Federation Chamber on 12/02/2020
COMMITTEES – Environment and Energy Committee – Report
Mr BURNS (Macnamara) – It’s good news for the people of Lyne that their member in this place is very happy to have a nuclear reactor in their electorate, and I look forward to him running community consultations with his community about where a nuclear reactor might go! This was a good inquiry. I want to thank the other committee members, including the member for Lyne and Acting Deputy Speaker Gillespie as well as, of course, the chair, the member for Fairfax, and the member for Fremantle, the deputy chair, as well as the member for Warringah and others. I want to thank the staff of the committee and everyone who made a submission to the inquiry.
It is true that in this country we have energy challenges. It is absolutely true that our energy market and our energy future are uncertain. We don’t have a national energy policy. We don’t have any indication or any clear ambition from the government about what they want the energy market to look like, or how they want energy to be generated in Australia. But on absolutely no indicators—on not one indicator—is nuclear energy the answer. Let’s start with the economics. Nuclear energy is very, very expensive—and I note the previous contribution from the member for Lyne, who said that nuclear energy has become safer, and it has—because all of the different safety features that need to be built into nuclear reactors are very, very expensive. The estimation for a nuclear reactor in Australia would be somewhere between $10 billion and $15 billion. That is for one. Imagine the renewable energy generation that you could supplement with $10 billion to $15 billion. No-one is saying that nuclear energy financially stacks up without government subsidies—huge government subsidies. The only example in the world, currently, where there are nuclear reactors being built for under $10 billion or $15 billion is in the UAE right now, being built by a South Korean firm. But there are massive cost blow-outs, there are massive delays, just like there are all around the world. The economics of this do not stack up.
The other thing is the time line. Nuclear reactors are very expensive. There are a lot of safety features that are required to manage the uranium levels. They take a long time to build. Ten to 15 years is the minimum time for us to be able to have a nuclear reactor in Australia, starting right now—and that is not using the technology that the recommendations by the government allowed: the old, large-scale generation III reactors that are currently in existence. And we are able to model best practice. But make no mistake: we would have to import scientists. We would have to import the intelligence and the capabilities in order to manage these nuclear reactors. We don’t have that in Australia. We do have very capable scientists at ANSTO, but we don’t have the capability to manage a large-scale nuclear reactor in Australia, and ANSTO in Lucas Heights were the ones who advised us of that—that we would need to significantly upgrade our nuclear capabilities in this country if we were to have a large-scale nuclear reactor.
All of the pro-nuclear submissions that came in to the inquiry started with one thing—that nuclear is a way of decarbonising the economy. And it is. It would be. It has significantly less carbon, as part of its process for energy generation, than coal, obviously, and fossil fuels. And it is comparable to renewable energy. But, for 10 to 15 years and $10 billion to $15 billion, it’s not really giving you much bang for your buck, if your aim is to decarbonise the economy. I think that, if the government is serious about decarbonising the economy, it should say so. It should set ambitious decarbonising targets; it should set ambitious climate targets—which it hasn’t done.
The government also should be setting energy policy that would outline how the energy market would look by the time that a nuclear reactor would be built. If we are saying that it’s going to take 15 years to build a nuclear reactor in Australia, what is our energy market going to look like in 15 years time? It’s going to be very different from how it is today. There is a range of new energy technology coming on. The Prime Minister likes to boast about the amount of renewables coming into this country and the amount of renewable generation. Our energy grid is changing. It is changing in Queensland very dramatically, for example. There is solar and small-scale energy generation happening in people’s homes. Yet the government wants us to commit to a technology that wouldn’t come on for 15 years, in the very best case, in an energy market that is uncertain and of which we don’t yet know what the energy composition is going to be. We don’t know what our energy grid is going to look like in 15 years, and yet the government wants us to commit to technology that will be a significant disruptor and exceptionally expensive in that time. It doesn’t make sense.
The other point to make is around small modular reactors, SMRs, which many members of the committee have liked to fantasise about on a number of occasions. I don’t know how to make it any clearer: small modular reactors do not exist yet. They may; at some stage, small modular reactors might be operating. There might be a factory somewhere in the United States pumping out little nuclear reactors that we can then purchase. But at this stage they don’t exist. The only major small modular reactor type operating right now outside of China and Russia on a commercial basis is being built by NuScale, which has just extended its finishing time line for its small modular reactor—or its small reactor, because it’s not modular yet—from 2026 to 2027. It has blown out. It is expensive. And it is not yet ready. So the government wants us to make energy investment decisions based on technology that doesn’t exist right now. The other thing to consider as part of that is that ANSTO, when we went there, gave the clearest advice they could, which was that Australia shouldn’t be the first to buy new technology. Small modular reactors may end up being a significant technology disruptor and a significant economic disruptor in the nuclear industry. They may, and I have an open mind about that. But they don’t exist right now. There is nowhere in the world that anyone can turn to and say, ‘There’s a factory there; you can order 15 of them, you’re going to reduce the cost because you’re buying 15 of them, and we’re going to pop them in 15 locations around the country.’ That doesn’t exist right now.
Perhaps, when small modular reactors are a thing, we can reassess this conversation. Perhaps, after we’ve seen these small modular reactors built by a company like NuScale and completed in 2027, being managed, being assessed via best practice standards, that would be the time—the responsible time, the smart time and the economic time—for Australia to assess this technology. Perhaps the early 2030s would be the time for Australia to assess when small modular reactors might be a viable alternative for Australia. Until that time, it is completely fanciful, it is living in fantasy land and it is economically irresponsible to be making decisions about expensive, potentially dangerous technologies that don’t have best practice standards and that simply don’t exist.
To sum up, we had a very collaborative inquiry. It was done in good spirits, and all of the members approached it in good faith. I did move, in the meeting—which is outlined in the minutes—that all of the government’s recommendations be scrapped because I think the government have the chronology completely wrong and they have made some significant assumptions, as I have outlined in this contribution today.