Industry Super Australia (ISA) hitches its wagon to the nuclear unicorn
Industry super urges Australia to consider the nuclear power option https://www.abc.net.au/news/2019-06-26/industry-super-funds-consider-the-nuclear-option/11248202, The World Today By senior business correspondent Peter Ryan 26 June 19
Nuclear reactors should be considered as a realistic option to confront Australia’s deepening energy crisis, according to a study from industry superannuation’s chief lobby group.
Key points:
- Industry Super says Australia should “build some capacity to operate a nuclear facility”
- The report says nuclear is often dismissed as “even more immoral than burning coal”
- It suggests a future energy mix including solar, wind, gas, coal and carbon capture
In a report that raises concerns about the ability of battery technology to maintain the baseload power, Industry Super Australia (ISA) argued that investment in nuclear energy should not be sidelined simply because of its controversial nature.
“If you look at the output of the nuclear industry, and if you consider its future relative to other technologies, it looks awfully good relative to some of the other potential technologies and therefore it shouldn’t be excluded from consideration,” ISA’s chief economist Stephen Anthony told The World Today.
Nuclear power the ‘ugly duckling’, batteries too costly
In addition to nuclear, the report argued technologies such as solar, wind, coal, gas generation and carbon capture and storage need to be considered.
The study also raised concerns about battery schemes, finding that using Tesla batteries to achieve 1.5 days power backup would cost $6.5 trillion, or the cost of building around 1,000 nuclear reactors.
It warned that generating power for a renewable energy system in the same period would require 100 Snowy Hyrdo 2.0 schemes at a cost of $700 billion.
In a discussion paper released today, Industry Super Australia acknowledged that investing in the nuclear option would raise concerns among environmental groups, particularly because of accidents in recent decades such as Chernobyl, Three Mile Island and Fukushima.
The report refers to research saying “nuclear power is now the ugly duckling of the power generation industry. People somehow dismiss it as immoral, even more immoral than burning coal”.
‘Something has got to give’
ISA chief economist Stephen Anthony told The World Today there was a case for industry fund intervention given the energy policy stalemate from Canberra.
“While the climate debate rages on, Australia’s ageing infrastructure continues to fall further and further behind the rest of the world,” Mr Anthony said.
“If this policy inertia continues, regulatory uncertainty will continue to rise, allowing some investors to capitalise on price movements and maximise public subsidies to game the market.
“Something has to give and this is where industry super funds come in.”
The study found that cashed-up industry super funds are ready to invest in energy infrastructure but are waiting on policy direction from the Federal Government.
“The lack of a genuine, long-term, technology neutral energy policy is a major factor undermining fund investment,” the report concluded.
In the normal course, portfolio investors would be lining up to fund long-term solutions in this changing industry for Australia. But so far, the silence from investors is deafening.
“Right now, it seems the only politically acceptable investments appear to be relatively small scale, quickly deployed renewable wind or solar projects.”
The Australian Energy Market Operator estimates that about 60 per cent of current coal-fired generation capacity will be retired by 2040.
“The reality is that, even without climate change, the existing fleet of base load generators needs replacing,” the report noted.
The report excludes a range of technologies from the mix of energy options, including biomass because of its high emissions intensity, and it dismisses tidal and wave power as unrealistic because of the cost and scale required.
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