First published in The West Australian, 20 September 2023.
Few things in our national dialogue are more bewildering than the ongoing nuclear energy conversation about the need to have a conversation about nuclear energy.
Australia has looked closely at nuclear energy over and over again. Newsflash: it doesn’t make sense in this country. It is the most expensive form of new energy generation. It is uninvestable and uninsurable. The inflexibility of nuclear is the opposite of what a 21st century energy system needs. And after more than 70 years the industry has been unable to resolve the grave and costly problem of waste storage.
In 2006, Ziggy Switkowski led an inquiry for the Howard government that concluded there was no case for nuclear power in Australia. During the 2019 Morrison government inquiry, Dr Switkowski observed that nuclear power had become even less viable in the interim. I was the deputy chair of that inquiry and the Coalition’s energy spokesperson Ted O’Brien was the chair.
Those with an insatiable appetite for nuclear conversation would have you believe the only objection to nuclear power is from those in thrall to hippy fears from the 1970s. In reality, the strongest argument against nuclear is cold hard economics.
Consider the situation of large projects in Finland, the UK, and France. The Olkiluoto 3 reactor in Finland was supposed to be connected to the grid in 2009 for €3 billion but was finally commissioned in 2023 after the cost more than tripled. The UK’s Hinkley C project started in 2016 at a cost of £19 billion with the intention of delivering electricity by 2023. Currently the grid connection is expected at the end of 2028 and the cost is £33 billion. Hinkley C depends on a government guaranteed 35-year indexed offtake agreement that is already set at twice the cost of wind power from the North Sea. Flamanville, the French project, was supposed to go online in 2012 but still isn’t operating 11 years later. Its cost has ballooned from €3.3 billion to €12.7 billion.
But wait, what about small modular reactors! What if we ignore all our well-established economic principles and assume that it will be magically cheaper to make lots of small reactors rather than a few large ones. First things first: commercial SMRs don’t exist. And all the evidence so far indicates that small nuclear is repeating the delays, eye-watering cost blowouts, and taxpayer dependence that are characteristic of large nuclear.
For some years, the poster child of the SMR world has been the NuScale project in Utah. Many in the Coalition have spoken glowingly about how NuScale will finally deliver the nuclear miracle on the basis of its fantastic paper claims.
During the 2019 Energy and Environment Committee inquiry, NuScale claimed it would deliver a 720MW plant of 12 linked SMRs that would be operational in 2024 for $8 billion. Fast forward to January 2023 and NuScale provided a market update acknowledging that capital costs have increased to $14 billion for a revised plant with only two-thirds the original generation capacity, now due to be operational in 2029. In other words, it will produce a third less power with a five-year delay at double the cost.
Less than a year ago, NuScale claimed it would deliver power for between US$41-65 MW/h. NuScale now admits that electricity generated will cost US$119 MW/h or $180 AUD per MW/h. The average spot price of energy in the National Electricity Market in 2019/20 ranged across the States from $56-84 per MW/h.
The Institute for Energy Economics and Financial Analysis has observed: “no one should fool themselves into believing this will be the last cost increase for the NuScale SMR.”
The recently floated idea that nuclear energy could be incorporated into the operation of the Brisbane Olympics in 2032 can only be sustained on a foundation of industrial and financial illiteracy.
Opposition energy minister Ted O’Brien has written that we need a civilian nuclear program as part of AUKUS. He knows that isn’t true. Some countries do justify maintaining a civilian nuclear power industry because of its relation to their nuclear weapons capability. Australia should have no interest in that kind of synergy.
There is nothing that better demonstrates the Coalition’s lack of fitness to be an alternative government than their inability to have a single energy proposition beyond their baseless and dangerous delusions of nuclear power.
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