Australasian Science: Australia's authority on science since 1938

Energy Future Needs a Portfolio Approach

By Martin Thomas

Nuclear options must be part of the low-carbon discussion.

Pressures are growing internationally to develop low-carbon energy resources, technologies and policies. Australia simply cannot rely on clean coal, wind, solar and geothermal technologies alone to meet its policy objectives of securing affordable energy to drive its industries, businesses and homes.

A rational portfolio approach that takes account of all realistic available national and regional energy resources is essential. To do otherwise would be unwise.

Australia’s energy portfolio for 2030 and beyond will include an economically appropriate and socially acceptable mix of advanced fossil fuel technologies – coal, oil, gas and carbon capture and storage – as well as renewables such as geothermal, biomass, solar, wind and ocean energy, depending on the location in Australia. This is to be encouraged.

But Australia must keep all its energy options open, not just those with apparent popular support. This means putting nuclear energy on the discussion agenda – now.

The government’s draft energy white paper makes limited mention of nuclear power for low-emissions base-load generation – apart from its possible application should other technologies fail to meet energy market demands ahead, in which case the deferred lead time becomes too long to contribute meaningfully to Australia’s needs. This lead time could be 15–20 years due to Australia’s lack of the necessary infrastructure – legislation, regulation and technical expertise. The economic and environmental consequences could be substantial. It is unlikely that declared carbon reduction targets of 80% by 2050 could be met.

This lead time could be significantly shortened if community support is established ahead of the necessary infrastructure, regulatory and skills platform. The nuclear option, if needed, would thus be available in time to alleviate the industrial, commercial and political consequences of inadequate, affordable base-load power and failure to meet declared emission goals.

Nuclear power, which is currently generating 14% of the world’s electricity, needs serious consideration as a component of the national generation portfolio of 2030 and beyond. Australia is already the third-largest exporter of uranium, ironically to countries from whom carbon credits may well be purchased to meet domestic commitments. Australia already contributes significantly to international bodies working on the safe and efficient use of uranium, the safe disposal of radioactive wastes and the non-proliferation safeguards regime.

Nuclear power is the only large-scale, commercially proven, low-emissions technology currently available able to deliver a substantial proportion of Australia’s base-load power demand, at appropriate cost, within 10–15 years. Despite the tsunami tragedy of Fukushima, it still remains extraordinarily safe.

Australia faces other key policy and investment issues in facilitating moves to low-carbon energy.

Consistent regulation: Consistent national regulation is crucial. Complex and often inconsistent frameworks – a legacy of state-based legislation – create barriers to national energy resource development and imply needlessly large implementing bureaucracies.

Technology review: To cover gaps in the broad range of economic and technological review skills available to government from its departments and agencies, a properly qualified independent technology advisory body should be established to monitor, review, evaluate and periodically report on the potential of existing and emerging energy technologies for Australia.

Carbon pricing: Carbon pricing is a necessary policy step, but the projected price and proposed funds allocation cannot support large-scale demonstration plants. Current grants-based programs struggle to deliver outcomes while government funding is insufficient to offset perceived levels of inherent financial, technical and market risk. Alternative approaches are needed to fund those demonstration projects critical to Australia’s secure energy future.

Emissions reduction: The government should reconsider its reliance on carbon pricing for emissions reduction rather than establishing emission standards or carbon capture and storage standards for future coal-fired generation investment. Without demanding emission standards there is a real risk that generators will find it more economic to buy low-cost carbon credits on the international market rather than invest productively in low-emission technologies.

Community support: Informed community understanding and support for new energy resources and technologies is crucial. Without a “social licence to operate”, sound commercial projects in the national interest will not eventuate. Governments need to sponsor and encourage effective community engagement.

Investment planning: Consistent long-term national policies and incentives are essential if the billions of dollars needed for new energy infrastructure annually are to be attracted from highly competitive international markets.

Mr Martin Thomas AM FTSE HonFIEAust chairs the ATSE Energy Forum and is chair of Energy Technologies Limited and Dulhunty Poles Limited. He was a former Principal of Sinclair Knight Merz and a member of the 2006 Uranium Mining, Processing and Nuclear Energy Review.