27 June 2024

The Sydney Morning Herald (Australia)

Dutton’s nuclear gamble puts everything on the line – except the details

Peter Dutton has bet the Coalition’s electoral future on nuclear power. But will it be a triumph, or an electoral suicide note akin to John Hewson’s Fightback?
Source : The Sydney Morning Herald: Dutton’s nuclear gamble puts everything on the line – except the details https://www.smh.com.au/politics/federal/dutton-s-nuclear-gamble-puts-everything-on-the-line-except-the-details-20240620-p5jng0.html

by Nick O’Malley and James Massola • 22 June 2024

After a press conference to announce the Coalition’s dramatic new nuclear policy, shadow treasurer Angus Taylor ran into a group of reporters hopping into a lift.

“That was bold,” one reporter said.

“Well, we are bold,” Taylor said. “Look at the Voice.”

Bold is one word to describe Peter Dutton’s decision to pursue nuclear power – one of the most ambitious policy decisions by a federal opposition in decades.

It could prove to be a triumphant move, or the ruin of the federal opposition.

Dutton has gambled the Coalition’s electoral future on a plan that would overturn its traditional role in the political economy, remake the Australian energy system and reverse course on its efforts to meet near-term climate targets set in law.

How much would it cost? Ask later. Had the owners of the sites, the communities around them or even the state governments been consulted? Apparently not. Had the cost of the energy this new system might one day produce been modelled? Not as such. What about nuclear waste? We will get to that.

But bold has worked before.

Dutton demonstrated in the Voice referendum that a distinctive political position argued forcefully by a disciplined and unified team can be devastating. It is also true that Dutton helped demolish the government in that competition of ideas by demanding daily, “show us the detail”.

This week’s Resolve Political Monitor shows people are listening. Voters now give Dutton an edge over Prime Minister Anthony Albanese on key measures of personal performance as they turn against the government on the economy. Labor’s primary vote has dropped to 28 per cent, and Dutton has gained a narrow lead as preferred prime minister, backed by 36 per cent of voters compared with 35 per cent who favour Albanese.

Not since John Hewson launched his 650-page Fightback! economic manifesto in 1992 has an opposition leader promised such a bold policy, though Bill Shorten’s proposed changes to capital gains, negative gearing and franking credits went close.

But there is one key difference: Hewson and Shorten both offered detailed costings and relatively feasible timelines for their policies.

Dutton, in contrast, has not: the absence of costings or modelling for his plan to build up to seven nuclear power plants across mainland Australia was glaring on Wednesday, while the timeline for the first plants to come online, either 2035 or 2037, is hotly disputed by at least some experts.

Gone, too, is the commitment to meeting Australia’s emissions reduction target of 43 per cent by 2030, which is surely a losing stance in the formerly Liberal and now teal-held seats in major cities.

Dutton explained away the absence of detail by claiming the government’s planned rollout of renewables and transmission lines would cost $1.2 trillion to $1.5 trillion, promising his plan “will be a fraction of the government’s cost”, criticising “rich green millionaires” who back the renewables transition and arguing “the focus today is on the sites”.

“We’ll continue to work with experts in this field, to identify the best technology for those sites. This is a huge win for these local economies,” he said.

The Coalition argues it is not anti-renewables – it will announce policies closer to the election to expand the use of gas in the generation of power, as well as programs to boost the takeup of household solar and batteries.

But with an election due in less than a year, major investors in large-scale renewables were immediately spooked by Dutton’s announcement.

This week’s news of the preferred nuclear sites – Lithgow and the Hunter Valley in NSW, Loy Yang in Victoria’s Latrobe Valley, Tarong and Callide in Queensland, Collie in Western Australia and Port Augusta in South Australia – marked the next stage of Australia’s climate wars.

At issue now is not whether climate change is real (though a few Coalition backbenchers would disagree) but, rather, how to de-carbonise Australia’s electricity grid in the most efficient, cheapest and most reliable way possible.

And while Dutton’s policy gamble may look crazy-brave to some, the opposition leader – who has been in parliament since John Howard was prime minister and has eight staff who once worked for Tony Abbott, one of the most effective opposition leaders in living memory – is pursuing a deliberate strategy.

Dutton believes the policy will keep the climate change sceptics and believers in his party united; that it gives him a key point of difference with Labor on energy and climate; that it allows him to argue he is taking action on climate change; and which even offers up a catchy, Abbott-esque slogan for the next election. In place of “stop the boats” and “axe the tax”, think “don’t let the lights go out under Labor”.

Along with making housing more affordable and tackling the cost of living, cheaper power prices will be part of the three-pronged attack on Albanese and Labor.

Dutton’s decision to back nuclear could be the moment that propels him to the prime ministership. Or, as one of his colleagues says, “we could be standing there on election night losing seats and thinking, ‘that was a doozy’”.

The decision to adopt nuclear power has been widely welcomed by the Coalition party room; derided by Albanese and Labor as a “fantasy” that had “fallen apart in 24 hours” because of a lack of detail; shunned by most state premiers and opposition leaders; provoked some “not in my backyard” criticism from NSW state Nationals MPs and criticised by the MPs who hold those teal-seats.

But it might succeed because as Abbott, Paul Keating’s successful campaign against Hewson’s Fightback!, and the Voice referendum proved, an effective negative campaign can work to devastating effect. Labor will underestimate Dutton at its peril.

And Labor has a tightrope to walk, too – as the Coalition has pointed out – because campaigning about the dangers of nuclear power, while supporting the AUKUS nuclear-powered submarines and seeking to hire more submariners for the future boats could send a contradictory message.

One of the issues most often raised about nuclear – whether it is safe – is dismissed by former chief scientist Alan Finkel, a supporter of both nuclear power and renewables. He stresses his views are not political commentary, but points out that statistically, nuclear is as safe as solar and wind power, with an average of about 0.05 deaths per terawatt hour produced, compared with 1.5 deaths for hydroelectricity and more than 20 for coal.

“The nuclear industry is highly regulated. There is a sword of Damocles fear about it, so in all the countries that are nuclear like France, the UK, the US, Canada, there are very sophisticated regulatory systems. Australia would not be a cowboy country, we would be extremely careful, too,” he says.

From here, the sales job gets harder because the Coalition will have to (eventually) put a price on its plan. The CSIRO’s GenCost report released earlier this year found electricity generated from renewables such as solar and wind was cheaper, even allowing for the construction of transmission lines, while the cost of the first nuclear plant would be about $16 billion, though it could then fall to around $8.6 billion.

Asked if it would be possible to build seven nuclear power plants across Australia to begin coming online from 2035, Mycle Schneider, a Paris-based nuclear policy analyst, is sceptical at best.

“It is not only a question of economics, it is a question of industrial feasibility”, said Schneider, who co-ordinates the annual World Nuclear Industry Status Report.

“Australia doesn’t have a nuclear power reactor building industry, so it would mean an international call for tender. So who are the possible suppliers of large reactors?”

Schneider runs through five companies that have directly or indirectly built large-scale reactors over recent decades.

One is Rosatom, the Russian state nuclear power corporation, which Schneider notes is currently collaborating on the illegal occupation of a nuclear power plant in eastern Ukraine. Another option is the Chinese state corporations currently blacklisted by the US government.

Then there is Westinghouse, whose AP1000 plant was cited positively by Dutton during his press conference on Wednesday.

“We’re not proposing to have a bespoke built arrangement,” he said.

“We want to rely on the international experience. We don’t want to be the purchaser of the first in class or have an Australian-made technology, we want to rely on the Westinghouse AP1000, which Poland’s just signed up to.”

Schneider notes that Westinghouse was driven into bankruptcy for a period in 2017 and 2018 by cost overruns associated with its construction of AP1000 reactors in the US states of Georgia and South Carolina. So scarred was Westinghouse by this experience that it declared it would no longer take on reactor construction, The Wall Street Journal reported earlier this month.

Another potential developer is South Korea’s KEPCO. It built the first commercial nuclear power plant in the Arab world, the Barakah nuclear power plant in the United Arab Emirates, which was commissioned in 2009 and began commercial operation in 2021.

Critics counter that as an autocracy, the UAE can more easily fast-track contentious developments. Schneider also has financial concerns, noting that KEPCO was in November carrying $US154 billion ($231 billion) of debt.

Finally, there is the French company EDF, which builds and supplies a model called the EPR reactor, two of which are being built in the United Kingdom and are behind schedule. The so-called Hinkley Point C development was originally due to be completed by 2017, but may not be finished until 2031, at a cost of up to $66 billion, around twice the original estimates. Finland last year switched on another EDF reactor, Europe’s largest. It was due for completion in 2009 and cost around three and a half times the original sticker price.

And then there is the question of SMRs, or small modular reactors, which Dutton has suggested could operate at sites in South Australia and Western Australia by 2035. SMRs produce less power but have a much smaller footprint and ideally could be built in factories off-site to cut costs.

Dutton’s energy spokesman, Ted O’Brien, says a small reactor under development by a company founded by Bill Gates could potentially produce 470 megawatts from a footprint of 2 hectares, compared with the 4000 hectares needed to produce the same amount of energy from solar.

The problem, Schneider says, is that SMRs don’t yet exist commercially and Gates’ company has neither a licensed design nor a commercial contract.

Schneider questions whether policymakers have lost touch with just how difficult rolling out nuclear will be, arguing the process to date “reflects total ignorance of the huge legal, technical, logistical, training, manufacturing and other challenges preceding electricity production by a nuclear power plant”.

But Finkel, the former chief scientist, argues that Australia should not be putting all its eggs in the renewable energy basket and that nuclear is also a good option because it is dispatchable 24 hours a day and has a small footprint compared to solar and wind farms.

He cautions that, despite the Nationals calling for a moratorium on large-scale renewable development, “we would have to keep renewables rolling out over the next 15 years while we get nuclear going”.

And therein lies one of the biggest problems for Dutton – that lack of precise detail.

To convince Australians to back nuclear power, Dutton has a mountain of work to do. If he fails, his nuclear gamble will be consigned to the same cupboard where Fightback! is gathering dust.