Will Abbott flick the nuclear switch?

Could one of the sleepers to emerge from the Coalition’s review of the energy landscape be a reversal of nearly four decades of Australia turning its back on nuclear power?

A commitment to a new look at going down this road could be a real prospect, with public polling suggesting that the Australian community no longer has a shock/horror reaction to reactors.

We don’t have long to wait for the first draft of the energy white paper. A green paper has been promised in May and Industry Minister Ian Macfarlane has two major industry conference appearances in April (the Australian Petroleum Production and Exploration Association event in Perth next week and the Energy Networks Association event in Melbourne at the month’s end) to give some insight in to the federal government’s thinking.

The Grattan Institute is one of many making submissions to the white paper process. It calls for Australia to have a rethink about the possibility of including nuclear energy in the local generation mix.

The institute criticises the initial issues paper presented by the government for “spending very little time addressing the questions of the future mix in the light of plausible scenarios that could emerge when global and domestic policies address the challenge of climate change”.

It adds that developments in nuclear technology “may represent a path that should be at least open to consideration” given the uncertainties about carbon capture and storage being viable and the cost of other low emission generation.

A pointer to the public’s possible reaction to this step comes from South Australia, the greenest of the states, in pursuing wind and solar power. South Australia, of course, also hosts the largest resource of uranium on the planet, with a quarter of identified global resources.

The SA Chamber of Mines & Energy has just published the results of a survey of 1216 South Australians conducted through ReachTel. Forty-eight per cent of those surveyed support nuclear power in Australia versus less than a third opposing it, and a fifth sitting on the fence.

A key aspect of the poll, says the chamber, is the level of strong opinion. Twenty-nine per cent of respondents were strongly in favour of nuclear power versus 20 per cent who were strongly opposed.

The chamber also points to a wider survey of 12,000 South Australians by the local News Corp tabloid The Advertiser. It found that 58.6 per cent of respondents agreed that nuclear power should be allowed in the state.

The kooky side of the environmental equation will always react at full throttle to any such suggestions.

I live in the Hills district of Sydney, a bastion of conservatism, and well remember the greenie campaign in 2006-07 after John Howard had Ziggy Switkowski conduct a nuclear energy review. Local newspapers carried “risk of nuke plant on the Hawkesbury” stories.

The basis for the Abbott government at least considering nuclear energy can also be found in the Grattan Institute’s white paper submission.

It observes that it is well documented that the European energy system is not coping well with a combination of low growth in electricity demand and the mandated rise in supply from intermittent power sources.

Here, it notes, falling demand and the renewable energy target have already led to significant oversupply in generation capacity.

“Low wholesale prices may be a short-term benefit and a shift to lower emission energy supply is both desirable and needs to be accelerated in coming decades,” it says. “However, (there should also be) consideration of the current market structure and its capacity to continue to deliver reliable and affordable energy.”

Part of the reality of the east coast power market today is that we are not going to see development of any large power stations, nuclear or otherwise, in the next decade. In the eyes of some reactor proponents, this opens the way for one of the more recent global power technology breakthroughs, the advent of small modular reactors.

These units, the argument goes, are very well suited to Australian conditions. Strategically located, SMRs of 25 to 300 megawatts can enhance supply security and improve the overall resilience of the grid.

The case for SMRs also rests on their use being a much lower investment risk because of their lower capital costs, the relative speed with which they can be installed and the fact that their capacity can be readily increased, Lego-like, on an established site.

As for safety, proponents point to SMRs being used in submarines for 60 years.

A particular attraction for the nuclear fraternity is the argument that, if the Abbott government is prepared to go down the reactor road, SMRs could be in operation by around 2022, which is when some of the older east coast coal-burning plants are reaching red lines in their working lives.

Reading the 250 submissions to the white paper process, one of the recurring threads of argument is the need for governments to stop trying to pick winners in the carbon game.

In bed with the Greens, the Gillard government did this big time.

The Abbott government is being told that now is the time to flick the switch to “technology neutral,” opening the way for nuclear options.

Keith Orchison, director of consultancy Coolibah Pty Ltd, publisher of the This is Power blog and editor of OnPower newsletter, was chief executive of two national energy associations from 1980 to 2003. He was made a member of the Order of Australia in 2004 for services to the energy industry.