Safe, Ever-Reliable & Affordable Nuclear Power Perfect Solution to Any Energy Crisis

The perpetrators of the West’s self-inflicted energy crisis are readily identified by their zealous promotion of subsidised wind and solar. Hiding in plain view, these characters become even more conspicuous when they start ranting about the (purportedly staggering) costs and (supposedly deadly) safety risks of nuclear power generation. The argument run by this crowd is powered by blind fury, rather than facts and evidence. But never mind.

Australia’s Green/Labor Alliance is presently turning itself inside out as it attempts to howl down their opponent’s recent policy shift towards always-on nuclear.

As commentators with an eye on the next election have already identified, the move by the Liberal/National Coalition (currently in Federal opposition) to back nuclear power as the long-term future solution to 20 years of self-destructive energy policy is pure political genius. One of those commentators, The Australian’s Chris Kenny deals with the politics of the matter in detail below.

But before we cross to Chris, we thought it apt – for his benefit (among others) – to highlight one of the critical rule changes that aided solar and wind generators and helped destroy the profitability of the incumbent coal-fired power generators that once provided more than 85% of the power generated and supplied across Australia’s Eastern Grid; a time when power was cheap and available in abundance. The following is from our post – Subsidised Wind & Solar Root Cause of Every Power Pricing & Supply Crisis – from 25 June 2022:

This country’s shortest route to solving its immediate power pricing and supply calamity is to fix the power market dispatch rules, which give preference to intermittent wind and solar.

Once upon a time, those rules required electricity generators to tell the grid manager when and how much power they intended to deliver, and over what time-frame.

Demand was forecast in advance, based on seasonal variations, time-of-day and day of the week, with allowances made for extreme weather conditions, when the use of air conditioners (either for heating or cooling) would lead to spikes in demand. Supply was organised according to schedules to match forecast demand.

Generators hoping to participate in the National Electricity Market were required to offer power according to scheduled demand, in a manner that would satisfy all power consumer’s needs.

Then, along came wind power.

With their output determined by the weather, wind power generators determined to rewrite the rules, they could never satisfy.

The Genesis of the disaster occurred in 2000 when the Liberal/National Coalition headed by PM, John Howard introduced Federal legislation dictating the purchase of wind power on a mandated basis, with subsidies paid to an eager band of rent seekers; Babcock & Brown headed the queue.

Initially, the target was modest, but the die had been cast. For a full breakdown on the origins of the RET see this article by Ray Evans and Tom Quirk: The High Price of PC Power from March 2009.

After Kevin Rudd’s Labor government took power in 2007, the Renewable Energy Target was jacked up ten-fold to 45,000 GWh: 41,000 GWh of wind and large-scale solar (LRET) and 4,000 GWh of domestic rooftop solar (SRES).

Under the dispatch rules that then existed, wind power was designated “non-scheduled”, which meant that wind and large-scale solar power outfits had no right to dispatch power to the NEM, unless the grid manager, the National Electricity Market Management Company (NEMMCO) permitted them to do so. The alternative was to try and meet the requirements set by the definition for “scheduled” generators: namely, guaranteeing delivery of set volumes of power, over a pre-determined time-frame. Obviously, the fickleness of Mother Nature meant wind and solar generators could never satisfy that definition.

Moreover, the grid manager hits “scheduled” generators with substantial financial penalties, in the event that they fail to deliver power according to the pre-ordained schedule.

Unable to satisfy the dispatch rules, the wind lobby did the next most obvious thing: it rewrote them.

The Australian Energy Market Commission was inundated with complaints about how unfair it was that wind power outfits were unable to ‘compete’ in a market where customers had this pesky habit of demanding power as and when they needed it, rather than having it delivered at crazy, random intervals.

If a wind power outfit wanted to guarantee regular participation in the NEM, it effectively had to build an equivalent capacity in fast-start up gas (Open Cycle Gas Turbines) or diesel generation to match whatever wind power capacity it built.

AGL did just that back in 2001, when it built its Hallett Power Station (200 MW of OCGTs that it runs on diesel), in order to match the wind power capacity, it was then planning to build between Jamestown and Hallett.

The cost of building utterly unreliable wind power capacity – as well as being forced to build additional reliable plant to compensate for the inherent intermittency and unreliability of weather-dependent wind – was viewed with contempt: operators like AGL determined that it was much fairer to pass the true cost of intermittent wind power generation to somebody else; namely, Australian power consumers.

The AEMC (packed with Big Wind friendlies) willingly obliged: under its Rule Determination issued in May 2008 it created an all-new category of generator defined as “semi-scheduled”, tailored to suit the chaotic delivery of wind and solar. Masters of the English language might scratch their heads at a linguistic concept that sounds a lot like the idea of being half pregnant.

The new dispatch rule came into force in January 2009 and the rest, as they say, is history: from that point forward, thousands of turbines with a combined capacity of 9,854 MW were speared across four states and connected to the Eastern Grid.

Over the last six years, plenty of large-scale solar has been rolled out across SA, southern Queensland and northern New South Wales, enjoying the same care-free classification: “semi-scheduled”.

From 2009, semi-scheduled wind and solar were then, and thereafter, entitled to dispatch electricity to the NEM, whenever the wind and sun permitted.

Critically, the failure of a semi-scheduled generator to deliver power to the grid has no consequences at all for the wind or solar power outfit concerned. Consistent with their general manner of operation, it was all care and no responsibility for the wind and solar industries, from then on.

The conventional generators (coal, gas and hydro) are still designated “scheduled” generators: a failure to deliver according to the agreed schedule results in the imposition of very substantial financial penalties. True it is that their operation isn’t dependent on the time-of-day or whether the wind is blowing, which makes them unlikely to be hit by those penalties. However, they still need to schedule, well in advance, if they wish to participate in the market, at all.

Once a coal or gas-fired plant is scheduled to deliver, that plant must remain online at all times, irrespective of whether it’s able to dispatch power to the grid.

When the wind is blowing and the sun is up, wind and large-scale solar generators use the value of their Renewable Energy Certificates – they receive one REC for every MWh dispatched, with a REC currently worth $50 and at times up to $89 – to undercut coal and gas generators. Those generators (forced to remain online because they’re scheduled and would face penalties if they didn’t) continue to burn fuel, pay wages and overheads, but are unable to dispatch electricity and earn revenue.

So, the scheduling rules that need immediate attention involve a double whammy for conventional generators: they suffer financial penalties imposed by the grid manager if they fail to deliver power according to the grid manager’s pre-ordained schedule; and they suffer financial losses because they can’t deliver power when the sun is shining and the wind is blowing, even though they continue to burn coal and gas and run up other costs. Hence, the increasing number of breakdowns of coal-fired generating units, that require urgent repairs, due to a lack of scheduled maintenance. Which the MSM refers to as “coal outages”.

If anyone studying the operation of markets is looking for an example of an unequal playing field, Australia’s electricity market is it.

While there’s been plenty of talk from Liberal and National backbenchers over the years about refurbishing Australia’s existing fleet of coal-fired power plants and building new High-Efficiency Low Emissions coal-fired plants, unless and until the dispatch rules are returned to what they were in 2008, conventional generators will suffer the same disadvantage that’s making them unprofitable, now; and which has done so, since 2009.

The first and most obvious step towards restoring reliability to Australia’s power grid and affordable power to Australian power consumers, is redefining wind and large-scale solar as non-scheduled generators. By that definition, wind and solar power outfits would no longer be able to participate in the NEM, without the permission of the grid manager. Scheduled generators, on the other hand, would be able to dispatch electricity according to the schedule, without interference from chaotically intermittent and heavily subsidised wind and solar.

The alternative is to classify all generators as “scheduled” generators; thereby requiring wind and solar power generators to actually compete in the power market and to suffer the same financial penalties that apply to every other generator in the market. Either way, the characters who keep claiming that wind and solar are truly competitive would get the opportunity that they fear the most: a head-to-head with coal, gas and hydro.

If Labor PM, Anthony Albanese ever wants to meet his promise to cut power prices, his other target must be an immediate end to the subsidies directed to wind and solar (currently worth more than $7 billion a year) that created the mess, in the first place.

The direct cost of those subsidies is added to every Australian power bill; namely the cost to retailers of purchasing the mandated number of Renewable Energy Certificates each year: the mandated requirement hit 33 million in 2020, with that number needed each year until 2031. The alternative for retailers is paying the shortfall penalty, a $65 per MWh fine imposed for failing to meet the LRET’s mandated targets, set by the Federal government’s Renewable Energy (Electricity)(Large-Scale Generation Shortfall) Act 2000.

The indirect costs of intermittent wind and solar are also born by power consumers, totally unnecessary costs which include: power market gaming around wind and solar output collapses, that send the spot price all the way to the regulated market cap of $15,500 per MWh, for power that – before the destruction coal-fired generator’s ability to dispatch power in lockstep with demand – cost those generators less than $50 to deliver to the grid; and escalating distribution costs, the result of building networks to take spurts of ‘occasional’ wind and solar power from hundreds of increasingly remote locations.

Not that any of the above will signify with the current energy intelligentsia. But we thought it worthwhile throwing a little light on the subject, as an antidote to the ingrained ignorance and practised delusion that currently prevails among politicos and the MSM.

What we wrote about talk from the Liberal and National MPs about refurbishing existing coal-fired power generators and building new HELE coal-fired plants back in June 2022 applies with equal force to the situation that any new nuclear power generator would occupy.

That is, until the dispatch rules are returned to what they were – when generators were either “scheduled” or “non-scheduled” – wind and solar generators will continue to abuse their status as ‘semi-scheduled’ generators and continue to game the system, entirely as they do right now. So, whatever the Liberal/National Coalition have to say about nuclear power, the first priority should be to scrap the notion of ‘semi-scheduled’ generation.

Over to Chris for his analysis.

Nuclear no-brainer for self-imposed energy crisis
The Australian
Chris Kenny
9 March 2024

Between now and the next election we will see an energy debate every bit as ferocious as the uranium mining debate of the 1970s and early ’80s that pulled at the seams of the Australian Labor Party. But this contest will be even more important for the country.

The partisan contest over domestic nuclear energy is a battle over whether this energy-rich nation can reclaim the cheap, reliable electricity advantage that once flowed from our natural bounty and underpinned the modern economy on which our egalitarian society is built. Our self-imposed energy crisis now divides rich and poor, city and country, and blue collar and white collar.

The nuclear debate will not be easy for Peter Dutton and the Coalition because the opposition from Labor and the Greens will be emotive and relentless. Yet because the facts of the argument favour nuclear so strongly, a successful prosecution of the argument has not only the potential to deliver energy security but also to revive the Coalition’s fortunes and create convulsions on the Labor side where there will be a schism between the ideologically anti-nuke troglodytes and those who see the need to embrace modernity and a practical path to net zero.

Through the 1970s and ’80s Labor went from opposing all uranium mining to the illogicality of endorsing one mine only, and then, to facilitate John Bannon’s Labor government in South Australia and the enormous Roxby Downs project, adopting the absurd “three mines” policy.

A similar paradox already exists in the current Labor stance where the party endorses nuclear energy in Australian submarines moored in our harbours, but not nuclear energy generated on our shores.

As recently as 2007, on the cusp of claiming government under Kevin Rudd, the ALP national conference hosted a passionate debate about allowing additional uranium mines (if three mines were OK why not more?). Anthony Albanese unsuccessfully led the opposition to this policy change.

“Delegates,” said Albanese, “the light on the hill is not the glow of radiation from a nuclear waste dump.” His argument rested on concerns about waste and proliferation: “You can guarantee that uranium will lead to nuclear waste; you can’t guarantee it won’t lead to nuclear weapons.”

If that argument was stretching the bounds of rational argument back then, when countries such as France, Finland, South Korea, Argentina, Britain, Canada and the US were adequately dealing with both issues, then the arguments put forward by Albanese now, as Prime Minister, are ludicrous. He seems to have given up on the waste and proliferation fearmongering and just decided that what works in other developed economies cannot work here.

“Well, it doesn’t add up,” he told Adelaide radio FIVEAA this week. “I think nuclear power can work overseas and does work, I’ve got no problem at all.” And the critical problem in our country, according to Albanese, is cost.

“Well, no one has ever been prepared to put up a dollar, and that’s the truth of the matter, the market is what’s determining where that investment goes, and the market shows that renewables is the cheapest form of energy, and in South Australia in particular,” Albanese told FIVEAA, finishing off with what he must have thought was a clever nod to the local audience.

The trouble is that apart from having the largest penetration of renewable energy, SA also has the most expensive electricity – what a coincidence – and it is the only state to know the pain of a statewide electricity blackout. So SA is not such a good example. Especially given the same state has some of the largest known exploitable reserves of uranium in the world that it exports globally.

Besides, it is a fallacy to claim the market decides where energy investment goes – nuclear energy is banned by federal and state legislation, so it is those government-imposed restrictions that ensure no one can “put up a dollar”.

If Labor and Albanese are to make good on the pretence of a rational and agnostic approach to energy solutions, they must ensure all state and federal nuclear energy bans are repealed.

Even that would not be enough. The national energy market specifically is designed to favour renewable energy and exclude other sources, and the same rules that have helped force huge amounts of coal and gas-fired generation out of the market provide an impediment to nuclear.

This was identified by the groundbreaking Nuclear Fuel Cycle Royal Commission carried out by former SA governor and retired RAN rear admiral Kevin Scarce under Labor premier Jay Weatherill in 2016.

It recommended SA keep a watching brief on domestic energy opportunities that were not “commercially viable” under “current market rules”. The royal commission found the commercial viability was a close-run thing, declaring nuclear unviable at a cost of capital of 10 per cent but profitable at 6 per cent.

What if the NEM appropriately valued reliability alongside unit cost of electricity? And what if costs were estimated across 50 or 75 years when all renewable kit, including batteries and generators, would have to be replaced at least three times during the single life span of a nuclear generator?

To get a reasonable assessment of investment opportunities Australia would have to repeal the nuclear bans and adjust electricity market settings.

The most recent market assessment of long-term, low-carbon energy costs by the International Energy Agency is favourable for newly constructed nuclear plants. “Nuclear thus remains the dispatchable low-carbon technology with the lowest expected costs in 2025,” it found.

A site at Murrays Beach on the southern headland of Jervis Bay in NSW was cleared for the construction of a nuclear energy plant in the early ’70s. It is now a handy carpark in what is a popular tourist area still administered by the ACT and used by our defence forces. Back then the Cold War leap into nuclear technology was put on ice because of our abundant coal and emerging gas supplies. If we had known about a looming need to reduce greenhouse gas emissions, no doubt the domestic nuclear energy would have proceeded and been well established now.

Even still, if we had grasped the nettle when global warming first became a global preoccupation in the ’90s, we could have had nuclear plants operational here a decade ago. There is no point in lamenting the years lost, it merely underscores the need to hasten sensibly now.

One critique we hear from the Climate Change and Energy Minister Chris Bowen is that nuclear is “too slow and too expensive”. This takes a fair amount of chutzpah given we have spent more than $100bn and at least 25 years on a renewables frolic that has only increased energy costs and undermined energy security.

Bowen is persisting with the Snowy 2.0 pumped-hydro project, which is likely to cost $20bn and take at least a decade to complete – if it succeeds. Even then it will not provide additional generation capacity, just store renewable energy for when we need to use it. Too slow, too expensive and for too little.

The United Arab Emirates began construction of a nuclear power plant in 2012 and it now has been operational for almost two years. This Barakah plant supplies up to 5600 megawatts, or about 25 per cent of UAE demand – a similar plant in Australia would supply close to 20 per cent of NEM peak demand.

Mining magnate Andrew “Twiggy” Forrest, who is in receipt of government subsidies for hydrogen projects, is a vocal Labor ally in the fight against nuclear. One of the complications with nuclear power is the excess electricity generated when it is not required – such as overnight – but this provides potential for hydrogen production or desalination at times of low demand. Undoubtedly our future energy mix must and will include renewables.

But politicians promising a renewables-plus-storage model are selling an experiment that has not been completed in any sophisticated economy and which even the IEA says is impossible with current technology. The IEA says half the effort to get to net zero by 2050 will have to come from technology currently in the development stage or not yet invented.

Unless, of course, we greatly expand nuclear energy. This is why 22 nations, including the US, Canada, Japan, Britain, Sweden, Finland, France, South Korea and the host nation, oil and gas-rich UAE, signed a pledge at the UN’s COP28 Climate Change Conference in Dubai last December to triple global nuclear energy output by 2050. They cited OECD Nuclear Energy Agency and World Nuclear Association studies showing the world needed this tripling to meet net zero.

It is truly odd that Labor wants to avert its eyes from these developments and play no role except to supply raw materials.

The green-left constantly tells us we are global climate laggards, that we are falling behind Europe, the US and the UK when it comes to emissions standards, emissions reductions goals and carbon trading and taxing, yet on nuclear these same people tell us that not only should we refuse to follow the developed world’s lead but also that we are not up to it.

It makes no sense, and it demonstrates that ideology or partisan point-scoring (or both) have got in the way of rational energy policy. If nuclear is essential for a global response, why would this nation decide it is too technically difficult for us to manage – especially when, simultaneously, we plan to deploy nuclear-propelled submarines as a major platform in our maritime defence?

What sort of a country would be one of the world’s leading uranium exporters and run a fleet of nuclear-propelled submarines but refuse to even consider domestic nuclear power?

It seems inconceivable, given we have always been an aspirational nation, that we would volunteer to exclude ourselves from one of the world’s most technologically sophisticated and important industries.

Labor and the renewables zealots claim we had a “wasted a decade” under the Coalition, and Albanese reckons he has taken Australia out of the “naughty corner” in global climate action talks. Yet they want us to continue to stand aside from the one known technology for reliable, long-term, zero emissions energy.

That SA royal commission destroyed many of the shibboleths of the anti-nuclear activists. It looked intently at safety, carefully considering modern operations and improved standards, and it found “nuclear power should not be discounted as an energy option on the basis of safety”.

What about waste? Well, this is perhaps the most fascinating aspect; the Scarce report found that radioactive waste was not only something that could be efficiently handled and stored but that SA was perfectly placed to establish a global waste storage industry that would improve world nuclear security and deliver a multibillion-dollar economic benefit.

Scarce recommended the establishment of a “used nuclear fuel and intermediate-level waste storage and disposal” facility. Apart from doing the rest of the world a favour by storing this waste in a stable geological and political environment, calculations concluded this facility could generate a $445bn state wealth fund across 70 years.

The case is compelling, and it is only ever undone by politicking rather than rational arguments. In this case the Weatherill Labor government sought to outsource the implementation to a “citizens jury” and an opportunistic Coalition withdrew bipartisan support, so this promising initiative was killed off. You only have to look at the unsuccessful efforts across more than three decades to establish a national low-level radioactive waste repository to see how irrational and destructive the politics can be around any issue sporting that yellow and black radioactive symbol.

This reminds the Opposition Leader and the Coalition about what they are up against with their nuclear power plan.

Nothing could be clearer than the fact that Australia needs adequate, reliable, low-carbon electricity. All the evidence suggests we will need a mix of technologies but that it cannot be achieved without a substantial injection of nuclear energy.

This has been clear for decades. In 2013 I wrote in Adelaide’s The Advertiser that we could “replace all coal, gas and oil generation with the zero emissions silver bullet of nuclear”. Two years later I wrote about how the first nuclear power station should be at the top of Spencer Gulf, near Port Augusta, “where there is water, transmission lines and engagement with the uranium industry”, adding: “If ever we were convinced the problem (anthropogenic global warming) was dire, a global switch of fixed generation to nuclear would solve the carbon emissions problem over a few decades. This is why the green-left should embrace nuclear.”

In Britain, the US and Europe, former radical environmentalists such as Michael Shellenberger and Zion Lights have embraced nuclear energy because they recognise it is the only way to power a modern economy with energy available to all, without greenhouse gas emissions. It also avoids the large-scale alienation of farmland, forests and coastlines through wind, solar and transmission projects.

Bowen reduced the size of a proposed offshore wind energy site off the Victorian coast by 80 per cent this week because of environmental concerns. This is one victory for local fishing and environmental opponents, but there are dozens of similar battles awaiting – in Port Stephens and the Illawarra in NSW, over offshore wind; north Queensland over wind farms; Goulburn in NSW over solar factories; and central and western Victoria over transmission lines – and many more set to come.

Nuclear energy sited on former coal-generation sites – say, in NSW’s Hunter Valley, Victoria’s Latrobe Valley and SA’s Port Augusta – will not alienate any productive, attractive or environmentally important land and will not require vast new transmission lines.

The intensity of nuclear saves land, reduces additional environmental dilemmas, reduces transmission costs and saves even more resources because plants have lifespans of 75 years or more compared with 15 to 25 years for renewable equipment.

Dutton is doing the nation a great service by bringing this debate to a head. It seems to have been beyond us so far.

The whole anti-nuke vibe is really a boomer thing – a Cold War hangover. Millennials and Gen Z are more relaxed about nuclear because they are technically savvy and concerned about emissions. A debate focused on the facts will favour the Coalition plan if they argue it strongly.

Placed under sustained pressure, some Labor MPs could break ranks in this debate, following the logic of Bob Hawke rather than the inconsistency of Albanese – the powerful Australian Workers Union, underwriter of the Labor Right, has long favoured nuclear energy.

A bonus for the Coalition is that the nuclear argument could play well in the teal seats where there is an eagerness for climate action and a high degree of economic realism.

It is time for Australia to reclaim its energy-rich bounty.
The Australian