Nuclear Energy Prospects in Australia

(September 2007)

2006-07 Review

In December 2006 the report of the Prime Minster's expert taskforce considering nuclear power was released. It said nuclear power would be 20-50% more expensive than coal-fired power and (with renewables) it would only be competitive if "low to moderate" costs are imposed on carbon emissions (A$ 15-40 - US$ 12-30 - per tonne CO2). "Nuclear power is the least-cost low-emission technology that can provide base-load power" and has low life cycle impacts environmentally.

The Prime Minister said that in the context of meeting increased energy needs while reducing greenhouse gas emissions "if we are to have a sensible response we have to include nuclear power". "The report provides a thorough examination of all aspects of the nuclear fuel cycle and the possible role of nuclear power in generating electricity in Australia in the longer term. It provides a clear and comprehensive analysis of the facts surrounding the nuclear industry and debunks a number of myths. I am certain that the report will make a significant contribution to informing public debate on these issues."

The report said that the first nuclear plants could be running in 15 years, and looking beyond that, 25 reactors at coastal sites might be supplying one third of Australia's (doubled) electricity demand by 2050. Certainly "the challenge to contain and reduce greenhouse gas emissions would be considerably eased by investment in nuclear plants." "Emission reductions from nuclear power could reach 8 to 18%

In April 2007 the Prime Minister announced that the government would proceed to open the way for nuclear power in Australia by setting up a nuclear regulatory regime and removing any regulatory obstacles which might unreasonably stand in the way of building nuclear power plants. Australia would also apply to join the Generation IV International Forum, which is developing advanced reactor designs for deployment about 2025. The government would also take steps to remove impediments to uranium mining. "Policies or political platforms that seek to constrain the development of a safe and reliable Australian uranium industry - and which rule out the possibility of climate-friendly nuclear energy - are not really serious about addressing climate change in a practical way that does not strangle the Australian economy."

In June 2007 the emissions trading taskforce report proposed that Australia should move steadily to implement an emissions trading scheme by 2012. While Australia cannot afford to wait upon a global regime, its own should be devised so as to avoid the shortcomings of present schemes and also articulate internationally. Both emission reduction targets and carbon price would be low initially and ramp up. In endorsing the report the Prime Minister said that he would move to devise a trading scheme "more comprehensive, more rigorously grounded in economics and with better governance than anything in Europe" - and designed to appeal to developing nations. The cost increment on coal-fired power generation brought about by a carbon emission cost would be likely to make nuclear power competitive in Australia.

Any proposal for building nuclear power plants would need to be brought forward by generating companies. In the light of widespread shortage of fresh water, cooling would need to be by seawater, hence coastal sites would be required*. This gives rise to the possibility of cogeneration, using waste heat or surplus heat for desalination and production of potable water.

* A coal plant is normally sited on a coalfield (inland), so does use a lot of water for evaporative cooling towers. A nuclear plant can be anywhere, from the point of view of fuel supply. 

In September 2007 Australia was one of eleven countries joining the five founders in theGlobal Nuclear Energy Partnership (GNEP). Australia made it a condition that it is not obliged to accept any foreign nuclear wastes, and it reserved the right to enrich uranium in the future. In the lead up to this Australia and the USA finalized a joint action plan for civil nuclear energy cooperation including R&D and regulatory issues. In connection with GNEP, the USA and Japan will support Australia's bid for membership in the Generation IV International Forum (GIF), involving the development of safer and better nuclear reactors for deployment from about 2025.

Background

In 1953 the Australian Parliament passed the Atomic Energy Act, which established the Australian Atomic Energy Commission (AAEC). AAEC's functions included advising the Government on nuclear energy matters, and the Commission quickly decided that effective and informed advice could only be provided if there was underlying expertise directly available to it. Hence in 1955 it established a research establishment at Lucas Heights, near Sydney and began assembling a world class team of scientists and engineers. It also began construction of a materials testing reactor, HIFAR, which first achieved criticality and started up on Australia Day, 1958.

The AAEC's research program was initially very ambitious and included studies of two different power reactor systems, on the base of substantial multi-disciplinary research in the fields of physics, chemistry, materials science and engineering. Later, recognising Australia's potential as a source of uranium, AAEC also undertook an experimental research program in the enrichment of uranium.

The AAEC also initially convinced the Government that there would be benefits from the construction of a "lead" nuclear power station on Commonwealth land at Jervis Bay, south of Sydney. After competitive bids were obtained for it, a reshuffle of leadership in the Government led to a loss of interest in the proposal and the project was eventually abandoned in 1972.

In the late 1960s Victoria's State Electricity Commission undertook preliminary studies on building a large nuclear plant on French Island in Westernport. In 1969 the South Australian government proposed a nuclear power plant in SA to supply the Victorian grid. Earlier proposals were for a nuclear plant at Port Augusta, SA. Then in 1976 the SA government in submission to the Ranger Inquiry said nuclear power appeared inevitable for SA, perhaps by 2000.

In 1981, the National Energy Advisory Committee of the Libral Coalitio Government presented a report on the administrative and legal issues associated with any domestic nuclear power program. It recommended that "the commonwealth, state and Northern Territory governments should develop with minimum delay a legal framework using complementary legislation as appropriate for licensing and regulating health, safety and environmental and third party liability aspects."

In Australia the possibility of nuclear power is hindered in Victoria and NSW, by legislation enacted by previous governments. In Victoria the Nuclear Activities (Prohibitions) Act 1983 prohibits the construction or operation of any nuclear reactor, and consequential amendments to other Acts reinforce this. In NSW the Uranium Mining and Nuclear Facilities (Prohibitions) Act 1986 is similar. In 2007 the Queensland government enacted the Nuclear Facilities Prohibition Act 2006, which is similar (but allows uranium mining).

Electricity options

Coal provides about 78% of Australia's electricity. This also accounts for most of the 200 Mt/yr carbon dioxide emissions from electricity and heat production.

Australia is fortunate in having large easily-mined deposits of coal close to the major urban centres in the eastern mainland states. It has been possible to site the major power stations close to those coal deposits and thus eliminate much of the cost and inconvenience of moving large tonnages of a bulky material. Energy losses in electricity transmission are relatively low.

Western and South Australia have relatively less coal but plenty of gas and also lower demand for electricity. More than half of their electricity is derived from burning gas. Development of Tasmania's large hydro-electric resources has put off the day when it needs any large thermal power stations, but hydro potential is now almost fully utilised.

In the next 15 years or so Australia is likely to need to replace the oldest quarter of its thermal generating capacity, simply due to old age. This is at least 8000 MWe, practically all coal-fired. If it were replaced by gas-fired plant, there would be a reduction of about 25-30 million tonnes of CO₂ emissions per year. If it were replaced by say six nuclear reactors there would be a reduction of about 50 million tonnes of CO₂ emissions per year. Every 22 tonnes of uranium (26 t U₃O₈) used saves the emission of one million tonnes of CO₂ relative to coal.

In other parts of the world as well as Western and South Australia, there was a conspicuous "flight to gas" in the late 1990s while gas prices were low. Generating plant to utilise gas is relatively cheap and quickly built, and at the point of use, gas-fired electricity does cause only half the greenhouse emission of coal. It is clearly an option to utilise more gas for electricity in Australia Australia if low gas prices can be maintained many years ahead.

Moving to gas would be seen by some as a great step forward for the environment. Others would see it as a tragic waste of a valuable and versatile energy resource. Gas can be reticulated to homes and factories and burned there at much greater efficiency overall.

In January 2007 the Energy Supply Association of Australia (ESAA) completed a study on electricity supply options relative to CO2 emission constraints in meeting projected load in 2030. For a 67% increase in electricity load, greenhouse gas emission targets of 140%, 100% and 70% of 2000 levels were modeled, with three supply options: all credible technologies; without nuclear; and without both nuclear and fossil fuel (with carbon capture and storage). Constraining CO2 emissions would require nuclear contributing 20% of the power, with overall about 30% increase in costs, hence a need for costing carbon to cover this. ESAA concluded that "the widest possible range of generation technologies will be needed."

Economics and related factors

There is considerable scope for energy conservation. This is not so much in major industries where energy is a significant factor in their core business, but in other areas where energy is simply one cost among many and therefore not hitherto such a serious concern. The economic aspects of this are raised in the ACF report cited.

OECD data shows nuclear energy as generally cost competitive with coal-fired electricity and often with gas-fired generation in many countries and regions. Certainly major utilities in France, Japan, South Korea and elsewhere find it to be so. In Australia, it has long appeared that it would be at least 20% more expensive, due to the abundance and distribution of coal.

Nuclear plant is characterised by high capital cost (around US$ 1500-2000 per kilowatt) and low marginal operating costs (including fuel). The cost of electricity from gas-fired generation is very vulnerable to fuel price increase, that from nuclear is not.

The main factor which is now putting nuclear energy on the Australian agenda is the possibility of emissions trading or a carbon tax to assist the achievement of emission reduction targets for carbon dioxide. A modest carbon tax or equivalent emission trading value of $15 to $40 per tonne CO2 translates into 1.5 to 4 cents/kWh for electricity generated by black coal.

Electricity demand in Australia is increasing, and about ten percent of this goes into exports such as smelted aluminium. The main demand is for continuous, reliable electricity supply on a large scale.

Coal now provides 78% of Australian electricity and is by far the most abundant fossil fuel. The technology for burning it and converting energy to electricity is improving but it will always liberate carbon dioxide into the atmosphere, at about one tonne per megawatt-hour produced . Other wastes are, or can be contained and managed safely. There is some, though little, opportunity cost associated with coal use in that it can be made to supply synthetic oil or gas and it is used in relatively small quantities as a chemical feedstock in other ways. A large amount of black coal is also exported for electricity generation overseas.

Gas provides about 13% of Australia's electricity and is, for the time being, fairly abundant. When burned to produce electricity it gives rise to about half to three quarters of the global warming effect of coal overall. The variability relates to methane leakage to atmosphere, transport and CO₂ released from gas wells. However, there is considerable opportunity cost with gas, since it is a very valuable fuel which can be cheaply reticulated to point of use, and it is also a valuable chemical feedstock. While it may appropriately be used for peak load generating plant, there are major ethical considerations in squandering it for base-load electricity. Natural gas is also exported.

Uranium at present provides no energy in Australia but 16% of the world's electricity. It is abundant. When used for electricity generation it produces no greenhouse gases, but its other wastes are significant (some are chemically and radiologically hazardous) and are sometimes considered a major problem However, these wastes are contained and managed. In fact nuclear power is the only energy producing industry which takes full responsibility for all its wastes and fully costs this into the product. This itself gives rise to a negative perception, since the wastes are retained rather than being discharged into the environment and forgotten. Because many are stored in particular places, they are represented as an unsolved problem.

There is no opportunity cost associated with uranium use since (beyond a tiny amount as fuel for research reactors making radioisotopes), it has no other peaceful uses. The risks form any conceivable nuclear plant (advanced reactor type) in Australia would be even less than those from other Western plants operating worldwide since the 1960s, which have not caused any loss of life in over 12,000 reactor years of operation.

Sources & Bibliography
Dickson A. et al, Meeting Greenhouse Targets in Australia, ABARE Conference paper 94.34
Cawte A 1992, Atomic Australia, UNSW Press.
Alder, Keith, 1996, Australia's Uranium Opportunities, P.M.Alder, Sydney.
Hardy C. 1999, Atomic Rise and Fall - the AAEC 1953-87, Glen Haven Press.
PM & Cabinet 2006, Uranium Mining, Processing and Nuclear Energy - Opportunities for Australia? (Switowski report)