Bleeding Obvious: New-Nuclear Offers Best Hope For Reliable & Affordable Power

Nuclear works: all day, every day, whatever the weather, no need for batteries and no need for back up. Whereas, wind and solar … well, you know the rest.

Incapable of delivering power on demand, the only ‘benefit’ claimed by the wind and sun cult is that wind and solar power purportedly eliminate carbon dioxide gas emissions. But that takes more than just a little self-deception, given the amount of CO2 generated to create every single solar panel and wind turbine. Not to mention the fact that every MW of wind or solar capacity is (almost uniformly) backed up by coal coal-fired plants – or gas, diesel or kerosene used in cheap to build but expensive to run fast-start peaking plants.

Nuclear plants don’t need backup and they don’t generate carbon oxide gas emissions while generating power, around-the-clock.

In a country like Australia – which is awash in both coal and uranium resources – the shift from coal-fired power to nuclear is inevitable. Principally because coal has been demonised as the key source of human-generated carbon dioxide gas.

The old guard don’t like it, and STT cops our fair share of criticism from the characters who argue that the simplest solution to Australia’s energy crisis is to build new coal-fired plants and refurbish the existing plants.

True enough, coal-fired power is the cheapest and most reliable of all the generating systems available in Australia. However, those that argue that corner fail to recognise that the climate cult and its followers will be with us for generations to come, and will continue to dominate the political sphere the foreseeable future. And that’s where nuclear power generation comes in.

Ben Beattie – an electrical engineer in the power and gas sector – points out (correctly) if Australia wanted to enjoy affordable power (as it did for generations) it would throw everything it had behind coal-fired power generation and ditch wind and solar, altogether.

Ben concedes (equally correctly) that there is absolutely no prospect of an Australian government advocating for policies that reject the mantra that human-generated carbon dioxide gas is ‘toxic pollution’ that must be reduced to avoid a ‘climate catastrophe’ – at least not in the short-term.

And with that in mind, Ben concludes (also correctly) that new-nuclear plants built and owned by the Federal Government offer Australia its best hope for reliable and affordable power, in future.

Yellow cake road – why Dutton’s nuclear plan is an ‘okay’ idea
The Spectator
Ben Beattie
24 July 2024

‘The future of our country is incredibly important, we need to have a plan…’ Peter Dutton, June 19, 2024

And with that nuclear policy announcement, Peter Dutton broke the paralysis in Australia’s energy debate. While I believe Dutton’s proposal is necessary, please don’t misunderstand me – our electricity market is so dysfunctional there are almost no good options available to us. The glimmer of sanity behind a state-owned nuclear power company is the best shot we have at a low-cost, secure energy future. Even though the lowest cost option would be a full-scale unapologetic return to coal, wishful thinking won’t make it happen, and wedging the emissions zealots with nuclear is a fine political strategy.

To understand why an expensive taxpayer-funded jaunt down the yellow cake road makes a kind of sense, we first must understand our diabolical starting position and the implications for the next few decades.

The private sector cannot save the electricity system – they never really had a chance. We must face the reality that government, with its low cost of capital, long investment horizons, and more importantly a mission to reset the electricity system to one dominated by predictable and reliable baseload generation, is the only logical path to low-cost retail electricity. There is no path to lower electricity bills from a system dominated by intermittent, unpredictable, small, widely distributed, short lifespan, asynchronous devices.

Rooftop solar, designed from the start as an inequitable wealth transfer, continues to steal market share from all grid generators – not just coal. Rooftop solar, the largest electricity source on the grid and with none of its capacity responsive to market signals, creates periods of abundance and scarcity. This volatility in both supply and price damages the economics of all other generators, while creating opportunities for a few batteries to generate revenue from the arbitrage – the difference between paying to charge and being paid to discharge.

Regardless of policy, all this rooftop solar will hang around for decades, its output slowly fading. But even as the rampant growth of rooftop solar installations is declining, overall capacity is still increasing – almost nobody removes panels from their roof, and new roofs are always being built.

Large-scale wind and solar is less of a problem in most states, South Australia excepted, because there’s much less of it and it can be turned down – curtailed – by the system operator. With market share constantly whittled away by rooftop solar, and increasing periods of oversupply, flattering power contracts will be rare and project finance harder to obtain.

Enter Chris Bowen’s Capacity Investment Scheme, making taxpayers the buyer of last resort by guaranteeing minimum revenue for all generators, mocking market signals and consumer bills. Too many developers earning too much revenue means the cost of electricity supply will spiral.

Construction of an extra 10,000 km of new transmission has commenced, but that’s just what’s flagged in the central planning boondoggle that is the Integrated System Plan. The states are doing their own thing, all of it adding cost. AEMO CEO Daniel Westerman, on the market operator’s very own podcast, says that ‘free electrons’ make all that spending on transmission a bargain for consumers. Polite adjectives fail me.

How does Peter Dutton’s federal nuclear plan turn all this around? A nuclear policy does not deal with the rooftop solar problem. Neither does removing the subsidies and charging panel owners for exports. The latter is a state government decision anyway, with the Labor states unlikely to be influenced by the LNP feds. And yes, it is true to say that if market share is a problem for a coal plant, it is the same problem for a nuclear plant (it’s actually a bigger problem for wind and solar, but the advocates don’t talk about that).

Herein lies the biggest reason for government intervention in our electricity market. Very few developers will build wind and solar without subsidies, but nobody will build a baseload generator forced to ramp down every day to make room for rooftop solar. Nobody except a government willing to draw a line in the sand to force long-term baseload generation back into the grid.

[Note to Ben: we suggest that you take a look at this post – Safe, Ever-Reliable & Affordable Nuclear Power Perfect Solution to Any Energy Crisis – in which STT deals with the scheduling and dispatch of wind and solar into the NEM, which are treated as ‘semi-scheduled’ allowing them to dispatch when the wind is blowing and the sun is up, but suffer no penalty when they fail to deliver, unlike conventional generators. If those rules are returned to what they were in 2008, the problem would solve itself.]

There is little doubt the remaining coal plants will have their hands out for taxpayer support to see out their useful lifespan at reduced output. It will be necessary to prevent private coal-fired power stations closing and forcing up wholesale prices. Yes, this is a subsidy, but the alternative is darkness or a lot more gas power. Recall what was said when announcing the Eraring closure – they’d fill the gaps with gas for ‘days and weeks’.

Ironically, a huge taxpayer spend on nuclear power will cost consumers far less than the alternative. Even if taxpayers fork out to keep some of the remaining coal plants online for another 15 years (or buy them cheap…), the savings to consumers will be immense. Remember that prior to commencing the ill-fated Snowy 2 project the federal government bought Snowy Hydro from the NSW and VIC state governments for around $6 billion. That would buy a lot of coal plants these days.

Separate and in parallel to the nuclear plan, the unnecessary and immensely expensive transmission build needs to be halted. That alone will save tens of billions of dollars being recouped from consumers over the next few decades. A few thousand hectares of koala habitat, and (too few) well-meaning tree-hugging hippies, will all breathe a sigh of relief. How would the feds do that? The most honest way might be to challenge the transmission approvals in court, exposing the accounting that supposedly shows consumer benefits from the large increase in electricity costs.

Without the new transmission, plans for large-scale wind and solar will evaporate. But then watch rogue states gleefully take up the spending challenge while trumpeting ‘climate denier’ tropes at their critics, faithfully repeated by the renewables lobby clamouring for more handouts. At least the states have less money to throw at transmission projects.

Finally, the grid will always need gas, and expensive gas means expensive electricity. While increasing the baseload fleet will fill some of the supply gaps caused by wind and solar, we will need gas peakers for decades, perhaps forever. Securing cheap gas must be a government priority. There are still plenty of activists calling for a domestic gas reserve on the Queensland LNG projects, policy that should have been implemented from the start.

The risk of implementing a domestic gas reserve (arbitrarily curtailing gas exports) at this late stage, is that if the US under re-elected President Trump returns to energy dominance, global gas prices will fall significantly anyway. If the LNG majors are faced with the final decade of LNG plants running at a loss due to a poorly considered reserve scheme, early closure could be the result. This would be a devastating scenario for central Queensland following the almost certain exit of Gladstone power station and the associated Boyne Island smelter in the same period.

So there you have it – the gloomy recipe for cheaper electricity, maybe 20 years from now: more baseload generation, no new transmission, more cheap gas.

Is Dutton’s plan perfect? No.

Is it free of risk? Not at all.

Will it cost taxpayers? Absolutely.

Are there any better ideas? Rejecting emission reduction policies entirely, but which government has the guts?
The Spectator