Twenty-five years ago, Australia banned nuclear energy generation at a Federal, State and Territory level. Partly because of this, Australia would be one of the last places you would invest in nuclear energy, notwithstanding our large uranium deposits.
Australia has no nuclear power industry, so it has multi-level legislative barriers and no social licence. It also has abundant land, sun, and wind (with a vibrant renewables industry) and no obvious need for nuclear power.
On top of all those impediments, renewable sources of power are already profoundly changing how our energy markets and infrastructure operate.
Rooftop solar often accounts for all electricity grid demand and more during the day. This means consumers can use their non-grid (or ‘behind the meter’) electricity for free.
Rooftop solar is expected to increase fourfold over the next 20 years. These changes create further impediments to costly, centralised, slow to build and ‘always on’ nuclear power. Try telling rooftop solar consumers that they’ll have to make way for nuclear power at who knows what cost.
The Clean Energy Council recently reported that renewable energy provided 39.4% of Australia’s total energy generation in 2023, up from just 17% as recently as 2017. Combined large and small-scale additional renewable capacity in Australia reached around 5.9 gigawatts (GW – ie a billion watts) in 2023.
Total investment in large-scale storage was $4.9 billion in 2023, up from $1.9 billion in 2022. Last month, Rio Tinto signed a landmark 25-year renewable energy purchase deal worth billions to power its alumina and aluminium facilities. The large-scale solar and wind farms are the largest of such projects ever financed in Australia.
According to the International Energy Agency, new solar installations globally were 420GW in 2023 and new wind 117GW. New nuclear fell to just 5.5GW.
On a per GW basis, barely 1% of the capital spent globally last year was on nuclear. These data make it abundantly clear that there is no ‘nuclear renaissance’. While many nations promised to invest more in nuclear at COP28 last year, we are yet to see this happen.
Looking at the four big nuclear plants recently completed or nearly finished in the US, UK, France and Finland, cost overruns averaged over 300%, with more bad news to come.
The builders either went bankrupt or were nationalised. Consumers, investors, and taxpayers will be paying for this for a generation. But cost is not the worst drawback.
The more serious problem is that radioactive nuclear waste is extremely toxic and gets air-brushed out of arguments in favour of going nuclear. All the focus is on zero carbon emissions as if the toxic waste didn’t exist. This is disingenuous at best.
Nuclear waste needs to be stored expensively and safely by experts for thousands of years; and longer. Given how things are going in the world (a ‘hot’ war in Europe; unprecedented middle East tensions and Trump Mark II), what confidence could we have in this being delivered?
The risks of storing nuclear waste are imponderable because of the time horizons involved – well beyond our brief Anthropocene era. It is the height of human folly to assume that we can manage these risks.
We have no idea what will happen when distant, future generations are involuntarily charged with looking after waste that they didn’t consent to nor benefit from and, critically, weren’t paid to look after.
Another catchy, but fallacious, argument against renewables revolves around ‘baseload power’. This is the old argument based around the fact that the sun doesn’t shine at night and therefore on-demand power is the only option.
The reality is that Australia is already rapidly moving towards flexible, dispatchable power because of the increasing contribution from rooftop solar and wind backed up by battery (and other storage technologies, including hydro).
Despite comments to the contrary, nuclear power cannot ‘firm up’ renewable power sources; only variable sources of power can do this: batteries; hydro or ‘gas peaking’ – things that can be switched on and off quickly.
This leads to the question of what we expect nuclear energy to do if and when it turns up in the 2040s. AGL’s CEO has already ruled out any nuclear plants being located on its former coal-fired power station sites citing the idea as potentially ‘de-railing’ investment in the energy transition.
If nuclear power does arrive in Australia, it will be an ugly duckling in every possible respect; too late; too costly; too toxic and unable to supply a 21st century power grid that will have moved to flexible power sources. Unlike the famous Danish children’s story, the nuclear duckling will never be recognised as a ‘swan’.
This is not to say that the transition to renewable energy is without challenges, costs, and the potential for delays. There are and will be obstacles, but we cannot afford to wait for nuclear energy while continuing to burn fossil fuels in the meantime.
The risk-free and low-cost renewable alternatives are already here and that is where the market has already decided to allocate its capital.
Jeremy Cooper is Director, Bennelong Funds Management; Chair, Carbon Advisory Board, Future Group; a former Deputy Chair of ASIC and chair of the 2009-10 Super System Review.
