The Australian National University. Australians already pay for the political divide on energy policy, so throwing the questionable merits of nuclear into the election debate just ups the cost.Opinion Piece By Ken BaldwinTaxpayers have already paid a price for the political division over Australia’s energy future — and now the Coalition’s nuclear policy is effectively hitting their hip pocket even before voters get their say on whether it’s part of the nation’s energy transition.All Australians pay for the lack of a bipartisan approach to meeting national and global emissions targets. This is because uncertainty creates risk for investors and this risk adds a premium to the financing costs of energy megaprojects — a cost that has to be recouped.Throwing the Coalition’s nuclear plans into that mix just fuels the uncertainty even before analysis of which path is the cheaper, more appropriate or most timely for our energy transition.However, nuclear energy shouldn’t be prohibited by law as a potential part of Australia’s future energy mix. There are solid no-regrets arguments for lifting legislative bans on it to open up flexibility, especially as the final few percent of achieving a carbon-free energy system later in the 2040s will be expensive no matter which option is chosen.Where are we now?In the lead-up to the federal election, Australia again finds itself at a party-political crossroads in its response to climate change.Despite more than a decade of debate driven by political parties, we still have no unified approach on energy or reaching emissions targets. This election we still have to choose between two pathways to decarbonise Australia’s electricity sector.The Labor government is maintaining its target of 82 percent renewable electricity by 2030, even though the trajectory is under some strain. Renewable installations have plateaued, even if 2024 is expected to show a record 4.3GW of approved large-scale solar and wind projects and 3.2GW of small-scale rooftop solar installed.The reason for the slowdown is complex but is partly caused by connection difficulties for large-scale renewables and community pushback on transmission lines and wind and solar farms.The Coalition planThe Coalition has the same 2050 net-zero goal as Labor but has yet to provide interim targets.It has instead promised to include nuclear power as part of the energy mix, starting with two small modular reactors, which are typically under 300MW capacity, to come online in 2035 in South Australia and Western Australia.No commercial small modular reactors have been built in the Western world and the only examples are in China and Russia.If large-scale reactors are shown to be the better option, the Coalition plans for these to start producing electricity from 2037 in two locations in each of Queensland and New South Wales and one in Victoria.There are also doubts the Coalition’s nuclear timetable is achievable. International experience shows that recent construction times in the West far exceed a decade, although in countries like the United Arab Emirates with different regulatory and governance systems it’s under nine years.Leaving the options openHowever, before any nuclear power plant can be built, Australia first needs to create a plan and a regulatory system.That could take up to five years, including the time needed to establish the social licence.There is an argument that Australia should do this anyway and remove the existing legislated prohibition on nuclear energy, as favoured by opinion polls.That would allow Australia to be ready to adopt the nuclear option immediately if it makes sense in the future.Given five years to plan and create a regulatory framework, an optimistic build time of 10 years would mean that nuclear power would not be expected to start generating electricity in Australia for at least 15 years.Realistically, if the Coalition started a nuclear energy program after the 2025 election, nuclear power stations could not be expected to start producing electricity in Australia until the 2040s.This would be a problem for a Coalition government wanting to build nuclear plants to replace ageing coal-fired power stations on the same site.The Australian Energy Market Operator (AEMO) projects all coal-fired power stations will have retired by 2037 — 90 percent of them within a decade. Under this scenario, solar and wind will have replaced all coal-fired power stations well before 2040.And if the Coalition plans to subsidise coal plants to extend their life, then reaching the 2050 net-zero emissions target will become much harder.The emissions realitiesModelling by Frontier Economics for the Coalition uses the ‘Progressive Change’ scenario — one of three scenarios used by AEMO for Australia’s energy transition — which will take longer to decarbonise the electricity sector than the ‘Step Change’ scenario favoured by Labor.The result will be greater emissions for the planet. Recent modelling by the Climate Change Authority calculated that the Coalition nuclear plan would yield at least an additional two billion tonnes of emissions, consistent with a global pathway to 2.6 degrees warming and missing Australia’s 2030 Paris emissions reduction commitment (43 percent) by more than 5 percent.There are also doubts around the Coalition’s claims its plans are cheaper.The Frontier Economics modelling says yes, largely because of savings from delaying coal plant closures, the additional systems costs for renewables and the shorter lifetimes of wind and solar plants.The most recent CSIRO-AEMO GenCost annual report disagrees. It takes into account all the factors that Frontier Economics says makes nuclear cheaper — and still comes out with nuclear being twice as expensive as renewables, consistent with similar studies overseas.It also doesn’t include the government subsidies needed to encourage Australia’s ageing coal-fired power stations to limp along until the 2040s.Those coal-fired stations will have reluctant owners competing head-to-head with much cheaper renewables, particularly during the middle of the day when solar could literally eat both coal and nuclear’s lunch.The choice for voters therefore boils down to this: a continuation of our energy transition to cheaper renewables already underway to keep below 2 degrees; or an uncertain nuclear future from 2040 resulting in more emissions and default on our Paris targets.There is a way nuclear might be part of a future energy mix. No matter how the last few percent of the electricity system is decarbonised close to 2050, it will be very expensive.Nuclear, possibly small modular reactors, might become cost-competitive at that late stage in the transition to net-zero — only time will tell.Professor Ken Baldwin is an Emeritus Professor at The Australian National University, where he was the founding Director of the ANU Energy Change Institute.Professor Baldwin helped convene, on behalf of the Australian Academy of Science (AAS) and the Academy of Technological Sciences and Engineering (ATSE), a Chatham House rules workshop in Canberra on Wednesday, July 17, 2024, providing input to the CSIRO GenCost team on nuclear energy in Australia.He is chair of the Australian Council of Learned Academies Australian Energy Transition Research Plan, chair of the ACT Government Industry Advisory Board for the Energy Innovation Fund and a non-executive director of the Australian Hydrogen Research Network.Originally published under Creative Commons by 360info™.
