Issue 231, July 2024
As we move in to the new financial year — one in which the voters will have to decide who will govern Australia for another three years — the media and politicians have resurrected the “climate wars,” with the added twist of a full-on debate about lifting the national ban on nuclear power. Unfortunately, it is a debate marked initially by puerile catcalling about risks and costs from opponents of the technology, including, perhaps astonishingly with respect to cartoon stuff about deformed creatures, from leaders of the federal government in the first days after the Coalition announcement on the issue. At the same time the regime, along with State governments, is forging ahead with plans to site large wind farms offshore from west to east with almost no public debate about what this will cost or how long it will take to establish seven of them – while onshore renewables development continues to lag what is needed to meet official net-zero targets, as does the massive roll-out of new transmission lines required to meet these goals.
“There is no escaping this impenetrable fact: If Australia is to remain competitive in the global marketplace, its industries must be given every opportunity to reduce emissions in a cost-effective way, while maintaining access to reliable baseload power” – Tania Constable, CEO, Minerals Council of Australia.
“There is a case for considering zero emissions nuclear power to help with the decades-long challenge of decarbonising Australia’s fossil-fuel-intensive economy as part of a technology-neutral energy approach to generating reliable baseload power and firmed wind and solar generation” – the Australian Financial Review in an editorial.
“The energy transition is proving harder, longer and more costly than predicted” – the Financial Review in another editorial.
“The reality is that the energy transition is basically in tatters. Investment in renewable energy has stalled as various governments keep changing the rules. The options for storage and its cost are major impediments. It has come to a bizarre point where State governments are subsidising the continuation of coal-fired plants to achieve net zero” – economist Judith Sloan in a commentary in The Australian newspaper.
“Australia’s 19 coal power stations generated 125 terawatt hours of electricity last year. The Market Operator expects all will be retired by 2037. On top of that, our energy demand is expected to increase by more than 230 TWh by 2050. Over the next 25 years we need to build facilities that generate at least 355 TWh every year” – Simon Holmes a Court, writing in The Guardian newspaper.
“I am very happy for the election to be a referendum on energy, on nuclear, on power prices, on lights going out, on who has a sustainable pathway for our country going forward” – Peter Dutton, federal Opposition leader. “There is zero chance of reaching net zero by 2050 without zero-emission nuclear power”
“The Liberals need to explain the cost of their nuclear policy, so voters can understand just how big the public expenditure will be” – federal Finance Minister Katy Gallagher.
“Neither the ALP nor previous governments have ever put a cost on the Net Zero policy. Nor have they ever disputed my estimate, currently $15.6 billion per year and growing, which would mean costs well in excess of $500 billion by 2050” – economist Alan Moran in the Spectator Australia.
“I don't support nuclear energy because it's expensive and slow to build and will be a massive threat to the reliability of our energy system because it would keep coal-fired power in our grid longer and would see our emissions stay up for longer” – federal Climate Change & Energy Minister Chris Bowen.
“If there were a time for honesty in debate about energy policy, it is now” – federal Opposition energy spokesman Ted O’Brien.
As a giant public row erupted in mid-June over the Coalition’s announcement on nuclear energy, the Lowy Institute published its latest poll of Australians’ opinions, pointing to a notable shift in community views on the technology. Lowy says its new survey finds that 61 per cent of respondents now “somewhat” or “strongly” support Australia using nuclear power to produce electricity.
“In contrast,” the institute declares, “more than a decade ago 62 per cent of Australians were against its use.” The earlier poll, taken after Japan’s Fukushima incident, recorded 46 per cent “strongly against” the technology. Now only 17 per cent are in strong opposition and 20 per cent are “somewhat opposed.”
The latest survey also records only two per cent “don’t know” what to think.
In a commentary, the institute says the new poll outcome is “a remarkable result” in contrast to more than 250,000 people taking part in street protests on nuclear issues “only a few decades ago,” adding “Australian nuclear politics have dramatically changed.”
Meanwhile a poll published in June by RedBridge Group points out that the strongest support for nuclear comes from Australian men – 51 per cent indicating support in the pollsters’ latest survey, compared with just 19 per cent of women.
The ABC, reporting the survey outcome, says: “The strongest support for nuclear is found among Coalition voters (52 per cent), the over-65s (47 per cent), people who own their houses outright (42 per cent) and people who describe themselves as under "no housing stress at all" (52 per cent).
Also, in late June a Resolve Political Monitor poll conducted for The Age and Sydney Morning Herald newspapers found 41 per cent of respondents supported the use of nuclear power, 37 per cent were opposed and 22 per cent undecided.
The survey showed support for use of the technology among 60 per cent of Coalition voters polled – as well as from 30 per cent of Labor supporters and 28 per cent of voters for the Greens.
Australian media widely reported “a stark warning” in June from the Energy Market Operator about the prospect of gas supply shortages in eastern States this winter. AEMO says the southern States are now dependent for adequate supply on the pipeline flows from Queensland for the rest of the season
The alarm came as an eastern Australian cold snap caused a surge in gas demand, raising it to 99 per cent of available supply.
Samantha McCulloch, Australian Energy Producers CEO, declared: “Gas producers are doing everything they can to meet the heightened demand and to keep Australian households warm and businesses running” while stressing that “the current scenario should not come as a surprise,” given repeated warnings in recent months by AEMO, the Competition & Consumer Commission and others.
McCulloch stressed the need for “urgent measures to prevent winter shortfalls becoming a recurring issue and to avert the structural shortfalls forecast for 2028.”
Australian Pipelines & Gas Association CEO Steve Davies told media: “For half a decade, industry has been warning about looming gas supply shortfalls. Little has been done to remedy it. The opposite has occurred, and businesses are now being asked to pay the price.” Davies added that poor generation from large-scale renewables was also exacerbating the situation. “The extreme lows particularly in wind farm yields have meant gas-powered generation has picked up a significantly larger load to keep the lights on and ensure electric homes can remain heated,” he said.
Josh Stabler, managing director of analysts Energy Edge, said the situation would become “particularly dangerous” later in winter if there continues to be supply issues on the east coast and there is further extreme cold weather.
Speaking at Quest Events’ Australian Energy Week conference in Melbourne in mid-June, Rik De Buyserie, CEO of the French-owned Engie energy operations in New Zealand and Australia, warned that the Albanese government’s capacity investment scheme could prove to be a “headwind” against new gas generation.
De Buyserie told the conference that the scheme is “hugely positive for underwriting renewables and battery storage developments” but added that it will also “add headwinds to the business case for keeping gas-fired assets in market.”
He said “If we’re picking winners, we should pick actual winners and, by every measure that matters, gas-fired generation is a winner – particularly those assets that are already in the market.”
De Buyserie said he had pointed to major challenges to Australia’s energy transition when speaking at the 2023 AEW conference. They were “the monumental task” of upgrading the transmission network at the same time we navigate access for a large-scale renewables build-out, the pace of permitting and approvals along with the problem of community acceptance, the “wicked problem” of trying to keep the thermal generation fleet in the system, and the policy settings attempting to solve these problems, but in some cases doing more harm than good. “I can honestly say one year later that we haven’t moved nearly fast enough on any of these fronts and there are new emerging blockers to our progress.”
He added: “In today’s market, you need to be a realist first and a purest second.”
Federal Nationals leader David Littleproud has accused the Albanese government and Teal MPs of overlooking regional Australia in taking an all-renewables approach to the energy transition.
In an interview with Sky News, Littleproud said they were ignoring the burden they were asking the regions to bear, claiming that “we've got transmission lines, solar panels and wind turbines taking up our productive landscape, tearing up remnant vegetation.”
Energy Consumers Australia is demanding that the energy sector “take a good hard look at itself” after publication of its latest six-monthly consumer sentiment survey of households and small businesses in mid-June.
CEO Brendan French says only 59 per cent of respondents rated their gas service positively (a five per cent decrease on 2023) and just 55 per cent rated their electricity service as good value for money (a four per cent decrease on 2023). “Only insurance was rated as worse value for money,” he added. “The research also shows that consumers trust energy companies less than supermarkets and banks.”
French argues: “Affordability has consistently been the number one priority for the energy system for households and small businesses since Energy Consumers Australia started running these surveys nearly 10 years ago.
“If consumers now rate energy services as worse value for money and energy companies as less trustworthy than supermarkets then that’s a clear sign the sector is failing consumers. We need better consumer protections and tighter enforcement of retailer behaviour.”
The survey canvassed 2,100 households and 500 businesses nation-wide.
The Clean Energy Council declares that the renewable investment sector is “bouncing back,” with the first quarter of this year the best for financial commitments since the end of 2022.
The lobby group says five generation projects with a combined capacity of 895 megawatts and $1 billion worth of storage projects secured financial investment commitments in the quarter.
It adds: “Investment levels in generation will need to increase to commitments of at least six to seven gigawatts in 2024 and successive years to meet the federal government target of having 82 per cent renewables by 2030.”
The State government in Queensland, confronting an election this year where polls seem to indicate it may be thrown from office, has gone for broke in pledging, if re-elected, to spend $26 billion over the next four years on renewable generation, electricity storage and transmission projects – starting with outlaying $8.68 billion in the 2024-25 financial year.
Faced with community surveys indicated its support has fallen to 28 percent, the ALP government has committed to reducing State emissions by 50 per cent by 2030 and 75 per cent by 2035. However, in order to achieve these targets, the Queensland energy system needs six times more large-scale wind and solar generation by 2035 than is currently operating in the State.
The centerpiece of the Queensland plan is a “SuperGrid” that the government declares “will be designed to bring all elements of the electricity system together to deliver 50 per cent renewable energy by 2030, 70 per cent by 2032 and 80 per cent by 2035.”
The government has declined to provide a detailed cost breakdown of the program and Premier Miles and Energy Minister Mick de Brenni have pushed back against media suggestions increased investment is needed to deal with project cost blowouts.
Miles says the capacity to spend more flows from greater revenue from coal sector royalty payments.
“If only we could power the nation off the clattering of keyboards since the Coalition announced its nuclear policy. The seemingly endlessly renewable resource of hysteria in this country could surely be harnessed.”
In a paragraph, newspaper columnist Parnell Palme McGuinness sums up the current national energy carry-on.
And she also rather neatly sums up the political scene further on in her op-ed: “Dutton’s proposal for nuclear power is another way of expressing a focus on the cost of living. Energy prices are punishing households and businesses. Voters are starting to connect the increases in their power bills to the transition to renewable energy, especially as discussion turns from rooftop solar to poles and wires across the country.”
One more thing she wrote is: “Just as Dutton-panic served to propel the opposition leader into the daily news cycle, where he was found by the public to be rather less scary than portrayed, nuclear panic will quickly make nuclear power feel familiar. The longer the nuclear debate runs at full velocity, the less impact the scare campaigns will have.”
All of which reinforces for me the validity of a catchphrase made famous by Michelle Obama a decade ago: “When they go low, we go high.”
Years later Obama explained further: “Going low is easy, which is why people go to it. It’s easy to lead by fear. It’s easy to be divisive. It’s easy to make people feel afraid. It’s also the short-term thing. It’s not about solving anything.…”
This, too, resonates with me in our current environment.
What I find still more interesting is that, with respect to the nuclear issue, fear and derision does not appear to be working here.
There is a seemingly inexorable rise in Australian community acceptance that there could be a local role for nuclear (as reported earlier in this newsletter re the latest Lowy poll) – highlighting what I believe to be the key point of the current debate, not where or when or at what cost a nuclear industry can be developed here, but why should we cling to a political ban on a technology that is now widely accepted elsewhere as having an important value for global decarbonisation and reliable power supply?
Perhaps the biggest blow to the nonsense messaging about the issue following Peter Dutton’s announcement in mid-June has come from a man whose credentials can’t be called in to question: Ziggy Switkowski, who chaired John Howard’s 2006 inquiry in to the potential for nuclear electricity in 21st century Australia and was a chairman of ANSTO.
Switkowski is an icon of Australian business and his view is that “scepticism about the plan is misplaced.”
The Coalition plan “is feasible,” he says, and “the next generation of nuclear plants could justify their higher cost because of the value of their reliable baseload power.”
Dutton and federal Coalition energy spokesman Ted O’Brien, he adds, are as well-informed on the topic as anyone he’s spoken to in the past 20 years. “The strong positions some critics have taken are ridiculous.”
It turns out that Dutton gave Switkowski an advance look at the statement and his view is that “the economics can be made to work.”
He also observes that “I think nuclear will be more favored than it has been in the past 20 years. At one level, it may not be the least-cost option, but at another level, it would be the most valuable option.”
Writing in the Daily Mail newspaper, political commentator Peter van Onselen notes that Switkowski’s intervention needs to be taken seriously and “can’t simply be dismissed with a juvenile series of social media gags.”
Switkowski has called for a considered debate – and, in my book, that should focus on the need to lift the ban. Let’s go high.
Keith Orchison
25 June 2024