Good morning, ladies and gentlemen.
It’s a pleasure to be here and thank you for your time.
At the outset, I commend the Institute of Public Affairs and all its staff.
In particular, Executive Director, Scott Hargraves, Deputy Executive Directors, Daniel Wild and Deborah Henderson, and Chair of the IPA Board, Geoff Hone, for their leadership.
I also acknowledge John Roskam who led IPA with distinction for 17 years taking it from strength-to-strength.
The IPA’s outstanding research and public advocacy plays a critical role in contributing to our national policy discussion.
Yours is a think tank committed to the truth.
Indeed, the IPA constantly puts itself in the crosshairs because you fearlessly discuss difficult truths which can grate against the preferred narratives of the mainstream and social media zeitgeist.
Always wear the criticism you receive as a badge of honour.
Just as the preservation of freedom requires the courage to engage in the battle of ideas, the decay of democracy is prevented by debate and difference of opinion.
I’m sure we will delve into several topics during the Q&A.
But in my speech this morning, I will focus on the topic of energy.
Specifically, the cost for households and businesses – small and large – and why Australia must consider new nuclear technologies as part of the energy mix.
We are a resource rich country paying near the highest electricity prices in the world.
Energy is one of the most important policy discussions in our country right now.
And not just because power prices are skyrocketing for Australians.
But because the decisions government makes today will determine Australia’s energy future.
A future where we are either energy secure and self-reliant, or energy insecure and dependent on others.
Indeed, energy security has never been more interconnected with national security.
Resurgent authoritarian regimes and increasingly sophisticated cyber-attacks are sober reminders of the connection between energy and national security.
Now, there’s three energy goals we need to achieve as a nation:
Clean power, cost-effective power and consistent power.
But the Government’s current energy agenda elevates the goal of clean energy to the detriment of the other two.
Of course, we all understand the need to invest in the development of renewables and the important role they play in the energy mix.
After all, the energy breakthrough we all desire may come from any number of sources.
But the Government is not being technologically agnostic or objective.
On the contrary, its ‘renewables only’ mentality – its renewable zealotry – is putting our nation at risk.
As experts have pointed out, no other G20 nation is working towards an electricity grid nearly exclusively powered by intermittent flows of energy.
The Albanese Government is recklessly rushing to renewables and switching off the old system before the new one is ready.
When you turn off cost-effective and consistent sources of energy, your power bills go up.
And when renewables and their associated storage technologies and infrastructure are rolled-out on a mass scale, it is inevitable that costs will be passed onto consumers.
Last month, Transgrid’s Chief Executive, Brett Redman, spoke about the company’s plans to spend more than $16 billion to upgrade the east coast power grid.
He said that investment ‘will show up in future bills.’
Moreover, KPMG has estimated that new transmission costs will blowout by 40 per cent.
According to AEMO’s Integrated System Plan, capital expenditure on renewables and the transmission infrastructure to support them out to 2050 will be about $383 billion.
But engineer, Dr David Hayden Collins, says that when the replacement of panels and turbines are factored in, the cost is likely to be $1.3 trillion – five times greater than AEMO’s estimate.
With the path the Albanese Government has us on, we know Australians will pay more as more renewables are put into the system.
We hear too from the ‘renewables only’ campaigners that they are better for the environment.
Under the Government’s plans, by 2030, more than 58 million solar panels will need to be installed and almost 3,500 wind turbines built to reach our emission reduction targets.
By 2050, the plan includes carpeting our landscape with 28,000 kilometres of new transmission poles and wires – the equivalent of almost the entire coastline of mainland Australia – at a cost of more than $100 billion.
Putting aside the fact that a rollout on this scale is fanciful given the approvals required and the massive engineering feat, how on Earth is it environmentally friendly?
This question is one we need to pose more often to the ‘renewables only’ backers.
All these transmission lines and the sheer size of solar and wind farms constitute an enormous environmental footprint.
Dr Collins notes that the land area and associated environmental impacts of photovoltaic cells and solar and wind farms are ‘over a thousand times greater’ than a nuclear power station’s footprint.
He also says that turbine blades and batteries need to be replaced every 20 years.
And that they will simply end up as landfill because the blades are non-recyclable and it is not yet economically viable to recycle lithium batteries.
In addition to the environmental impact of renewables, there’s the scientific reality of their limitations.
They are not sufficiently technologically advanced to ensure affordable and reliable power.
They produce weak and intermittent flows of energy.
Engineer, Dr James Taylor, has said ‘you need five times more capacity with renewable energy than with a base load power plant.’
This is because a power plant runs comfortably at 65 to 80 per cent output, whereas renewables have an average output of 25 to 30 per cent due to the whims of the weather.
So whatever percentage of renewables are in the system – be it 50, 70 or 100 per cent – they need to be firmed-up.
The latest battery technology installed in Adelaide – at a cost of $180 million – lasts for just one hour.
Although, they proudly boast they can stretch it to two hours.
Experts have noted that about 50 to 70 per cent of a battery’s cost comes from the raw materials and energy used to manufacture them. Five years ago it was about 40 per cent.
The cost of these raw materials is going up, so batteries will likely remain too expensive to store the huge amount of energy needed to correct our unbalanced grid across hours, days and weeks.
Now, if the Government wants to stop coal-fired power and phase out gas-fired power, the only feasible and proven technology which can firm-up renewables and help us achieve the goals of clean, cost-effective and consistent power is next generation nuclear technologies which are safe and emit zero emissions.
Namely, Small Modular Reactors or ‘SMRs’.
And Microreactors or Micro Modular Reactors – ‘MMRs’ – which are also known as ‘nuclear batteries’.
A single SMR can power 300,000 homes.
A Microreactor could power a hospital, a factory, a mining site or a military base.
Chris Bowen has burrowed so deeply down the renewable rabbit hole that he refuses to consider these new nuclear technologies as part of the solution to our energy problems.
In the Energy Minister’s eyes, he sees nuclear and renewables as competitors.
Whereas we need to see them as companions.
These new nuclear technologies are factory-built, portable, scalable and can even be relocated.
New nuclear technologies can be plugged into existing grids and work immediately.
Dr Collins says they have a ‘100 per cent chance of working, without the need to rewire Australia.’
Nuclear engineering specialist, Associate Professor Tony Irwin, points out that a SMR is about 18 hectares and can fit on any coal-fired power station site – like Liddell, which is about 100 hectares.
We could convert or repurpose coal-fired plants and use the transmission connections which already exist on those sites.
It’s no wonder more than 50 countries are exploring or investing in new SMRs and nuclear batteries.
Consider these examples:
In the United States, the Department of Energy is investing billions into two advanced SMRs in Washington State and Wyoming – the latter replacing a coal-fired power station.
The American multinational company, Dow Chemical, is progressing with plans to install a cluster of SMRs at its facility in Louisiana to help de-carbonise its operations.
And the Tennessee Valley Authority – already a large nuclear power operator – will build a new power plant at its Clinch River site. They are only considering an SMR.
Proving that nuclear power is not a conservative political cause, Justin Trudeau has endorsed a plan which will see SMRs rolled-out across numerous Canadian provinces.
The first is being built in Darlington, Ontario.
My brilliant colleague and the Shadow Energy Minister, Ted O’Brien, visited the construction site in February.
The Canadians are also deploying the world’s first commercial microreactor at the Chalk River laboratories.
Across the Atlantic, the UK government is investing with enthusiasm in the Rolls-Royce SMR which they see as a major export opportunity.
President Macron has reversed France’s original plan to reduce its nuclear energy from 70 to 50 per cent.
Indeed, as part of a ‘nuclear renaissance’, France will build six new large reactors and shortly commence testing on a nuclear power plant in Flamanville which is set to open early next year.
France’s state-owned electricity company, EDF, has created a subsidiary to develop its Nuward SMR and is even bringing Italian partners into the fold.
There are members of the Greens party in Finland who have even become pro-nuclear.
Sweden, the country which led the renewable energy push, has jettisoned its plans for 100 per cent renewables by 2040.
In wanting cleaner electricity production and a stable energy system, its finance minister has said that ‘only a gas to nuclear pathway is viable to remain industrialised and competitive.’
In our own region, South Korea has halted earlier plans to phase out nuclear and is now committed to a ‘minimum nuclear threshold’ of 30 per cent.
It will build six new reactors by the early 2030s.
Moreover, companies like SK, Samsung and Hyundai are all developing new types of SMRs.
Prime Minister Kishida has expressed his intent for Japan to develop next generation nuclear technologies.
Meanwhile, 16 of its traditional reactors are undergoing a re-start approval process.
China has 23 reactors under construction and has connected its first SMR in Shandong province.
It’s worth mentioning that China is also planning to open around 100 new coal-fired power stations on top of the more than 1,000 already in operation.
On the flip side of the coin, let me give you some examples of an overreliance on renewables without firming.
2021 was one of the least windy periods in 60 years for the UK.
In September that year, wind farms generated just two per cent of power – down from 18 per cent the previous year.
Electricity costs were nearly seven times what they were in 2020.
To ensure reliable energy supply, the UK has increased its reliance on gas and coal and re-started mothballed plants.
As for California, in August and September last year, excessive heat saw its highly renewable reliant system put under enormous strain due to energy demands – especially for air-conditioning.
The energy operator asked residents to reduce electricity use between four and nine pm – the time when it said, ‘the grid is most stressed from higher demand and less solar energy’.
That might be ok in California, but it’s not my vision for this country.
And then there’s Germany.
Over the last two decades, it has invested heavily in- and built- many solar panels and wind turbines.
After Russia invaded Ukraine and cut off its gas supplies, the lack of firming power exposed the fragility of Germany’s overwhelmingly renewable-reliant system.
Supply went down. Prices went up. Families, business and industries suffered.
So, here’s the reality playing out across the world:
Countries are extending the life of older nuclear power plants, building new ones, and investing in the development of new nuclear technologies.
They’re doing this because they recognise the benefits of nuclear power in firming up their renewable energy systems.
Nuclear is the only proven, scalable, zero-emission energy source which is not weather dependent.
And yet here in Australia, our Energy Minister – mesmerized by the glare of solar panels and the rotating rotor blades of wind turbines – continues to ignore the nuclear energy developments in the world around him.
Chris Bowen and Anthony Albanese have completely disregarded the counsel of former ANSTO CEO, Dr Adi Paterson.
Dr Paterson wrote to the Prime Minister advising him that nuclear power will be essential for energy ‘reliability, robustness and resilience.’
Chris Bowen says that ‘nuclear is the most expensive form of energy.’
Yet he is relying on the CSIRO’s annual GenCost report which continues to use outdated figures from 2018 which, even at the time, were disputed by experts.
And if nuclear power is so prohibitively expensive, why are more than 50 countries investing in it, including those with smaller economies than Australia?
Conveniently, the Energy Minister is reluctant to mention the costs of storage and transmission when he talks about renewables being cheaper.
By way of a cost comparison, let me give you this example:
In Toronto, Canada, the energy grid contains about 60 per cent nuclear power.
As per a recent bill from a resident there, they pay 14 cents a kilowatt hour.
Compare that to a South Australian who has been paying 35 cents a kilowatt hour.
Due to the Albanese Government’s energy policies and price hikes which took effect on the 1st of July, that South Australian will soon be paying 47 cents a kilowatt hour.
That’s 235 per cent more than the resident of Toronto.
Tellingly, polls are showing that Australians are increasingly warming to nuclear power.
The IPA’s own poll in April 2022 showed a 53 per cent approval.
Younger Australians seem to be onboard given their awareness of new nuclear technologies, like SMRs and nuclear batteries.
Whereas some older Australians are somewhat more hesitant given their memories of older nuclear power plants.
But that’s like believing the latest Mercedes still uses 1965 technology.
Adjunct Professor Stephen Wilson has made several good points around nuclear waste.
He wrote that ‘nuclear waste’ is a misleading term.
A more accurate description is ‘used fuel’ because it ‘can be reprocessed and used again’.
Australia is, of course, home to the world’s largest deposits of uranium – one third of the world’s reserves.
The Minerals Council CEO, Tania Constable, notes that ‘by 2040, global demand for uranium will almost double.’
Uranium prices are also predicted to rise.
At present, Australia supplies just under 10 per cent of global demand, with all our production exported.
So aside from a burgeoning export opportunity, our nation has an ability to be energy self-sufficient well into the future.
Associate Professor Irwin says there are about 437 nuclear reactors worldwide which require about 62,000 tonnes of uranium ore to run.
In comparison, he says that 62,000 tonnes of coal would power the Bayswater coal-fired power station in the Hunter region for just two days.
As a dense energy source, uranium is more sustainable because you need less of it.
In contrast, Dr Collins points to a Finnish study which says that we simply can’t meet net zero emissions using only renewables.
There aren’t enough minerals to meet global demand for building renewables, even when accounting for new mineral discoveries.
Dr Collins makes another salient point:
He says eight of the top 10 solar panel manufacturers and 10 of the top 15 wind turbine companies are based in China.
So in the Albanese Government’s massive rollout of renewables, it is inevitable we will become heavily reliant on the Chinese market.
Not just in the near term, but in perpetuity – given solar panels and wind turbines have relatively short life cycles.
And there is no better example of the risk of overreliance on one market than what we saw with many European countries’ dependence on Russian gas.
There, things turned sour overnight.
In contrast, Australia would be sourcing SMRs and MMRs from the US, UK, France and other trusted partners.
At a time when we need to be promoting energy self-reliance and greater ‘friend-shoring’, the Albanese Government is doing the exact opposite with its energy policies.
Energy security is a primary reason why Australia must consider new nuclear technologies as part of the energy mix.
The Government has committed to building nuclear-powered submarines in Australia under AUKUS.
The submarines are essentially floating SMRs.
The most modern reactors in the submarines in operation today don’t need to be refuelled for 30 years.
And the sheer amount of money being invested in research and development in the next generation nuclear-powered submarines will surely see military advancements complement the development of civil nuclear power industries around the world.
With the ongoing development of zero emission, safe, small modular and micro reactors, the time has come for a sensible and sober conversation on nuclear power in Australia.
I say again, not as a competitor to renewables, but as a companion.
We need an energy mix to support the resilience of the system.
Nuclear power production was banned by Australian law in 1998.
President of the Australian Nuclear Association, Dr Joanne Lackenby, recently said, ‘there
are no technical, scientific or environmental reasons to ban nuclear energy.’
At the very least, I think the Government should consider working swiftly to alter the legislative prohibitions to SMRs and MMRs so we do not position Australia as a nuclear energy pariah.
And also we can better assess the merits of new nuclear technologies.
Adjunct Professor Wilson says we must ‘stop procrastinating’ and ‘prepare real options to deploy nuclear energy… in case we need them.’
Countries are queuing up to put in their orders.
Australia could have SMRs installed within a decade.
A civil nuclear power industry cannot be started up overnight, but it has already started with AUKUS.
We need to put in place laws and regulations, we need to develop our institutions, we need to train people, and much more besides.
Yet we wouldn’t be starting from scratch given the history and work of ANSTO, Lucas Heights and our safety regulator, ARPANSA, as well as the commitments Labor has made under AUKUS.
We are obliged to dispose of nuclear fuel and the reactors fuel themselves.
Ladies and gentlemen, the new nuclear technology train is pulling out of the station.
It’s a train Australia needs to jump aboard.
But guided by ideology instead of pragmatism, the Albanese Government is holding us back from catching the train.
I want an Australia where we can decarbonise and, at the same time, deliver cheaper, more reliable and lower emission electricity.
Families and businesses are hurting in Australia at the moment.
The Albanese experiment with the economy and energy is not working.
It is making life hard for Australians.
I want an energy policy which will help us value-add to an incredible mining industry.
Australia should be an energy powerhouse.
Instead, the Government is creating sovereign risk – as Japan and Korea have highlighted.
Resource companies are deploying capital investment away from Australia.
I want an Australia where we enhance resource sector investment.
And where we support, not punish, manufacturing.
It will take a Coalition government to end Labor’s energy myopia and firm-up Australia’s energy future in our national interest.