Nuclear power and Australia’s culture wars

July 18, 2019
An anti-nuclear protest at Olympic Dam in South Australia in 2016.

Nuclear power is currently enjoying a flurry of interest in Australia. But those promoting nuclear power are almost exclusively from the far right of the political spectrum.

They include far-right politicians from the Coalition and One Nation; the Minerals Council of Australia (who lobby furiously for clean nuclear and clean coal) and the Business Council of Australia; radio shock jocks and the Murdoch media (especially The Australian); and the Institute of Public Affairs.

Beyond the far right, support for nuclear power in Australia has ebbed due to the Fukushima disaster, catastrophic cost overruns on reactor projects and the falling costs of renewables.

Dr Ziggy Switkowski used to be nuclear power’s head cheerleader in Australia. He led the John Howard Coalition government’s review of nuclear power in 2006. But Switkowski said last year that “the window for gigawatt-scale nuclear has closed” and that nuclear power is no longer cheaper than renewables, with costs rapidly shifting in favour of renewables.

Australian Institution of Engineers fellow Peter Farley wrote in RenewEconomy earlier this year: “As for nuclear the 2,200 MW [megawatts] Plant Vogtle [in the US] is costing US$25 billion plus financing costs, insurance and long term waste storage ... For the full cost of US$30 billion, we could build 7,000 MW of wind, 7,000 MW of tracking solar, 10,000 MW of rooftop solar, 5,000MW of pumped hydro and 5,000 MW of batteries...

“That is why nuclear is irrelevant in Australia. It has nothing to do with greenies, it's just about cost and reliability.”

In January, the Climate Council — comprising Australia's leading climate scientists and other policy experts — issued a policy statement concluding that nuclear power plants “are not appropriate for Australia — and probably never will be”.

The statement continued: “Nuclear power stations are highly controversial, can't be built under existing law in any Australian state or territory, are a more expensive source of power than renewable energy, and present significant challenges in terms of the storage and transport of nuclear waste, and use of water”.

Exponentially rising costs

The 2006 Switkowski report estimated the cost of electricity from new reactors at $40–65 per megawatt-hour (MWh). That is roughly one-quarter of current estimates.

Financial advice and asset management firm Lazard's November 2018 report on levelised costs of electricity gives these figures:

• New nuclear: $161‒271/MWh

• Wind: $42‒80/MWh

• Utility-scale solar: $52‒66/MWh

• Natural-gas combined-cycle: $59‒106/MWh

In 2009, Switkowski said the construction cost of a 1000 MW power reactor in Australia would be $4‒6 billion. That is about one-quarter of all the real-world experience over the past decade in western Europe (and Scandinavia) and North America, with cost estimates of reactors under construction ranging from $14‒24 billion.

The VC Summer project in South Carolina (two AP1000 reactors) was abandoned after the expenditure of at least $12.9 billion. The project was initially estimated to cost $14.1 billion; when it was abandoned, the estimate was about $36 billion.

Largely as a result of the VC Summer disaster, Westinghouse filed for bankruptcy and its parent company Toshiba almost went bankrupt as well.

The cost estimate for the Vogtle project in Georgia, US, (two AP1000 reactors) has doubled to $38.8‒43.2 billion and will rise further. The project has only survived because of multi-billion-dollar government bailouts.

In 2006, Westinghouse said it could build an AP1000 reactor for as little as $2 billion — that's 10 times lower than the current estimate for Vogtle.

In Britain, three of six proposed reactor projects have been abandoned (Moorside, Wylfa, Oldbury), two remain in limbo (Sizewell and Bradwell) and Hinkley Point C is at the early stages of construction.

The estimated combined cost of the two EPR reactors at Hinkley Point, including finance costs, is $48.7 billion (£26.7 billion ‒ the EU’s 2014 estimate of £24.5 billion plus a £2.2 billion increase announced in July 2017).

A decade ago, the estimated construction cost for one EPR reactor in Britain was almost seven times lower at $3.7 billion.

The British National Audit Office (NAO) estimates that taxpayer subsidies for Hinkley Point ‒ primarily in the form of a guaranteed payment of $169/MWh, indexed for inflation, for 35 years — will amount to $55 billion, while other credible estimates put the figure as high as $91 billion.

NAO said Hinkley Point is “a risky and expensive project with uncertain strategic and economic benefits" and the British Parliament’s Public Accounts Committee said it amounts to a “bad hand” and “the poorest consumers will be hit hardest”.

Hitachi abandoned the Wylfa project in Wales after the estimated cost of the twin-reactor project rose from $26.4 billion to $39.7 billion. Hitachi abandoned the project despite offers from the British government to take a one-third equity stake in the project; to consider providing all of the required debt financing; and to consider providing a guaranteed minimum payment per unit of electricity (expected to be about $137/MWh).

In France, one EPR reactor is under construction at Flamanville. It is seven years behind schedule and the estimated cost of $17.7 billion is more than three times the original estimate of $5.4 billion.

In Finland, one EPR reactor is under construction. It is 10 years behind schedule and the estimated cost of $13.8 billion is nearly three times the original $4.9 billion estimate. The $13.8 billion figure was Areva's estimate in 2012; true costs have undoubtedly risen.

Enter culture wars

The far right, however, will not let facts get in the way of its promotion of nuclear power.

NSW Coalition Deputy Premier John Barilaro claims, against all the evidence, that nuclear power would probably be the cheapest power source for the average household and is “guaranteed” to lower power bills.

Former Coalition prime minister Tony Abbott’s rationale for supporting nuclear power — and repealing Howard-era legislation banning nuclear power plants — is to “create a contest” with the unions, GetUp!, the Greens and Labor. Last year he said promoting nuclear power “would generate another fight with Labor and the green left”.

Abbott — and some others on the far right — would undoubtedly oppose nuclear power if Labor and the “green left” supported it and point to the $14‒24 billion price tags for new reactors in western Europe and North America.

Abbott seems to have forgotten the experience in Howard's last term as PM. Howard became a nuclear power enthusiast in 2005 and the issue was alive in the 2007 election contest.

Howard’s nuclear promotion did nothing to divide Labor. On the contrary, it divided the Coalition, with at least 22 Coalition candidates publicly distancing themselves from the government's policy during the election campaign. The policy of promoting nuclear power was seen to be a liability and it was ditched immediately after the election.

Those of us opposed to nuclear power can take some comfort in its increasing marginalisation to the far right. But there are far-right figures highly placed in the federal government and several state governments.

Right-wing National Party MPs are lobbying for a Senate inquiry and for a repeal of the legislation banning nuclear power. It has the sense of a political set-piece: the far right wins control of the numbers on a Senate inquiry and the government agrees with its pro-nuclear findings and repeals the legislation banning nuclear power.

But would PM Scott Morrison agree to repeal the ban given that there is no prospect of nuclear power being a viable option for Australia in the foreseeable future?

Surely that would be an own goal, providing ammunition to political opponents and opening up divisions within the Coalition.

[Dr Jim Green is the editor of the Nuclear Monitor newsletter and national nuclear campaigner with Friends of the Earth Australia.]

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