30 September 2019 (IEEFA Australia): As fossil fuels come under increasing pressure, the conversation on whether to install nuclear energy is heating up in Australia, with the New South Wales government today calling for a vote within three years.
As the UK’s latest foray into building nuclear power plant’s only too well demonstrates, massive cost blow-outs and extensive delays are par for the course. Hinkley Point C in Somerset could now cost more than £22bn and is running the risk of further delays.
IEEFA has identified that the construction of nuclear power plants globally has proven to be an ongoing financial disaster due to extraordinary cost and construction time blow-outs and the industry’s ongoing reliance on financial subsidies, as stated in a new submission to the Australian government inquiry into the prerequisites for nuclear energy in Australia.
IEEFA notes that instead of wasting time talking about installing expensive nuclear technology at some stage post 2030, governments should meet the energy needs of their populations today, at this crucial climate turning point.
There are four clear steps:
Tim Buckley, director of energy finance studies with the Institute for Energy Economics and Financial Analysis (IEEFA), says Australia needs to implement a domestic energy plan now, relying on safe renewable technologies already commercially proven, today.
“Nuclear is one of the most expensive sources of new energy generation,” says Buckley.
“Plants take ten to twenty years to plan and build, have a track record of seriously massive cost blow-outs, and continue to rely on huge taxpayer subsidies during their operation, all while having no end-of-life rehabilitation or waste disposal plan.
“In contrast, renewable energy technologies are escalating at an unprecedented rate, and their cost is on a massive ongoing deflationary trend, leaving nuclear technology well behind the 8-ball.”
The world is yet to see a single successful commercial deployment of small modular nuclear reactors (SMRs), and SMR proponents do not expect to make a commercial deployment at scale within the next decade, if at all.
IEEFA notes even if SMR technologies are eventually proven commercially viable overseas, Australia would need to rely on both imported technologies and technicians to meet the technical skillsets required.
The Australian’ government’s own agency – the Australian Energy Market Operator (AEMO) – has already put forward an excellent, widely endorsed, and cost effective plan to solve the Australia’s energy crisis right now, not through nuclear, but with grid upgrades, and the rapid deployment of renewables complemented by battery and pumped hydro firming capacities.
AEMO’s plan relies on commercially proven, low carbon emitting, fast-to-deploy technologies already being used in an unprecedented scale today to accelerate deployment of expanded interstate grid connectivity, behind-the-meter solutions and demand response management technologies.
“AEMO’s plan is an achievable roadmap for fixing Australia’s energy crisis at least cost to Australians, now and into the future,” says Buckley.
“It also enables us to deliver on our Paris commitments, a small ask considering the magnitude of response demanded of leaders from children recently demonstrating around the world.”
IEEFA concludes that although nuclear options might open up in future decades in Australia, without a sensible energy policy, nothing will happen this coming decade.
“The chorus of voices demanding government draft a national energy policy cannot get any louder,” says Buckley.
“Australia urgently needs to create certainty for energy users and investors alike, while ensuring we’re on the same playing field as the rest of the globe in the take-up of renewables.
“As one of the three largest fossil fuel exporters globally, Australia’s economy is especially vulnerable to other countries taking a lead in zero emission industries of the future.
“Rather than denying the science and hoping for delay, it is critical for Australia’s future economic prosperity that we prepare now for this inevitable technology driven transition.”
IEEFA’s submission highlights a number of overseas case studies showing nuclear power plants in the U.S., Finland and UK that have suffered extreme time and cost blowouts, while Japan’s disastrous Fukushima is wearing a US$200bn clean-up bill.
Today, Germany, France and the U.S. are moving away from nuclear as renewable energy with firming is the new least cost solution.
Deflation has been running in renewable energy and batteries at double digit annual rates for the last decade, and IEEFA confidently expects deflation to continue at 5-10% annually over the coming decade.
Further, wind and solar are without any of the environmental legacy issues of nuclear waste disposal, nor does this technology need for the massive financial capital subsidies that nuclear relies upon – in fact wind and solar are now largely subsidy free.
“Rather than relying on unproven claims of SMR and cold fusion commercial viability at some point in the distant future, IEEFA notes the government should focus on solving Australia’s energy system crisis now through a national energy policy and the deployment of available low cost renewable technologies, today.”
Media Contact: Kate Finlayson ([email protected]) +61 418 254 237
Author contact: Tim Buckley ([email protected])
About IEEFA: The Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. We have analysts situated in Indonesia, the Philippines, India, Hong Kong, the U.S., the UK, and Australia, who produce reports carefully reviewing the interaction between energy and financial markets, technology and climate risk. www.ieefa.org