Are small-scale nuclear power reactors the key to dealing with the high cost of electricity in South Australia? Someone in the policy apparatus of Labor Premier Jay Weatherill seems to think so.
Adelaide’s Channel 7 splashed the story across its news reports on September 7: the nuclear power option was being officially explored!
“A top-level report clearly indicates small-scale reactors have been on the short-term radar,” the channel stated.
Installing “small-scale modulated nuclear generators” (the correct term is “modular”) was said to be among “30 business ideas to create competitive, reliable and secure delivery” of electricity to South Australian consumers. The “business ideas” were part of a government Energy Market Transition Plan leaked to the state Liberal opposition. According to Channel 7, investigating the potential of the nuclear plants was clearly identified as a “state development responsibility”.
With the Weatherill government pushing hard for South Australia to host the world’s largest high-level nuclear waste dump, it is hardly surprising that staffers — and their superiors — seem eager to go the whole hog and have the nukes too.
But there are problems with the scheme. None of the “small modular reactor” designs have ever been built, much less brought to the status of proven, costed commercial offerings. Achieving that is expected to take most of the next decade.
However the small reactors, with somewhere between 5% and 30% of the generating capacity of today’s power reactor models, are not small in terms of the dangers they pose. Nor is there particular reason to think that small nukes will ever be price-competitive with the clean, safe alternatives that exist for plugging supply gaps in South Australia’s renewables-heavy electricity output.
The proposal, though, needs to be seen in the wider South Australian energy picture — of a privatised, largely deregulated market dominated by a small group of business players devoted to corporate robbery.
Renewable energy and business brigands
In a state with little accessible coal, high electricity prices have been a burden South Australians have traditionally worn. However, the state has abundant sunlight and a first-rate wind resource. When operating, wind and solar produce electricity remarkably cheaply, so it is not surprising that South Australian residents have embraced renewables enthusiastically.
Now providing about 40% of local electricity output, renewables have alleviated the traditional “peakiness” of grid demand; on hot summer afternoons, countless air conditioners are now fed by rooftop solar. On cold winter evenings, the state’s numerous wind turbines are mostly turning strongly, providing competition to the gas-fired power that usually dominates supply.
The “peaks”, when fossil-energy companies are able to extract high prices for turning on gas-turbine generating plants to plug shortfalls are now fewer and smaller. Supply shortages can also be made up through drawing on two interconnectors that import energy from the Victorian grid.
Average wholesale electricity prices in South Australia have consequently fallen, and in recent years have mostly been in line with those in the eastern states.
Energy charges, though, have remained steep; price-gouging by supply companies has become a South Australian institution.
As detailed in a report commissioned by GetUp!, a tight cabal of electricity marketers has raised add-on retail charges from virtually nothing to 38% of the average bill since prices were deregulated in 2013.
Enter the gas retailers — in the case of AGL and Origin Energy, the same people who market electricity. During May and June this year the gas price charged to electricity generators rose steeply, as supplies in the national gas grid were redirected to meet increased demand from the three export liquefied gas plants in Queensland. Wholesale electricity prices in South Australia turned sharply upward.
From the first days of July, unusually cold weather set in throughout south-eastern Australia. Then for several weeks from July 5, the Heywood Interconnector between Victoria and South Australia was turned off for upgrading.
The sheep-fold was left to the wolves. Compared with $80 per megawatt-hour in July 2015, South Australian wholesale electricity prices in the first 23 days of July 2016 averaged $321 — wind power generation in the two periods was about the same.
At one spectacular point on July 12, the price of a megawatt-hour of electricity hit $14,000. As reported by energy commentator Giles Parkinson, exploitation by energy corporations of their market power added $170-$190 million to the cost of supply. South Australian Energy Minister Tom Koutsantonis was forced to plead with the generating firm Engie to restart its gas-fired Pelican Point plant, mothballed despite being among the newest and most efficient in the country.
In August, a study conducted for GetUp! by researcher Bruce Mountain concluded that about a third of the state’s generating capacity had been kept idle by its owners throughout the crisis. Meanwhile, energy users were gouged for scores of millions of dollars.
Renewables at fault?
For the Murdoch-owned Adelaide Advertiser, pathological in its hatred of anything faintly “green”, the cause of the crisis was too much renewable energy. Echoing the paper’s sentiments were leaders of the state Liberal Party.
“The massive rush into wind energy and alternative energy in South Australia, without ensuring the continuation of base load power, is the major problem that we’ve got here in South Australia,” opposition frontbencher Rob Lucas told ABC News in mid-July.
By contrast, Premier Weatherill has been relatively straightforward about the reasons for the state’s energy woes. On September 8, ABC News reported him as saying that current rules allowed private electricity companies to drive “prices higher by withholding supply”.
“A small number of energy suppliers in South Australia have too much power,” the premier argued.
In hopes of forcing a degree of competition on the state’s energy oligarchs, the government has now drawn up its Energy Market Transition Plan, announced on September 8. The plan centres on a move to put 75% of the government’s energy needs up for tender, with firms obliged to bid against one another for supply contracts.
Also proposed is $24 million in incentives for gas exploration, aimed especially at luring gas corporations burnt by the recent Victorian ban on fracking. And then, there are the small nuclear reactors.
Small nukes no answer
The shift by nuclear corporations to offering relatively small, modular (that is, factory-built) reactor designs has been a response to the shortcomings of today’s much larger models. Present-day reactors mostly have power outputs that start at about 1000 megawatts, roughly two-thirds of South Australia’s typical demand.
The large scale of these machines makes them unsuited to many potential buyers, and has been linked to long construction times, vast capital costs and, often, wild price overruns. Smaller nukes, the designers reason, could be simpler and cheaper. They could be made “load-following”, adjusting their output to demand.
With potential accidents smaller in scale, the evacuation zones surrounding the plants would not need to be so large. The reason existing nukes are so big, however, is to provide economies of scale and keep power costs down.
Factory assembly of smaller reactors might limit construction costs enough to make such models competitive. But for factories to be built, a guaranteed market has to appear first; estimates put the necessary order-book at 40-70 reactors.
Whether these orders will appear and whether the factories will be constructed, remains speculative. More ominously, the concern for cost-cutting may compromise the safety of the small-scale designs. Much of the reason for the high cost of today’s reactors is the need for elaborate, multiple safety provisions.
But just because small-scale nukes are smaller does not mean these safety features should be dispensed with.
What are the alternatives for South Australia? In the state’s north, the organisation Repower Port Augusta urges the building of solar thermal power plants with provision for energy storage. Unlike the case with small nuclear, several technologies of this type are at the demonstration-plant stage.
In the US, backers of the “NuScale” small reactor — often cited as the most prospective of the new designs — hope for an eventual cost of electricity from their machines of US$90 per megawatt-hour.
That is similar to the expected cost of solar power from the (vastly simpler) technology of NSW firm Solastor, demonstrated using an array of installations in the Chinese province of Jiangsu. Solastor’s technology uses 10–tonne blocks of graphite on 24-metre towers to store heat from arrays of mirrors for as long as a week.
Energy can be dispatched quickly to fill gaps in wind or solar-photovoltaic output. With renewable technologies like that in the offing, who needs nuclear?
And against such competition, who is going to build the factories needed if small modular reactors are ever to be an economic proposition?
Evidently, none of this has impinged on the techno-dumbos in the South Australian premier’s department. But perhaps the real point of raising the issue of small nukes was never to install such machines. Perhaps it was just another move to groom public opinion to accept the nuclear industry as safe and viable — as part of the broad effort to ram through the government’s nuclear waste dump scheme. This scheme is what the Labor cabinet, the Adelaide business establishment and the Advertiser are really out to promote.