Nuclear power is the fool’s gold of energy policy. On the surface, beautiful, but when tested it proves to be a mirage.
Senator Brian Burston (Opinion 31/1) argued nuclear power was a panacea to the current energy policy crisis that would make energy affordable for all.
But even if we could build a nuclear power industry from close to scratch, and even if we could persuade a community to accept a station in their neighbourhood, it would actually increase electricity prices.
Nuclear power is among the most expensive forms of electricity generation.
The UK government is paying the owners of the Hinkley Nuclear Power Station about $200 per megawatt hour (MWh) for nuclear power, indexed for inflation for the next 35 years. By contrast the current NSW wholesale electricity price is about $80/MWh. When you compare cost of alternatives, nuclear loses. The levelised cost of energy is the best way to compare technologies. It accounts for the fact that solar produces electricity about 30 per cent of the time, wind 40 per cent and coal 85 per cent.
The levelised cost of energy of a solar farm is $60MWh and wind is $50/MWh. The cost of nuclear in nations with established industries is between $160/MWh and $270/MWh. To make solar and wind completely reliable, you need to firm it up with back-up sources, usually a combination of gas plants, pumped hydro storage and batteries.
Power companies and government estimates put this cost at $15/MWh.
Wind power made completely reliable will cost Australians about $75/MWh. That is less than the current cost of producing electricity and a third of the cost of nuclear.
The Australian Energy Market Operator has found that the cheapest new energy for Australia is renewable energy backed up by pumped hydro storage and gas.
As the cost of generating electricity makes up 35 per cent of a consumer’s bill, by arguing for electricity produced at three times the cost, Senator Burston is arguing for a consumer’s electricity bill to be 70 per cent higher. Labor’s policy of supporting a national energy guarantee has been overwhelmingly supported by the energy industry, unions and environment groups. It will deliver 50 per cent renewable energy in a planned way that ensures electricity is as cheap as possible and reliable.
Independent modelling predicts that the 50 per cent renewable plan will lead to wholesale energy prices being 25 per cent lower and the creation of 71,000 jobs from construction through to maintenance.