Tom Kenyon: Hot rocks will keep power bills low | Opinion | The Australian

Tom Kenyon: Hot rocks will keep power bills low

JOHN Howard's climate change "solution" is a 50 per cent rise in the price of electricity. How economically responsible is that, especially when there are cheaper solutions out there such as geothermal?
After talking to Ron Walker on the phone about a proposal to set up a nuclear power company in Australia, the Prime Minister announced the Switkowski inquiry into nuclear power. Coincidence or wedge? You be the judge.
The interesting thing about the Switkowski report is that it contained the best reason for not implementing nuclear power, a 50 per cent power price rise.
But let's back up a bit. Australians recognise the need to reduce our CO2 emissions. In fact, they are way ahead of the PM and that's why he has been so badly caught out. They also recognise that nuclear energy is an emission-free source of energy and to be blunt, are becoming increasingly relaxed about it.
It's time we in the ALP gave up pretending that nuclear energy is Satan's power supply of choice, because it's not working. It's time we stopped repeating the myth that waste is an issue that can't be dealt with. Some countries such as Sweden are dealing with it. It's time we stopped saying that nuclear power is bad for the environment. It's just not true. Name one species that has been made extinct by nuclear power. You can't, can you?
Now have a think about the environmental effects of global warming. The whole Great Barrier Reef - gone. Whole biosystems - wiped out. And with them species after species after species. Are we really going to let an ideological hangover from the Cold War stop us from fixing this thing?
It's time we accepted that in some countries nuclear power is the solution.
Nuclear power is not an environmental problem, it's an economic problem. The Prime Minister's political attempt to wedge the ALP over nuclear power will cost the average family between $500 and $1000 a year. If you have a $1000-a-year electricity bill, the Switkowski report says nuclear power means you'll be paying $1500. That'll be $3000 if you already have a $2000 bill.
Transpose that to industry and you start to see a few more problems. How do you like them apples?
Howard's climate change solution is schizophrenic. On one hand he says "we can't hurt the economy" on the other hand, he's suggesting a 50 per cent electricity price rise. Imagine the effects this will have on industry, especially our already struggling manufacturing sector who are heavy users of power.
In some countries, such as Taiwan, it's expensive to import fuel such as coal so nuclear power is actually cheaper to produce. These countries get a double advantage - reduced emissions and cheaper power, thus fulfilling their international obligations and making their industry more competitive. This means that the effects of any energy price rise in Australia will be compounded.
What we need in Australia is a way of generating emission-free, baseload power that doesn't cost much more than coal or gas generation.
Geothermal energy is emission free, cheaper than nuclear, not much more expensive than our present coal and definitely cheaper than coal if allowances are made for geo-sequestration.
The principle of geothermal is not new; there are countries around the world that use it, such as New Zealand and Iceland, even France.
Essentially you pump water down a hole and across hot rocks (200C+), where it turns to super-hot water.
The water comes up another hole, is turned into steam and is used to generate electricity. However, there are some technical areas where processes employed in Australia would differ from those used overseas and these need to be dealt with quickly.
The federal Government could be doing a lot to help. For instance, it should develop a drilling subsidy for geothermal similar to the South Australian PACE initiative (which is for minerals).
This would put in one government dollar for every private dollar incurred in the very expensive drilling required. It should also introduce a flow-through share scheme for geothermal.
This would pass the tax deductions for exploration and development costs incurred by geothermal companies on to their shareholders, thus increasing investment in a risky sector.
A national emissions trading scheme, furthermore, would help
create the right market environment (another thing the Government is schizophrenic about). There are plenty of other things that Canberra could do to foster this industry and it should.
We'll all be better off if they do.
One thing is for sure though: a 50 per cent increase in the cost of electricity is not going to help anyone.
Tom Kenyon is Labor MP in the South Australian state parliament and has a degree in environmental management. He owns shares in a geothermal exploration company.