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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2011-02-10 Daily Xml
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NUCLEAR ENERGY

The Hon. R.B. SUCH (Fisher) (11:30): I move:

That this house, whilst acknowledging the potential for renewable energy sources in South Australia, also recognises that nuclear power is likely to be a base load energy source in the future, especially given technological advances in reactor design.

The point of this motion is to try and advance the debate in South Australia in regard to the possibility of using nuclear energy. I notice, even in the paper today, Annette Hurley suggesting that it is time to consider this issue, and I believe that former Labor prime minister, Bob Hawke, has also engaged in this debate, as have many others within and without the Labor Party, including an article this week by the Hon. Alexander Downer.

This motion is not about criticising alternative energy sources and renewables. I support that, but I am saying let us have an open mind about the potential and the possibility of having nuclear energy, particularly given that the technology involved in the nuclear industry is changing very rapidly. I make the point that whilst we do not have nuclear reactors in Australia, except for a small medical-based facility in Sydney, that is not the case around the world.

An article in the Australian Financial Review fromSeptember 2010 states that of 61 new reactors under construction in the world, 23 are in China, and India is gearing up likewise and so are others countries, such as Vietnam, Egypt, Saudi Arabia and even Indonesia. Australia is one of the few countries in the world, certainly one of the few top economies in the world, that does not have, and is not actively considering—certainly not in the public arena—a nuclear industry in terms of generating energy.

There are a lot of renewables, alternative sources: hydro, we are not strong on that in South Australia; geothermal, the potential is there; wave and tidal, I will not go into all the detail because I do not have the time; and wind energy, South Australia has something like 49 wind farms with a total of 962 operating turbines, and that may well have increased since I was given this information. We have the largest installed capacity in Australia, which represents 44 per cent of the nation's total wind generating capacity.

That is good, that is important, and that is useful, but I point out that in an article in The Australian on Monday, Annabel Hepworth made an interesting observation in relation to wind energy in South Australia. I do not know whether members read the article, but it was written during the recent heatwave in South Australia. She talks about 'last Monday', so it was the Monday of not this week, but of the previous week. The article states:

…4:30pm, extreme heat led electricity demand in the state to reach a record 3,399 megawatts;—

and this is the telling point—

of that, just 49MW was met with wind.

I also refer to her article where she quoted the Managing Director of the Australian Energy Market Operator, Mr Matt Zema, who said:

The wind farmers will get upset; they say, 'You are always quoting these numbers at the peak time', but that's the reality for us. I have to meet the peak assuming that there's hardly any wind there. Because otherwise you will have issues regarding security, reliability and so on.

Wind energy is fine as long as you have wind, but it is not suitable in terms of a guaranteed base load.

South Australia is facing a very serious situation in the next four or five years (starting then), if we do not get a significant increase in our base load capacity. So wind is fine, providing it is integrated into the grid and providing it is actually generating energy. As we have heard, on that peak demand the other day—10 days ago or so—wind energy in South Australia only contributed 49 megawatts out of 3,399 megawatts. So, you would not be running too much in the way of electrical appliances or otherwise on the basis of that.

Now that in itself does not automatically mean that you need to go to nuclear. Obviously there are arguments about the economics. We have some natural gas options and there are some other possibilities that I have outlined before. What I am saying is that we need to look at the nuclear option.

I was interested in a report relating to the possibility of using nuclear energy, for example, at Roxby Downs. Some of us visited that area a year or so ago with the Social Development Committee, and the irony of their exporting uranium ore when they basically need significant energy themselves was pointed out. I think it was something like a drum or two of yellow cake would power the new Roxby facility for quite a long period.

I refer to an article by Terry Krieg. He is a member of the Australian Nuclear Forum, so obviously he is not impartial to this issue, but he does make the point in an article in The Adelaide Review of September of last year, as follows:

The fourth step would be for BHP Billiton to build its own nuclear reactor to provide the power needs of the expanded Olympic Dam mine and the town of Roxby Downs with excess power fed into the grid. This negates the 275Kv gas fired power line from Port Augusta to Olympic Dam. The South African designed Pebble Bed Modular Reactor (PBMR) could be used. PBMRs are small 165 MW units which can be established, on site, where the power is needed. They are gas cooled using helium so no water is needed for cooling. Being modular, additional units can be added as needed and they are cheap and quick to build, requiring about two years for construction.

When people think about nuclear energy, they often think about giant plants, but I am reminded of something that Sir Eric Neale told me when he visited Scotland regarding the nuclear submarines that are housed there. Focussing on the safety aspect, he said that they were within 100 metres or so of the residential area. People often say that they are not safe or they are a threat and so on. He said that submarines had been based within a short distance of residential properties for many, many years, with no indication of any problems whatsoever. The other point from that article by Terry Krieg is that they do not have to be giant plants, necessarily. There could be a possibility of using one of the smaller plants up at Roxby.

So, we have a situation where I think it is time to put aside the prejudice of the past and look at the nuclear option. It is not going to happen tomorrow. It is probably not economically advantageous tomorrow but, down the track, we will, I believe, have to look at it for environmental as well as other reasons.

I mention technological advances in the motion. Clearly, I am not a nuclear physicist, but what I understand is that they are now working on what are called 'Generation IV' designs that are not likely to be operational until 2020. There are 13 countries which form the Generation IV International Forum (GIF). They are developing new technologies that are clean, safe and cost effective, meeting increased energy demands on a sustainable basis while being resistant to diversion of materials for weapons proliferation and secure from terrorist attacks.

The six technologies they are looking at—the gas-cooled fast reactor, the very high temperature reactor, the super critical water-cooled reactor, the sodium-cooled fast reactor, the lead-cooled fast reactor and the molten salt reactor—were selected because they are clean and safe. Most of them employ a closed fuel cycle to maximise the resource base and minimise high-level waste. They utilise uranium efficiently. Many can use depleted uranium or spent fuel from current reactors and use about 99.8 per cent of the energy, unlike their predecessors—the current ones—which use less than 1 per cent of the energy.

They have a clear cost advantage and they carry a financial risk no greater than other forms of energy generation. We are talking about something that is being developed, and that is why I think we need to keep an open mind about the possibility. These Generation IV reactors, as I said, can actually reduce the waste issue. They can also reduce the terrorism threat issue, because they can burn not just uranium but also plutonium and other forms of spent fuel.

So, there is great potential there that is currently being worked on. It is not low-level research; it is high level. These reactors can also use thorium, a lower grade radioactive substance which is three times more abundant than uranium, and Australia has the world's largest supply.

The point I want to make is that we have been heavy users of fossil fuels in the past—oil and gas—and we are using quite a bit of natural gas currently to power some of our energy-producing facilities. We are still using pretty dirty brown coal at Port Augusta, but we need to think outside the square.

I realise the Premier comes from a background where he was hostile to French nuclear testing in the Pacific many years ago, but the world has changed. We have to move on. We have to be realistic for environmental reasons, CO2 reasons. Importantly, at the moment, there is no obvious indication of anyone providing any base load generation. What we are getting are some companies prepared to put in peak load when they can cream off from the community at times of drastic power consumption. However, for a growing economy, we need a guaranteed base load supply.

I challenge anyone in here—I would like to hear from the minister—to tell me where South Australia is going to get its guaranteed base load in four years' time. It takes a long time to build conventional power stations. I see no evidence whatsoever of anyone building one or planning to build one in South Australia. I do not see any evidence of people planning to build new stations interstate.

There is uncertainty because of the debate over a carbon price. So we are left literally swinging in the breeze, and people should not only worry about the price they are going to pay for electricity but they ought to worry more about the availability. The old saying is 'the last one out switch out the light', but in a few years' time it might be a case that the light is already out.

I make a prediction now: if either of the major parties cannot deal with this issue coming up to the next election, whichever one is seen as not being able to deal with the issue of electricity price and supply will get slaughtered at the election. It will be in conjunction with a concern about the price and supply of water, despite the recent floods and the Murray flowing again. Those two issues I think will be like a pincer movement against whichever major party cannot guarantee a supply of adequate power into the near future.

It might seem a radical thing to suggest but I might see the resurrection of Sir Thomas Playford, and we might see a situation where a government has to commit to a base load station itself. One way or another, it should either build it itself or assist the private sector to do it. I notice in New South Wales that premier Keneally is giving people additional home subsidies for electricity because the price is escalating and she is trying to save her 'base load' by giving households a donation.

We are facing a critical situation. I am saying we should keep an open mind and get this debate going in a sensible, rational way and move away from the traditional Luddite approach which rejects modern technology because, without it, unless you want to sit in a cave with a candle, we need additional base load.

The Hon. S.W. KEY (Ashford) (11:46): I rise to oppose this motion. Certainly the member for Fisher's speech supports his views but I think it is important that we also look at the reality of having nuclear power as a base load energy source in South Australia. I understand that the South Australian government is keen for commercially viable and environmentally sound energy developments to proceed so as to guarantee a reliable energy supply and competitive energy costs, and we know that this is particularly important in establishing long-term viability of electricity sources.

Nuclear power is not currently commercially viable technology for Australia, particularly South Australia, and South Australia, I am advised, has a very peaky electricity demand profile with an overnight load of approximately 1,000 megawatts, an average load of approximately 1500 megawatts and a peak load of approximately 3,000 megawatts. Many studies have shown nuclear power to be amongst the more expensive greenhouse reduction measures, as nuclear reactors are traditionally more expensive to build than traditional energy sources and have significant environmental and cost issues associated with long-term storage and management of high level nuclear waste. The economics of nuclear power do not add up—at this stage, anyway.

It is true to say that many Labor politicians, particularly in the federal arena, do support the nuclear industry and are very keen for this to be an option for us. I am not one of those people—I am not in the federal arena, but I am certainly not one of those who supports that argument.

As I see it, there are a few political and legal realities. First, nuclear plants are not permitted under the commonwealth Environment Protection and Biodiversity Conservation Act 1999 and, in fact, section 140A prohibits the construction of a nuclear power plant, a nuclear fuel fabrication plant, an enrichment plant or a reprocessing facility. These are controlled actions under the EPBC Act and the commonwealth minister for the environment is not allowed to approve them. Interestingly, this provision was introduced by the Howard government.

Also, at the commonwealth level, the commonwealth Radioactive Waste Management Act 2005, introduced by the Howard government to allow the construction in Australia of nuclear waste storage facilities, specifically prohibits the storage of high level nuclear waste, including spent nuclear fuel. The federal government's proposed replacement of that act (which I understand may be debated at any time in the Senate) will not alter this position, as I understand it. Both the Coalition and the ALP at a federal level have legislated to ban the storage of spent nuclear fuels; and you cannot operate a nuclear power plant without a facility somewhere in Australia to store spent nuclear fuel.

Secondly, under the South Australian legislation, the Nuclear Waste Storage Facility Prohibition Act 2000 (and many of us will remember the debate surrounding that particular act), the import, transport, storage and disposal of nuclear waste, including spent nuclear fuel, are prohibited. That legislation was introduced by the Olsen Liberal government in 2000; and, I am pleased to say, strengthened by the Rann Labor government in 2002. This act effectively prohibits the operation of a nuclear power plant in South Australia because the plant must store its spent fuel rods in cooling ponds on site.

Thirdly, the establishment of a nuclear power plant anywhere in Australia would require there to be national bipartisan support. This would be particularly interesting considering the make-up of the federal parliament at the moment. This was acknowledged by the Chair of the Howard government's Uranium Mining Processing and Nuclear Energy Review, Mr Ziggy Switkowski, and by the former federal Liberal leaders Dr Brendan Nelson and Malcolm Turnbull.

The current federal Liberal leader, Tony Abbott, declared in 2009 that he would not support nuclear power generation because it was economically unviable. In 2010, he said, 'The Liberal Party will not be proposing nuclear power as a policy in the forthcoming election.' That election has since passed. In reality, there will not be in Australia the necessary bipartisan support, I believe, to make this happen. This has been proved by the actions of successive governments—Liberal and Labor, federal and state—in legislating to prohibit nuclear power stations and to prohibit the storage of high-level waste.

That is just my overview with regard to the politics of nuclear power. I think, then, what we really need to do is to look at the economics. I am advised that the minimum size required for a commercial nuclear power plant to run efficiently (and this may or may not take into consideration the new mini-nuclear power plants that Dr Such was talking about) and as cost-effectively as possible, there needs to be 1,000 megawatts as a base load; that is, 1,000 megawatts needs to be available all the time.

The fundamental problem in supporting nuclear power in South Australia is that the overnight electricity demand in South Australia is under 1,100 megawatts. The first thing you have to do is to request practically all other electricity producers not to generate electricity overnight, which means you have to put everyone out of business who is currently selling electricity overnight. This is the advice that I have received. Like Dr Such, I am not professing to be an expert in this area, but, certainly, from conversations and briefings that I have had it means that this would make for some really big problems in the energy industry in South Australia.

I also need to mention the construction costs. I am told that the most recent indication is that the likely costs of constructing a nuclear plant come from the USA where, in February last year, President Obama approved a $US8.33 billion guarantee for the construction of two nuclear power plants in Georgia. The construction cost of these two plants has been estimated between $US14 billion to $US16 billion. On the present exchange rates (although the dollar is looking a little better at the moment), we are talking about billions of dollars to set up one plant—a minimum, probably, of about $6 billion.

International experience shows that nuclear power plants are never built without major financial contributions from the host government, by grants, guarantees or both. Realistically, there is no prospect (nor would there be, I imagine) of the South Australian government being able to contribute the huge sums of money that would be required to allow the construction of nuclear power plants in this state. I think we really do need to look at the costs and see whether they match up. I would like to take this opportunity to acknowledge the advice that I have received from a number of people, but particularly David Noonan from the Conservation Council, who was very keen to make sure I had some alternative information.

There is also the question of operating costs. I am told that the factory-gate price of nuclear power is approximately 50 per cent higher than coal. Natural gas is not 50 per cent higher than coal, so you have a massive increase in the cost of producing nuclear power above that of the gas-powered plants that you wish to turn off overnight in order to run the nuclear power plant.

The notion of turning down existing generation to build a nuclear power plant (which is the only thing we can do, I am told) seems to me to be complete nonsense. Not only do you have to pay for a new power plant but you have to pay compensation for all the generators that have been asked to shut down in order for the nuclear plant to operate overnight. I really wonder what we would do to run a nuclear plant, because, of course, we would probably need to turn off the wind farms as well.

South Australia, as we know, has approximately 45.5 per cent of Australia's total installed wind capacity. Wind development in the state has grown substantially over the last five years and it would seem to me that this is the way we should be going. We should be looking at all the alternative clean, renewable energy sources and not putting that in jeopardy, as well as the solar electricity that is also increasing, with a number of households in South Australia feeding excess electricity into the grid. For all those reasons and many more that I would like to go into if I had time, I oppose the motion.

The Hon. R.B. SUCH (Fisher) (11:57): I realise this is a very sensitive issue for people in here, but I think the argument that has been put forward—'Where will you put it?'—is a silly, childish argument, because, as I indicated earlier, with a portable nuclear energy generator, you can put it on the back of a big truck, so you are not talking about—

The Hon. S.W. Key: We'll put it in Fisher!

The Hon. R.B. SUCH: I personally wouldn't mind. As I pointed out, nuclear subs park next to residential houses in Scotland, I am informed. I do not think there is a problem. I think it is a silly argument to say, 'Where will you put it?' You obviously would not, and you do not need to, have any large plant anywhere near any residential development, because with its efficiency and capacity, you can generate and transmit over a considerable distance the electricity that you generate.

I just mention again, people have to get out of their mind the mindset of a huge plant, because the way to approach this, as I indicated earlier, for places like Roxby and the mine up there, is to look at some of these newer smaller units—and you can have them in module form—which produce electricity which would be fantastic for places like Roxby and the new mine.

I know it is a sensitive issue and we have had people in the past say, 'Where are you going to put it?' and nominating suburbs. That is just so immature and childish as an argument that it is hardly worth even responding to. I have just surveyed 23,000 households, and the people are telling me that they are increasingly realising that we cannot keep going the way we are in terms of energy production.

We are getting more and more people coming out—as I said, Alexander Downer, Bob Hawke, others—who realise that we have to be more mature about this, more sensible and more open-minded. It will happen. I believe we will have nuclear energy here in the future, maybe one of those new types of generation that are more efficient where you do not have the waste material that you have now. I indicated before that the efficiency of what they call Generation IV reactors will go from 1 per cent to about 99 per cent, in terms of the material they use, which takes away a lot of the debate about where you store the waste material and so on.

I am going to test the house but I am not going to divide on it because I do not want to make life difficult for individual members. I just make the point again that it is our job in here to look at issues, confront them and debate them sensibly and maturely, but I can see and read that members in here do not want to tackle this issue at the moment. I think that is unfortunate and I make a prediction that, in the future—I will not be in here—maybe in 10 or 20 years, nuclear energy will certainly be on the agenda for South Australia.

Motion negatived.

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