Saturday, December 30, 2006

Australia's nuclear future: Howard shifts ground.

As recently as last month the Prime Minister has said he would do nothing to hurt Australia's coal industry. Not any more.

It looks as if we are going to trade carbon and go nuclear.

Story and analysis below:

Prime Minister John Howard, until now a staunch supporter of the coal industry, has spoken of the need for Australia to cut its reliance on the present generation of coal-fired power stations as it moves to a nuclear future.

Claiming that nuclear power stations were safer than coal-fired stations the Prime Minister said yesterday that he would have no objection to having one built next to his own home in Sydney.

Asked whether he was serious, Mr Howard replied: "I am serious, quite serious. I wouldn't have any objection. None whatsoever."

Launching the final report of the Switkowski inquiry into nuclear energy Mr Howard said that Australians "clearly need to recognise that we can't go on using coal with the current level of greenhouse gas emissions and also make a contribution to climate change"...

As recently as last month the Prime Minister spoke of wanting to shield Australia's coal industry from the consequences of action to fight global warming saying it was "in Australia's national interest to play a part in reducing greenhouse-gas emissions, but in a way that doesn't damage our vital industries such as the coal industry".

The new stance came as the Prime Minister undertook to refer the Switkowski Report's findings on greenhouse gas emissions and the costs of different forms of power to his Emissions Trading Taskforce which is due to report in May 2007.

It heightens the likelihood that the Prime Minister will mid-next year endorse some form of emissions trading regime that imposes a financial penalty on the operators of Australia's existing coal-fired power stations in order to assist the development of new low-emission technologies including nuclear power.

Mr Howard warned that the changes would mean higher power prices. "If there are to be reductions in greenhouse gas emissions, power bills will over time go up. There's not much doubt about that, that's been said before and it ought to be acknowledged," he said.

He has asked his Industry Minister Ian Macfarlane to bring a submission to Cabinet early in the new year on ways in which the Government can quickly remove impediments to the development of nuclear power.

The Switkowski report foresees the development of 25 nuclear reactors along Australia's coast producing about one third of the nation's power when nuclear generation becomes cost competitive.

Mr Howard said that the government itself would not be building any of the reactors and it would not be choosing the sites. "I think they should be where it makes commercial sense, where environmentally it's reasonable and all the other factors that will be taken into account. But we won't be building nuclear power stations and none are going to be built in the immediate future," he said.

The Opposition Leader Mr Rudd said that the Prime Minister's stance would present voters with a clear choice at next year's election. "Either they can vote for Mr. Howard, and get 25 nuclear reactors in the country; or they can vote for us, and we'll not be having one bar of nuclear reactors for this country," he said.

Mr Howard also yesterday called on Australia's Labor state and territory leaders to remove any remaining restrictions on the mining and export of uranium. Those restrictions remain part of Labor's national policy platform.


Analysis


Standby for Australia’s first nuclear power plant. The foundation stone will most likely be laid in about ten years from now.

But the final report of the Switkowski inquiry released yesterday makes clear that for that to happen a number of supports have to be put in place.

First there needs to be a single national regulator for the nuclear industry, of the kind the High Court’s recent WorkChoices decision has made possible. It would help if there was bipartisan agreement about the rules for establishing plants that would give would-be generators the confidence to invest.

Then the cost disadvantage of nuclear power needs to vanish, or a mechanism needs to be put in place where the investors would have confidence that the disadvantage would vanish by the time they are ready to produce power. An emissions-trading scheme that penalised heavy emitters of carbon such as coal-fired power stations would do the trick.

It would not need to be a particularly onerous emissions trading scheme. Switkowski finds that even with Australia’s access to very cheap coal, nuclear power would be just 20 to 50 per cent more expensive.

By contrast a coal-fired station that captured and stored carbon to eliminate emissions would be around 150 per cent more expensive.

If a system of tradable carbon permits is introduced, even at a low price, it is likely to make nuclear power a more attractive option for replacing Australia’s existing carbon-belching power stations than new coal-fired stations with built-in carbon capture.

(It would also make high-capacity wind generation attractive. Its costs are in the same range as those of nuclear power.)

It is possible for the Prime Minister’s Emissions Trading Task Force to design a permit trading system that increases the costs of coal-fired generation slowly and predictably giving would-be nuclear generators (and renewables generators) the kind of certainty that they would need to make the heavy investments necessary to replace Australia’s coal-fired plants when their working lives expire.

That Task Force reports in May. It will lay out the road map to Australia’s nuclear future.

2 comments:

Joe Bloggs said...

Howard might shift his ground but he wont shift his residence!

Josef said...

Great analysis, I can see the path for nuclear energy slowly opening up in Oz. I'm still having trouble finding the links between the nuclear and coal industry - why isn't the coal industry fighting nuclear the same way they are fighting wind? I'm sure there is some overlap between the coal and nuclear industry, however is it that extensive that a partnership is feasible?

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