you tell us a little bit about, what it is like overseas?
Because obviously a lot of other countries use nuclear in their mix.
Alison Reeve: So, there are 32 countries worldwide that have nuclear power, and there are another three where there are nuclear reactors under construction. But across those 33, 32 countries, sorry, the industry is very concentrated.
So, half of the world’s nuclear power stations are located in the US, France, and China. when you look across those 32 countries, largely there were two factors that led people to make big investments into nuclear power. So, either they had atomic weapons, and they needed to have a civilian nuclear capability in order to create the workforce and work on the technology for those, or they had no other energy options.
So that’s the case in places like Korea and Japan, which have really small land areas and are really poorly endowed with natural resources. You know, they have no coal, they have no gas, and they don’t have the amount of land they would need to do renewables. The thing is that Australia doesn’t really fit into either of those groups, right?
We have some of the world’s best renewables, we have a lot of space in which we can exploit them. And so, it kind of makes more sense for us to play to that strength. The other thing that people often talk about with the experience with nuclear overseas is whether it leads to cheaper power. In the countries where you do have cheaper power coming from nuclear, that is largely because it is coming from very old nuclear power stations, where you’re not having to pay back the capital that you spent on it anymore.
The other thing that’s important to look at when it comes to cheaper power is where, what’s the actual, what’s the mix? Because there’s, there’s very few countries where, you know, 100 per cent of the country, or close to 100 per cent of energy is coming from nuclear. If you look deeper, what you often find, that it’s just as much the effect of hydro or gas that is keeping the electricity cheap.
There’s also some countries like Belgium which has 50 per cent of its new electricity coming from nuclear, and it’s also got the highest electricity costs in all of Europe. You know, and so there’s a lot of factors that go into how expensive your electricity is and the role of nuclear in the mix is only one of those factors.
Kat Clay: Yeah, and that’s one of the big questions I think coming out of this potential plan is, you know, and Australians are rightly concerned with energy prices and the cost of living. will energy bills go up, down or stay the same with nuclear in the mix?
Alison Reeve: I think that’s one of the really big unanswered questions from what the opposition has put forward so far is that we do have this concern about cost of living.
And we do have this concern about inflation and that’s kind of here and now, I’m sure cost of living will still be important to us in 2035, but you know, when you’re the energy minister, you sort of have to do two things, right? You have to deal with all the problems you have in front of you right now.
And you need to keep your eye on how technology is changing and what that’s going to mean for the sector. if you spend all of your time thinking about the technology changes and what things are going to look like in 2035 and 2040, you tend to miss the thing that is really important for the economy, which is what is happening in the energy system right now.
And how do we solve those problems? the thing about nuclear power in Australia is that it does nothing to solve the energy affordability problems that are in front of us right now. And it doesn’t do anything to solve the big problems that we’re facing right now. thing that is affecting both affordability and reliability, which is how we get replacement capacity into the market as fast as possible because the coal is leaving.
Kat Clay: On that note, I think it’s a good place to wrap up the podcast. I look forward to being in 2035 with my affordable mortgage, my affordable groceries, and my affordable electricity bills. But apart from that, if you would like to read more about our work on nuclear, our work on energy and renewables, please do find us on our website at grattan.edu.au. You can read all of our research and articles for free there. We are a not-for-profit organization, and we do rely on donations from people like you. I know you probably hear this message at the end of the podcast a lot, but it does help us keep the lights on and keep us producing our podcasts.
So please donate on our website. As always, please do take care and thanks so much for listening.