Opportunity and Cost
When trying to discuss the proven and potential contribution of nuclear energy, we face a hopscotch court of facile objections. One of them is opportunity cost. Invariably, the opportunity cost of investing in nuclear reactor projects instead of solar or wind or some other favoured energy source is asserted to be unacceptable. This article will demonstrate how this is purely circular reasoning.
The IPCC explicitly included nuclear energy as a climate-friendly option in 1990.
The mere possibility of commercial nuclear energy in Australia was banned in 1999 through the efforts of the Greens and the defunct Australian Democrats, without community consultation or debate. At nearly the same time the third of three new Canadian CANDU reactors, Wolsong-4, was connected to the South Korean grid, built in less than four years and costing roughly the equivalent of $3.5 billion AUD, including financing.
Let us imagine a recent past in which our most vocal political champions for climate action heeded the IPCC and helped the birth of Australia’s nuclear energy sector rather than aborting it. In this hypothetical, preparation for licensing followed by beginning of construction takes less than six years, as witnessed for the UAE. Experienced vendors and local suppliers plan and build four modern CANDU units modelled after the South Korean success at Wolsong. Total cost is about $14 billion AUD. A pair of such reactors represents a direct drop-in replacement for a brown coal plant such as Yallourn.
By 2013 they all operate with around 93% annual capacity factor (like Wolsong), requiring less than 400 tonnes of local Australian uranium, which is under 6% of what we export annually. They can meet baseload, or flexibly follow load. The potential hazards relating to this type of reactor are well-studied and no cause for alarm. The by-products are concentrated and contained.
But is this just nuclear instead of renewables? And so who takes responsibility for the fossil fuels burned in the years between deciding to build reactors and connecting them to the grid? These questions lead us to expose the critical motivated error in this opportunity cost reasoning, because only an advocate for excluding options — regardless of how proven they are — would think this way.
There’s nothing about this nuclear energy build which excludes a concurrent renewable energy target. Nothing.
By also adding renewable energy sources, as Australia has, the total low emissions share of 2016 electricity production in this hypothetical is almost 25%.
Now, if the $40 billion figure for renewable energy addition under the RET quoted by The Australian Council of Learned Academies is accurate, the additional cost of this nuclear capacity really looks like a reasonable one to replace coal combustion.
Why only four reactors? Because, as the above chart shows, in the time since the beginning of Australia’s RET in 2001, enough solar and wind was added to generate 20.4 billion kilowatt hours in 2016 according to the Department of Environment and Energy (yellow diamond), and this annual output would be matched by the four CANDU units. In the face of such excellent climate progress, there’d be no point in limiting it to four, of course.
This is no more than a hypothetical, the national emissions benefits imaginary. There was no nuclear built and no appetite for it, which raises another major, yet flawed objection: the social licence to operate.
The lack of a social license is mostly cited by folks who have no intention of helping to develop nor grant it, regardless of how vocal they may be regarding climate change. It’s very likely that they would reject it no matter how much popular support for modern nuclear energy can be built.
But if effective action on climate comes down to a popularity contest, we’ve probably already lost.
The flip side is that many such commentators have assumed a social license to misinform the public and perpetuate bad information and fear of nuclear technology. Exactly as with genetically modfied organisms, vaccination and climate change, among many other scientific subjects, the guidance of topical experts and the preponderance of bodies of evidence are at least worthy of unblinkered consideration, and of arguably far higher value than obstinate opposition, protest, and theatre, to both the democratic process as well as the improvement of community understanding.
The good news is we can still start now. Those CANDU reactors? China is going to build another two in Romania. They’re quoted at the equivalent of $5.5 billion AUD each, but capital costs are only one consideration. There are other options in the forms of small modular reactors already being proposed, and next generation designs making progress with overseas regulators, such as in Canada where the value of nuclear is officially endorsed. We know how to engage and consult the community, to build understanding and support. We start now — by removing our unconscionable prohibition — and at least one of the technologies in Australia’s energy transition might be a proven means of national decarbonisation.
