Nuclear war between super funds

The late Michael Mariotte commented on the IEA/OECD report: 'So, at best the Generation IV reactors are aiming to be as competitive as the current − and economically failing − Generation III reactors. And even realizing that inadequate goal will be 'challenging.' The report might as well have recommended to Generation IV developers not to bother.'

Technological neutrality?

A single reactor would be a 'relatively small investment', the ISA report states. But cost estimates for all reactors under construction in north America and western Europe range from A$14-24 billion.

The report authors offer the 'mathematical principle that a constrained solution to an optimality problem can never be better than an unconstrained solution' … and Australia's lack of nuclear capabilities is one such constraint. They further claim that Australia's lack of capacity to build or operate a nuclear plant 'exposes the economy to considerable risk'. Thus nuclear should be included in Australia's electricity mix. QED.

Those abstract arguments would be easier to swallow if not for the price-tag of A$14-24 billion per reactor.

The report continues: 'It is important that our discussion paper does not fall prey to hysteria on this point. Our suggestion is neutral between technologies. It is a simple matter of reducing risk by developing the capacity to choose the most appropriate combination of low carbon options.'

Again, that argument would be easier to swallow if not for the price-tag of A$14-24 billion per reactor. There's no discussion in the ISA report about the opportunity costs of going nuclear, neatly summarised by Peter Farley, a fellow of the Australian Institution of Engineers: 'As for nuclear the 2,200 MW Plant Vogtle is costing US$25 billion plus financing costs, insurance and long term waste storage. ... For the full cost of US$30 billion, we could build 7,000 MW of wind, 7,000 MW of tracking solar, 10,000 MW of rooftop solar, 5,000MW of pumped hydro and 5,000 MW of batteries. ... That is why nuclear is irrelevant in Australia. It has nothing to do with greenies, it's just about cost and reliability.'

The report discusses the plan for a twin-reactor nuclear plant at Wylfa in Wales, abandoned after the cost estimate increased from A$26.4 billion to A$39.7 billion. The project was abandoned by Hitachi, the ISA authors state, 'because it was required to carry too much risk relative to the size of the company.' But staggering British taxpayer subsidies were on offer for Hitachi to proceed with Wylfa. Business and Energy Secretary Greg Clark saidthe UK government offered a 'significant and generous package of potential support that goes beyond what any government has been willing to consider in the past' … which is really saying something since taxpayer subsidies for Hinkley Point are estimated at A$55-91 billion.

Evidently the ISA report authors believe that the subsidies on offer for Wylfa needed to be increased again and again until Hitachi finally agreed to go ahead with the project.

Sceptical responses

The New Daily, a publication of Industry Super Holdings, didn't buy the ISA's nuclear Kool-Aid. The New Daily article quotes Dr Ziggy Switkowski saying last year that 'the window for gigawatt-scale nuclear has closed' and that nuclear power is no longer cheaper than renewables, with costs rapidly shifting in favour of renewables.

The New Daily also quotes Andrew Richards, CEO of the Energy Users Association of Australia. Richards noted that it would take at least a decade to get a nuclear power plant up and running (20+ yearsaccording to economist Prof. John Quiggin) and that governments would need to support insurance, dismantling and disposal costs as the private sector won't take on those risks.