Nuclear commission findings spell more trouble for wind and solar in Australia

The South Australian Royal Commission into the nuclear fuel cycle has conceded that nuclear power is not a viable alternative for Australia, but has urged authorities to consider it anyway – in what could have serious implications for the roll out of renewable energy across the country.

The commission delivered the results of its “tentative” findings on Monday, indicating that it supports the establishment of a nuclear waste facility in the state, the storing of spent nuclear fuel and the expansion of uranium mining.

On the subject of nuclear generation, the commission admitted that it wasn’t viable in South Australia in the foreseeable future (2030) – even with a significant carbon price and a sharp reduction in the cost of capital.

It conceded that Australia should only adopt “proven” new nuclear technologies such as “small modular reactors” and next generation “fast reactors” , but that these were some way off, and likely to be very costly.

But commission chairman Kevin Scarce wants the nuclear generation dream to continue. He admitted that while there were real risks in nuclear generation – and there are “no guarantees on its safety” – he doesn’t “think the positive side of nuclear power is being presented.”

Despite the findings of the commission on the high costs of nuclear, and its unsuitability to the South Australian market in particular, he wants nuclear energy to be part of the national consideration because of the challenges Australia faces in meeting its emissions abatement task.

In effect, he and the nuclear proponents are betting that Australia will fall short in its climate targets; and given the record of the Coalition government on climate policy – including the repeal of the carbon price, the slashing of the renewable energy target, the attack on key institutions and slow progress on energy efficiency – that is a fair bet.

And this is where the problems emerge for the renewables industry, and wind and solar in particular. Most major studies, despite the best efforts of the nuclear lobby, suggest the abatement tasks of Australia and the world can be met by a combination of renewables, such as wind and solar, and energy efficiency. Even the International Energy Agency suggests that nuclear would play a minor role in emissions reductions.

But in Australia there is no policy in place to ensure that Australia’s modest emissions reduction targets are met. The repeal of the carbon price and the stalling of renewable energy development has put Australia on a path to increase emissions to record levels and will likely not reach a peak before 2030.

The nuclear industry is essentially counting on failure on these tasks, and then having some sort of Marshall plan to allow for the extra expense of nuclear generation.

The potential implications for large-scale and small-scale wind and solar are clear. Already, large-scale wind and solar developments are at a standstill because of changes to government policy by the current Coalition government.

And there is clear support for nuclear within the Coalition. Senator Sean Edwards is a major proponent, and Energy minister Josh Frydenberg, as we noted on his appointment, is a long-term nuclear supporter, and said so again on Monday. And many in the Coalition hate wind energy in particular, and renewables in general, such as new deputy prime minister and Nationals leader Barnaby Joyce, as do many on the cross bench.

That suits the incumbent fossil fuel industry just fine. The major coal lobbies, the Minerals Council of Australia and the Energy Supply Association of Australia, which represents coal generators such as AGL Energy, Origin Energy and Energy Australia, among others, have expressed support for nuclear power, keen to see the continuation of a commodities-based economy and centralised power in the energy markets.

Privately, the energy generators think nuclear is an absurd option for Australia, because of its high costs, long lead times, the fact that no energy producer has the balance sheet to support such projects, because it would need subsidies that would dwarf those needed for renewables, and because Australia has such excellent wind, solar and other renewable resources.

But by tentatively supporting nuclear, and keeping the brakes on renewable energy, it means that billions of dollars of coal assets can remain profitable for longer, and the massive sunk investments in the grid can also be protected.

The established industry is being severely challenged by emerging decentralised energy technologies – solar, storage and smart controls – and the pro-nuclear lobby has run a deliberate campaign against wind and solar, arguing that they cannot power a modern economy.

These arguments have been given significant and uncritical air time in conservative mainstream media , but also in Fairfax newspapers and online publications such as New Matilda and InDaily.

The Royal Commission has chosen to run with some of those myths, which is disappointing, but not surprising given that one of the biggest proponents is a web-site operated by one of the commissioners, Professor Barry Brook. A paper co-authored by Brook is repeatedly cited in the commission’s report and by pro-nuclear submissions to the commission.

Among these myths, promoted by Scarce on Monday, is the need for more peaking gas and imports in South Australia because of the growth in wind and solar. Actually, as has been pointed out repeatedly, South Australia now uses less peaking gas and less imports from Victoria than before it produced a lot of wind and solar.

The document also says that solar PV has had a negligible impact on peak demand in South Australia. Actually, it has had a significant impact on peak demand, pushing the peak from late afternoon and into the evening and made it smaller, to the benefit of the network in heat waves. (see graph below and further explanation here.)

The royal commission document also says battery storage applications are not yet commercial. Actually, they are, and Ergon Energy has already rolled out dozens of 100kWh, utility-scale battery storage arrays, saying it reduces grid upgrade costs by one-third – with no subsidy.

And while the government’s own forecast has admitted that the cost of nuclear is going to be more than twice that of wind and solar by 2030, the commission is repeating the line of the nuclear advocates that “cost of technology” is not a fair comparison, and that cost should incorporate grid “integration” and back-up.

This is an old furphy. Again, it ignores the enormous cost of nuclear energy in both the need for extra transmission lines and in the need for back-up power in case a plant goes off-line. In the UK, National Grid, the grid operator, said back-up power for the new Hinkley plant, if it goes ahead, would cost $12 billion.

The nuclear industry is facing huge headwinds internationally, and the industry itself admits that it cannot succeed in “deregulated” markets that dominate western economies.

France, the poster country for the nuclear lobby, is facing a disaster over its new-generation reactors, which are running up to a decade late, and more than $10 billion over budget, in Finland and France.

The bill just to keep France’s ageing fleet in working order has now nearly doubled to more than $150 billion, and the value of the country’s flagship nuclear company, EdF, has plunged on the stock market and has been kicked out of the main index. One third of its reactors are now likely to be closed by 2025.

In the UK, Hinkley Point, the first nuclear reactor to be built in more than 20 years is facing yet more delays, despite the fact that proposed government subsidies – regarded as “insane” even by nuclear supporters themselves – have been promised.

Even with a “guaranteed” feed-in tariff starting at nearly $200/MWh and rising with inflation to more than $450/MWh 35 years later, the proponents – EdF and its Chinese state backers – are baulking because of the financial risks.

China, is also being hit by delays and cost overruns in new reactors and the government recently conceded that its emergence response standards in the rapidly growing sector were “not adequate”.

In the US, the first new reactors in a generation – at Vogtle in the US – are also running over budget and over time. Many reactors are uneconomic and are seeking new government subsidies to continue operations.

The South Australian Royal Commission final report is due in May, and the South Australian government will respond soon after.

It would be tempting to think that, regardless of its view into nuclear waste processes, the government of Labor Premier Jay Weatherill will press ahead with its goal of 100 per cent renewables.

Despite what nuclear boosters tell us about wind and solar, numerous reports, including by the Australian Energy Market Operator, the French government, and various think tanks, say 100% renewable energy based largely around wind and solar is perfectly feasible, and will likely even reduce costs.

As Peter Bradford, from the Vermont Law School and a former member of the US Nuclear Regulatory Commission, wrote recently: 

“Climate change, so urgent and so seemingly intractable, has become the last refuge of nuclear charlatans throughout the Western world. From well-meaning ideologues and editorial writers claiming that the unknowable is theirs to state with certainty, to paid advocates more skilled in pleasing and persuading government officials than furthering consumer and environmental well-being, prophetic arguments have swollen from a stream to a river and now merge with the Seine in Paris, threatening to submerge the world under a layer of nonsense rising as inexorably as the seas themselves.”

The likelihood is, however, that in Australia renewables will remain stalled, or much delayed.

The capital strike by large energy retailers will continue, networks will continue to push back against solar and storage by changing tariffs to protect their revenues, regulators will continue to put on blindfolds when asked to identify the benefits of distributed generation such as solar and storage, and the Coalition government will continue to drag its heels.

The chances of it looking at this report, noting the huge costs of nuclear, the timelines needed to address climate change and pressing the go button on renewables is remote. All of which means that Australia is heading for a train-crash in energy policy, where individual consumers will be tempted to take energy matters into their own hands.