Does Australia need nuclear energy to reach net-zero by 2050?
Nuclear power generates 70% of energy in France, 30% in Sweden and 19% in the US. Policies aiming to phase out nuclear power in Japan and South Korea have recently been reversed while 19 countries have nuclear reactors under construction. In Australia, however, nuclear energy has been banned since 1998. Do we need to rethink nuclear?
Nuclear power generates 70% of energy in France, 30% in Sweden and 19% in the US. Policies aiming to phase out nuclear power in Japan and South Korea have recently been reversed while 19 countries have nuclear reactors under construction.
In Australia, however, nuclear energy has been banned since 1998. The prohibition was due to heightened anti-nuclear sentiments stemming from concerns about health and environmental risks after disasters like Chernobyl and decades of French nuclear testing in the Pacific, along with the availability and low direct costs of coal.
However, some are arguing that the nuclear energy prohibition should be reversed. In September, nine Coalition senators backed a bill to remove the ban, they argue that nuclear energy emits low greenhouse gases, requires less land than wind and solar, and while costly to build, provides an affordable and reliable source of energy to communities.
According to the CSIRO, Australia is the world’s 14th highest emitter of GHGs, and energy production is the largest contributor to Australia’s carbon emissions. To stop climate change and achieve net-zero emissions by 2050 Australian energy needs to decarbonise. The current decarbonisation plan is to increase renewable energy, but is this enough? Do we need to rethink nuclear?
Renewable energy is steadily increasing and in 2021 accounted for 29% of Australia’s total energy generation while fossil fuels contributed 71% (coal 51%, gas 18% and oil 2%). Earlier this year, the Australian Energy Market Operator (AEMO) published a 30-year roadmap forecasting Australia’s energy requirements and investment priorities to transition from fossil fuels to renewables. An estimated $420 billion of new investment is needed by 2050 to secure Australia’s energy supply while reducing emissions.
Nuclear energy is not in AEMO’s plan and leading climate and energy research organisations, the Climate Council and the Institute for Energy Economics and Financial Analysis, are adamant that Australia does not need nuclear power due to the viability of renewable technologies.
Renewables are the cheapest source of new electricity and from as early as 2025, there will be moments when the National Electricity Market (excludes WA and NT) has enough renewable energy to meet 100% of demand. While this is an extraordinary transformation, most renewables are intermittent and so firming technologies that store energy are needed to ensure renewables can meet Australia’s energy needs.
Nuclear plants are expensive to build and have long construction times of around 10-15 years, and so are unlikely to be online in timeframes needed to support the rapid transition away from fossil fuels which is already underway. As of mid-2022, 53 reactors are under construction globally, however according to the recent World Nuclear Industry Status Report nearly half are delayed.
Even if the current bill in parliament successfully reverses the moratorium, licencing and compliance with local state and territory laws will still be required and without extensive consultation are likely to result in lengthy delays from litigation and community opposition. While these challenges mean nuclear energy is unlikely to play a meaningful role in Australia’s energy mix, it will continue to play a role for other countries.
One of the benefits of nuclear energy is that it is energy dense and can produce energy with a small amount of nuclear fuel and waste. Uranium contains two to three million times the energy equivalent of oil or coal. According to World Nuclear Association, the waste from a reactor supplying a person’s electricity needs for a year is the size of a brick and only 5 grams of this is high-level waste. Nuclear energy production also does not result in air pollution, which is estimated to kill 4.5 million people a year.
Australia holds one-third of the world’s uranium with exports earning $500 million this year and is expected to increase to $880 million by 2023–24. The 411 nuclear reactors in operation are expected to increase alongside global energy demand which is expected to grow 80% by 2050. The International Energy Agency predicts that global nuclear energy output will double by 2050, contributing below 10% of total supply, while wind and solar are expected to account for 68% of global energy.
While increased demand offers some opportunities for exporters, stakeholder consultation is vital. One important aspect is the need for free, prior and informed consent (FPIC) from impacted First Nations peoples. The 2019 House of Representatives inquiry into nuclear energy spoke to Dwayne Coulthard from the South Australian Conservation Council who said, “A lot of these uranium deposits and a lot of the stuff that you find in uranium are very much associated with sacred stories and sacred sites…So any discussion about creating a nuclear energy reactor, small or large—it would obviously happen on Aboriginal land”.
In addition, while seemingly small, high-level nuclear waste is so toxic to life that it needs to be safely stored below ground and is estimated to remain toxic for up to 1 million years. Nuclear waste’s inconceivable lifespan poses a challenge to nuclear energy’s social licence to operate. A question remains over whether as an exporter of uranium Australia carries some responsibility to manage the waste.
If Australia were to build nuclear power or take some responsibility for storing wastes from exports, a permanent repository for high-level reactor waste would be needed, which also requires a commitment to monitor it and keep it secure from health and proliferation risks for 1,000s of generations.
Nuclear disasters loom large on the public psyche, but its safety record has been relatively good, with only a fraction of the deaths in its history of those attributed to fossil fuels in a single year. In decades past when renewable technologies were too costly and unreliable, increased use of nuclear energy could have played a meaningful role in slowing climate change and reducing premature deaths, however, evidence from AEMO to the IEA suggests that time has passed.
Whether domestically or globally, the role of nuclear is likely to be modest in the decades ahead and the national discussion on the risks and benefits has many years to run. The investment opportunities which may come from nuclear energy or uranium exports are likely to be proportionate to that modest role, while Australia’s vast potential for renewable energy and in the future green hydrogen exports and low carbon manufacturing offer historic opportunities. The sun may be setting on hopes for a nuclear energy era.
Originally published in November 2022 issue of SIAA Monthly, Stockbrokers and Investment Association.
Tech giants' investments in renewable power purchase agreements lead the way: Saving money while the sun shines (and the wind blows)
Information and communication technology giants are leading the private sector in the uptake of power purchase agreements and direct renewable investment. There is a strong business case behind their investments, which also contributes to their overall carbon emissions reduction plan
Cutting carbon: What the rush to divest fossil fuels means for emissions reduction and engagement
This report focuses on the decarbonisation of listed equity portfolios in Australia, outlining current investor initiatives and commitments to support decarbonisation and energy transition. The report discusses carbon exposure metrics, company engagement and divestment strategies, and investing in climate solutions.
Supercharged: Challenges and opportunities in global battery storage markets
This reports analyses trends in the global battery storage market. It identifies key drivers as well as key constraints and identifies areas for policy makers to support its development.