Sharing the vision for a nuclear future - Business - Business - theage.com.au


Australia must remove fear and ideology from the nuclear debate and recognise its key strategic role in the nuclear industry, writes Jon Stanford.
THOSE who choose to regard the Prime Minister's recent trip to Washington as a lap of honour are wide of the mark. The significance of what was discussed in North America has yet to be widely recognised, but it was probably of greater moment to the future of Australia than the outcome of any of his previous visits.
The issue in question, of course, is nuclear power. But the real parameters of the argument go far beyond uranium exports to India and the beginnings of a debate about using atomic energy domestically. They are defined by a new vision for a nuclear future shared by both George W. Bush and Tony Blair, and prompted by concerns about both energy security and the need to deal with global warming.
The role for nuclear power in combating climate change is widely accepted overseas. Even one of the founders of Greenpeace, Patrick Moore, has said: "Nuclear energy may just be the energy source that can save our planet from possible disaster: catastrophic climate change."
At present there are 443 nuclear power stations operating around the world. If nuclear fission were to meet one-third of the world's electricity needs by 2050, about 6000 new nuclear plants would be needed over the next 45 years. With 40 per cent of the world's economically recoverable reserves of uranium (and probably significantly more once serious exploration resumes), Australia could be facing a new El Dorado.
This opportunity will not be realised, however, if Australia chooses to remain an exporter of yellowcake. There is a clear logic in favour of developing a domestic uranium enrichment industry. This is not a technologically challenging or unsafe activity. Several countries, including small nations without nuclear weapons such as the Netherlands, possess an enrichment industry.
However, although the economic benefits of enrichment are obvious — the processed fuel is worth about five times as much as yellowcake — the danger of proliferation provides an even more persuasive argument. While current safeguards may be just sufficient to provide comfort that Australia's uranium will not be used for weapons production, they would be swamped by a major increase in demand from a much broader spectrum of customers.
Hence the Bush Administration's argument for leasing nuclear fuel. If Australia leased fuel rods to customers, rather than selling them raw uranium, new rods would be supplied only when the used ones were returned. This would provide far greater safeguards against other countries either enriching the yellowcake or reprocessing the spent fuel rods in order to manufacture weapons.

The next logical link in the chain, however, is probably the most difficult politically. Once the spent fuel rods are returned, they have to be disposed of.
This implies, in the context of a vastly expanded nuclear industry, that Australia could become the repository of about half the world's high-level nuclear waste. While this may cause angst, it should be noted that the safe storage of waste is essentially an international problem and that the geology of parts of central Australia make it one of the safest sites for storing waste in the world.
The nuclear waste storage industry is at present worth about $US12 billion ($A15.8 billion) a year globally. With expansion, this could grow to over $US150 billion. Once again, there is a clear economic opportunity for Australia, coupled with the assumption of a global environmental responsibility.
Compared with enrichment and waste disposal, the case for the domestic use of nuclear power in Australia is relatively simple. Contrary to some recent statements, the new nuclear power plants provide the cheapest way of generating carbon-free electricity. For example, 78 per cent of France's electricity is generated by nuclear plants and, according to the OECD, French industry enjoys some of the lowest electricity costs in Europe. Canada is investing in new nuclear plants because they produce cheaper electricity than gas.
In Australia, there has been no detailed assessment of the costs of nuclear generation. We benefit from cheap coal, which at present provides a long-run average generation cost of about $40 per megawatt-hour. Adding carbon capture and storage (CCS) facilities would increase that cost to nearly $100, although this may fall to about $70 as CCS technology improves. The costs of most renewables remain high, with wind at about $80 per MWh.
The main costs of a nuclear plant lie in its construction, although new reactor designs have significantly reduced these costs in recent years. In the US, the long-run average costs of a new Westinghouse 1100 MW nuclear reactor are stated to be under $US35 a MWh (about $A46). This is said to include all costs, including waste disposal and decommissioning. In a carbon-constrained world, this will represent cheap electricity.
The contemporary problems with nuclear energy have little to do with operational safety. Rather, the main concerns relate to terrorism, namely possible attacks on nuclear generators or on waste transportation. These issues would clearly need to be dealt with.
With the leaders of the US and Britain now agreed about the future role of nuclear power, Australia becomes a key strategic player and there may be increasing international pressure for us to share this vision. The potential economic pay-off could be enormous, with very substantial greenhouse benefits as well. Yet the nuclear debate in Australia tends to be dominated by fear, ignorance and ideology. The issue may be more difficult politically than anything the government has tackled before, including gun control, the GST and the invasion of Iraq.
Jon Stanford is co-chairman of Insight Economics. His consultancy practice focuses on greenhouse and energy issues.