Australia and Nuclear Power

The potential role for nuclear power as part of Australia’s energy transition is frequently raised in both the media and as part of everyday conversation. My view is that nuclear will play no role for at least the next three decades and beyond that it will only be considered if there is a widespread consensus that

wind, solar and batteries have demonstrated an inability to meet Australia’s electricity requirements.

nuclear is seen as clearly the best option to support renewables and guarantee the supply of low cost, zero carbon electricity

Let’s explore this logic in a little more detail starting with a clear acknowledgement that nuclear power is a proven technology that, on a global basis, provides about 10% of all electricity and contributes over 25% of national generation in a range of mostly European countries. Furthermore, United Nations climate studies consistently reference nuclear power as a valid decarbonisation technology likely to play a role in the transition to a net carbon future.

Despite all these and other perfectly valid points in favour of nuclear power, raw politics means it will remain a last resort option in Australia and probably most other countries with no pre-existing nuclear capacity. The obvious massive political hurdle for nuclear power is the catastrophic implications of a major plant malfunction, accident or act of sabotage. This guarantees widespread and committed opposition. Arguments pointing to very low probabilities are more than countered by the unthinkable consequences. For the average Australian, nuclear power is politically toxic and renewables are widely popular. No amount of technical and engineering logic or sophistry will change this reality.

Australia, with huge tracts of available land and world class wind and particularly solar resources, has chosen to maximise renewable generation as its first step in the push toward net zero. On this decision the political classes are well aligned with the masses. Even if one accepts that the shortcomings of renewables are often understated, the recent cost reductions for renewables makes it reasonable for Australia to see how far it can go with wind and solar as a replacement for coal.

If the political lens meant that nuclear never really stood a chance of being in the first phase of decarbonisation what needs to happen for it to get a second look?

Firstly, the current wind, solar and batteries investment cycle needs to get to its logical conclusion. The National Energy Market (NEM), the grid supplying all states except Western Australia and Northern Territory, has published (1) a roadmap that relying on renewables to achieve 83% decarbonisation by 2030/31 and virtually complete decarbonisation by 2050. If this plan, shown in Figure 1 below, works as anticipated, renewables will have met expectations and Australia will not give nuclear a second thought.

The first prerequisite for nuclear power is, therefore, that projections like the current NEM plan fail. Failure, in the context of opening the door for nuclear, doesn’t mean the inevitable delays, cost overruns and local roadblocks, it needs to mean that 100% renewable power is shown to be irrevocably flawed either because of cost or an inability to guarantee reliable supply.

Figure 1 The current AEMO pathway for the NEM – lots of wind, solar and batteries and no nuclear

Building out the new generation of renewables, batteries and new distribution networks will not be cheap – capital cost estimates for a low carbon renewable based grid range from A$100 billion to A$500 billion. These are likely to be understated and will be in any case revised dozens of times in the next 20 years, especially if inflation rate remains about 5%.

Spiralling costs for renewables will get nuclear a bit more attention but nuclear, unfortunately, is currently unlikely to offer a low capital cost alternative. Two new reactors – Plant Vogtle Units 3 and 4 – are currently nearing completion in the US state of Georgia with a reported cost of US$14 billion/GW. Given that construction has taken 14 years (yes – that’s right, groundworks started in 2009) the likely cost if one was to start now is anyone’s guess especially as no-one should expect construction will be cheaper or quicker in Australia. Developing a nuclear power capability in Australia will be hard, slow and very expensive.

To briefly expand on the Vogtle cost comparison. Figure 1 shows a dispatchable capacity of 50 GW will be needed by 2050 – this only applies to the NEM so perhaps 60 GW on a national basis. For nuclear to provide a meaningful contribution at say, 12 GW, a Vogtle adjusted cost could easily exceed A$300 billion without factoring in design changes and cost blowouts. Things would need to change dramatically for nuclear to offer a cheaper alternative to renewables.

Figure 2 Units 3 and 4 at Plant Vogtle under construction.

Nuclear’s only realistic chance to change public opinion is if it becomes clear that wind, solar and batteries can’t guarantee a reliable electricity supply. Practically, this doesn’t necessarily mean rolling blackouts – though that would work. It more likely means power companies, regulators, mainstream political groups and the voting public gradually and perhaps grudgingly acknowledge that gas and coal plants need to remain on line to guarantee supply.

A reliable and secure electricity supply is fundamental for a functioning modern economy. If a renewable based strategy like that currently contemplated for the NEM can not meet the electricity demand of the nation’s homes, businesses and factories the voting public will look for alternatives. This alternative grid will still have a large proportion of renewables generating maybe 70 or 80% of the annual electricity output but it will also have a flexible, dispatchable capacity designed to fill the generation gaps when wind, solar and storage options can not meet demand. The justification of this hypothetical alternative grid will require at least a decade, after allowing time to prove the renewable option can’t be improved or optimised. Only then will the design and composition of the alternative grid get serious consideration.

If Australia gets to this point, does opposition to nuclear soften to the point that it is politically acceptable for governments of the day to present nuclear as a real option? My guess is that in the short term gas will be promoted as the most pragmatic source of backup generation. While gas is still a fossil fuel and will face opposition, gas fired power plants are cheap to build, reasonably cheap to run, very flexible in terms of ramping up and down as generation for wind and solar varies and have a carbon footprint half that of coal.

An alternative grid that includes a fleet of tightly regulated gas plants providing backup baseload generation won’t be zero carbon but 15 GW of gas running for 2 to 3 months of the year will produce less than 10% of the emissions of the 2005 coal based grid. In the short term a “close enough is good enough” judgement is likely to be palatable if the alternatives are blackouts or waiting 15 years for nuclear plants to be built.

This logic makes nuclear energy’s pathway very long and narrow. Renewables need to fail and gas adopted as the backup for short term expediency. The gas option is not, however, accepted as a long term option and governments feel a need to explore a longer term solution.

This gets us well past 2050 and who knows what technology options have been developed? Perhaps nuclear will be seen as cheaper, safer and easier to build than is currently the case. Alternatively carbon capture and storage may be a mainstream technology that can allow gas fired power to remain on line. Biofuels are another longer term option – liquid or gaseous hydrocarbons produced directly from captured atmospheric carbon dioxide or indirectly from organic fuel crops – there are theoretically zero carbon and could be used in conventional power plants to produce green electricity.

Nuclear therefore needs to compete against the popularity of renewables and perceptions of high risk, high cost and extended construction times. It is also competing against future new technologies and strategies that could provide low carbon baseload power. These combine to make it a very tough sell in Australia.

Existing nuclear plants (outside of Germany) are likely to not only stay on line but be given extended operating lives. New nuclear plants will also be built in coming decades – in countries without attractive wind and solar resources and especially where autocratic governments are less sensitive to public opinion and can streamline approval and permitting. This offers the potential for technical breakthroughs, reduced capital costs, improved safety and shooter construction times. While there would need to be some truly spectacular developments for nuclear to play a major role in Australia, if one is trying to forecast what might happen over a multi-decade timeframe anything is potentially possible. For the present, however, there is no role for nuclear in Australia and for this to change the low carbon energy landscape will need to look very different.