Wednesday 22/11/2006 Page: 10
Wendy Frew Environment Reporter
TAXPAYERS could be forced to subsidise the nuclear energy industry to the tune of several billion dollars as well as facing higher electricity prices, to get the industry up and running in Australia, energy experts say.
A Federal Government commissioned report published yesterday underestimated the current operating costs of nuclear energy, and put too low a price on the carbon pollution generated by coal-fired power, critics said. Alternative forms of energy will only be able to compete with coal if coal pays for its greenhouse gas pollution.
But a carbon price at least double that recommended by the taskforce, which was headed by the former Telstra boss Ziggy Switkowski, would be necessary if nuclear power was to compete with coal, said Mark Diesendorf, a lecturer at the Institute of Environmental Studies at the University of NSW. On top of that, it was likely extra government support would have to be offered to private companies to encourage it to invest in the industry, a point even the taskforce conceded in its report.
"The difference between me and Mr Switkowski is that I don't think nuclear power will get up even with carbon pricing ... I don't think it could compete with coal on a price of $40 a tonne of carbon," Dr Diesendorf said.
Based on Massachusetts Institute of Technology research, the Sydney academic has estimated construction of a 1000-megawatt nuclear reactor would cost about $3 billion. That does not take account of the cost of insurance, storage of highly radioactive waste and its eventual decommissioning.
In his report, Dr Switkowski said nuclear power would be between 20 and 50 per cent more costly to produce than coal or gas-fired power.
"This gap may close in the decades ahead, but nuclear power and renewable energy sources will only become competitive in Australia in a system where the costs of greenhouse gas emissions are explicitly recognised," the report said.
"Even then, private investment in the first-built nuclear reactors may require some form of government support or directive." It said nuclear power plants were initially likely to be 10 to 15 per cent more expensive than in the US because Australia had no nuclear power construction experience or any physical or regulatory infrastructure.
Studies by the Massachusetts Institute of Technology and the University of Chicago showed the industry would also initially suffer from what is known as "first of a kind" costs common in complex engineering projects and initial learning curves. However, the report dismissed those costs.
A campaigner with the Australian Conservation Foundation, Dave Sweeney, agreed the taskforce's calculations were unrealistic. "We welcome a carbon price, but on this basis [$15-$40 a tonne of carbon] I don't think that it will be significant enough to cover all the costs associated with nuclear power, and that is reflected in the report itself, which says the first plants in Australia could not be built as cheaply as they could be built in the US, and would need additional measures to kick start them.
"This is saying very clearly that if nuclear power is pursued in Australia the public purse will have to be open a very long time." A campaigner with Friends of the Earth, Jim Green, said the Switkowski report's estimate that nuclear power was now up to 50 per cent more expensive than coal or gas-fired power was optimistic.
A recent Victorian Department of Infrastructure report had found that nuclear power was twice as expensive as coal-fired power, Dr Green said.
The Drawbacks
- Insurance companies will not take on the risk associated with nuclear plants, forcing governments to act as underwriters.
- The cost of cleaning up Britain's ageing nuclear facilities stands at £90 billion ($222 billion).
- A carbon price of about $35 a tonne would make wind power competitive with coal.
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