AIE Perth June 28, 2005

Nuclear Power in Australia Why, Whether and How The case for nuclear energy
Ian Hore-Lacy General Manager Uranium Information Centre, Melbourne It has been fascinating to see the kite flying on the question of nuclear power for Australia, first by Brendan Nelson despite the earlier avowals by Mr McFarlane that nothing could be further from the government's collective mind. And now we have a surge of interest at high levels in federal government and even more significantly, Bob Carr in NSW giving his support! It is becoming clear to many that if in the light of growing electricity demand we take seriously the need to limit greenhouse gas emissions, we have nowhere else to go for electricity generation. By and large renewables cannot deliver continuous reliable supply on any scale, and nuclear has a half century lead on the blue sky aspirations of the coal industry, with its admirable clean coal initiatives which deserve support. Internationally, the nuclear renaissance is gathering steam. At present, 30 nations representing two-thirds of humanity use some 440 nuclear reactors to produce 16% of global electricity. More are being built in ten countries because they make economic sense. Soon, nuclear power will most likely extend to further nations as diverse as Poland, Turkey, Chile, Vietnam and Indonesia. This broad base representing most of world population and economic activity will provide the foundation for a nuclear century. And whereas ten years ago the environmental lobby was noisy in opposition, today you have some of the world's highest profile environmentalists speaking very clearly for nuclear power, not because they love it, but because it represents much less of a problem or threat than global warming. For clear-minded environmentalists, the great question before us is not whether nuclear energy will grow, but whether it will grow rapidly enough to play its needed role in the clean-energy revolution our world desperately needs. Every authoritative analysis points to the fact that humankind cannot conceivably achieve a global clean-energy revolution without a huge expansion of nuclear power to generate electricity, to produce hydrogen for tomorrows vehicles, and to desalinate seawater to meet a fast-emerging world water crisis.

So where do we stand in meeting legitimate public concerns about nuclear energy? First, the industry has fostered a global nuclear safety culture that draws on almost 12,000 reactor-years of practical experience - double that if you include naval experience. A network of active cooperation on operational safety now links every nuclear power reactor worldwide. Creation of this WANO network was an historic achievement, and the nuclear industrys most fundamental responsibility now is to use it effectively to build on an already impressive record of nuclear safety. There has never been any public harm from any reactor licensable in the west (or anywhere today) and as with most technologies, operations today have generally much enhanced safety margins compared with decades ago. As to the danger of nuclear weapons proliferation, we know that rogue states and terrorist groups will pose an everpresent risk. But strong, universal safeguards can ensure that even a 20-fold global expansion in nuclear power would not increase that risk, and in the meantime power generation is using up material from both Russian and US military stockpiles. Security for the environment and against terrorism need not conflict. And the safeguards regime under the Nuclear Non-Proliferation Treaty represents one of the great success stories of the UN, even if we now wish it had been even more ambitious. As to cost, steady reductions in operational and capital costs are carrying us into a future in which nuclear power will emerge as a clear winner on the field of affordability. These gains are occurring even without any consideration of environmental effects. As carbon costs are imposed on fossil fuel power generation, such as through the European Emissions Trading Scheme - currently equivalent to almost four Aussie cents per kWh from coal - nuclear power moves into an even stronger position. With a loading like that on our coal-fired electricity costs, nuclear would be comfortably economic here. Waste management is fundamentally a question of perspective. In Europe for instance, radioactive wastes comprise about one percent of all toxic industrial wastes. There have been no problems from storage, handling and transport of civil nuclear wastes in 50 years, and none are likely. For long-term storage, a strong scientific consensus favours deep geological repositories. Governments worldwide must follow the lead of Finland, Sweden, America and France by moving to construct such facilities. A petrol tanker on an Australian road is more of a public safety hazard than any nuclear waste in transit anywhere in the world. Cost of waste management and disposal is internalised at about one fortieth of generation cost. Technically, storage and disposal are straightforward. But we

do need to build public recognition that waste is in fact nuclear powers greatest asset. Unlike fossil emissions, the volume is minimal and is reliably contained and managed.

So, what is the world scene? Major nuclear power expansion is underway in some countries, and it is increasingly likely that this will spread to many. China and India are quadrupling nuclear capacity by 2020. China is about to start construction of eight large new reactors, four of them largely indigenous and four imported. India has just started up the first of its large indigenous reactors and its building program is most impressive, with eight more units under construction. Japan and South Korea are steadily increasing their nuclear capacity, and Japan is very serious about boosting its nuclear share further. Finland has four reactors providing a quarter of its electricity, is now building a fifth and talking about a sixth. There is steady growth elsewhere, including Russia and eastern Europe. On the other hand, in Germany, Sweden & Belgium nuclear power is set back by the need to appease and humour minor coalition partners in government. These anti-nuclear policies are unlikely to persist long enough to matter, or to outlast a change of government. Looking ahead, there are a number of most impressive reactor designs developed from the well-proven units now providing 16% of world electricity - most are second-generation types. But early 3 rd generation plants have been operating in Japan since 1996. Advanced 3 rd generation reactors are now on the market and being built. These have greater standardisation, simpler engineering, expedited approvals in several countries, longer operating life, and are one or two orders of magnitude safer than the workhorse 2nd generation units. That is the context. What then might be most relevant to looking at nuclear power prospects for Oz? The first one is negative: Capital costs are high - averaging around US$ 1500 per kilowatt overnight cost. I understand that this is in the same league as brown coal plant. These high capital costs are major hindrance to new nuclear reactor investment. But there is a lot of confidence that these capital costs can be driven down to around US$ 1100 per kilowatt with series construction. However, once a plant is built, the owners are relaxed as fossil fuel prices rise. Which leads to the fact that nuclear fuel costs are low: doubling the cost of gas increases electricity production cost about 70%. Doubling the cost of ex-mine uranium increases

electricity production cost about 5%. This is a major economic factor in choosing new plant. Overall costs are competitive in many parts of the world. Figures from the latest OECD international survey released in March show that at 5% discount rate nuclear in the range 2-4 c/kWh (US) is comfortably cheaper than coal in seven of ten countries, and cheaper than gas in all but one. Finland's decision to build a large new reactor was basically an economic one. Wind power is the main no-carbon alternative, but it typically costs much more per kWh generated and so needs government coercion such as MRET to succeed. This is both because of cost and intermittent unpredictability, hence further cost of back-up power capacity from conventional sources which is eventually passed on to consumers. This is especially so as the output gets up to about 10% of total share. For base-load power - continuous, reliable supply on a large scale, there are no carbon-free alternatives to nuclear power. Non-hydro renewables do have an important role, especially if coupled with hydro, but they are not alternatives. The largely unpredictable intermittency means that grid management operators constantly face the question: "how much wind can we put into the system without creating instability?" On top of internal costs you have - and increasingly need to take account of - external costs , those actually incurred in relation to health and the environment, and quantifiable. These are usually not built into the cost of the electricity to the consumer and therefore must be borne by society at large. These external costs for nuclear are very much lower than from alternatives. Opportunity costs are also relevant. Uranium has no other uses than concentrated energy production. Natural gas is sometimes touted as a CO2-reduction strategy relative to coal. But do we really want to squander such a versatile resource for base-load generation? It is most unlikely that our grandchildren will thank us for profligate use of it in largescale power generation. Gas is also a valuable chemical feedstock. Finally, the resource base for long-term use of nuclear power is excellent. Known economic reserves are currently about 50 times annual usage, and as many of you will realise that is simply a statement about knowledge, not geology. Very little exploration for uranium has been done for over twenty years it is just starting to get moving again now. On top of that, with one well-proven but currently uneconomic technological step one can get about 60 times as much energy out of the raw uranium as we do today. Uranium itself is fairly abundant, and thorium is also a potential fuel.

So is public opinion a reason to discount all this for Australia? I suggest that many years of fearmongering by assorted activist groups with ideological opposition to nuclear power is wearing thin and losing credibility. Much folklore and misrepresentation used to find their way into credulous media. But there has been a significant change in Australia and elsewhere over the last year, and positive, well-researched newspaper articles are now seen. Instead of rare and brief phone conversations with journalists in the past I now often find myself on the phone for twenty or thirty minutes discussing a range of prepared questions which arise from the journalist's study of our and other web sites. Then they go and write an intelligent story, having got their mind properly around the subject. In every country where it is measured, public support for nuclear power is strengthening, and - at over 80% positive it is strongest in countries like Sweden which have had to face up to prospects of phasing it out.

Finally, and further out: nuclear power is very likely to be used to make hydrogen for transport fuel, initially by hightemperature electrolysis, then by thermochemical process using high-temperature reactors. So, if we are considering what generating plant is suitable to be operating in 30-40 years in a greenhouse-constrained world, there is a strong argument for diversifying and including nuclear power in the mix for every country with concentrated electricity demand. Doubling the world's nuclear contribution would eliminate one quarter to one third of the CO2 emissions from power generation. Initiatives to increase nuclear capacity are increasingly to the fore elsewhere in the world, and projections of world nuclear output decades ahead continue to rise with every revision.

Ian Hore-Lacy manages the Uranium Information Centre in Melbourne and is Director of Public Communications with the World Nuclear Association in London. www.uic.com.au 1900 words