Australia – Our energy transition (including nuclear) in context.
Photo credit - Photo by FolioArtist on depositphoto.
Australia is currently facing a changing (and challenging) energy landscape, where the demand for electricity is on the rise due to economic growth and the shift towards electrification in various sectors.
Despite our increased use of renewable energy solar and wind, we still have a challenge balancing supply and demand, especially given the variable nature of these resources.
Here are the key points to consider.
Our Current Energy Landscape
Growing Demand: Australia's electricity demand is increasing, driven by economic growth and the electrification of various sectors.
Renewable Energy Growth: Australia has seen a significant increase in solar and wind energy production. This shift poses challenges in balancing supply and demand due to the variable nature of these sources.
Grid Stability: Maintaining a stable electricity grid is crucial. The fluctuating generation from renewables requires a balance that may not necessarily be met by traditional baseload power sources like nuclear.
In our system in Australia, the amount of energy being generated and supplied must equal the amount being used. It has to remain balanced. If it gets out of balance, this results in issues with frequency and grid stability and eventually ends up damaging grid hardware and having blackouts.
Economic Considerations
Cost of Nuclear: The capital costs associated with building nuclear plants are high, compared to renewable options. Even though nuclear can provide reliable baseload power, the costs of construction and maintenance make it less competitive than renewables and gas in today's market.
Dispatchable Power: While nuclear can theoretically be used as a dispatchable source of power, its economic viability diminishes when considering the need for it to ramp up or down quickly in response to demand fluctuations.
Technological Factors
Alternative Technologies: Other technologies, such as gas with carbon capture, pumped hydro storage, and battery storage, may provide cleaner and more flexible options for meeting energy demands.
Small Modular Reactors (SMRs*) There is ongoing interest in SMRs, which promise lower costs and easier deployment. However, they are not yet a practical solution and require further development and regulatory approval.
Regulatory and Infrastructure Challenges
Lack of Nuclear Infrastructure: Australia does not currently have a nuclear power industry, regulatory framework, or waste management capabilities. Establishing these would require significant time and investment.
Expertise: The absence of local expertise in building and operating nuclear facilities poses a barrier to developing a nuclear energy sector.
Environmental Implications
Carbon Emissions: Nuclear energy is a low-carbon option, but its impact on reducing emissions in the short term may be limited, given the time required to develop the infrastructure.
Water Usage: Nuclear plants require substantial water for cooling, which could be a concern in regions facing water scarcity.
Conclusion
A balanced way to handle growing energy demands and ensure grid stability could be to integrate using renewable energy with enhancing grid connections, incorporating energy storage, and adjusting energy use during peak periods.
While nuclear energy presents a reliable low-carbon option, the current economic landscape, regulatory challenges, and availability of more cost-effective renewable technologies make nuclear less favourable for Australia at this time.
A report just out from the Academy of Technological Sciences & Engineering (ATSE) suggests:
SMRs* are still in early development, with a mature market expected by the late 2040s;
there is a lack of reliable information on operational prototypes, raising concerns about their technical and financial viability; and
their commercial viability remains uncertain.
References:
IAEA: https://www.iaea.org/newscenter/news/what-are-small-modular-reactors-smrs
Nanuk: Nuclear energy in Australia – July 2024 presentation
ATSE: Small Modular Reactors – The technology and Australian context explained 24 July 2024.
* SMRs are advanced nuclear reactors which have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors.
Next steps:
If you have questions relating to sustainability and energy investments, call us for a quick chat or drop us a line.
Want to get ethical?
We’ll help assess your intended investment against your priorities. We’ll work through what ethical mean to you, and how the companies you’re interested in manage environmental, social and governance issues (ESG) in their business.
Get our Guide to Ethical Investment with everything you need to get started
Stay on top of your finances
Getting your finances in order is one thing. Staying on top of them is something else again. A change in government policy, new legislation or amended regulations can have a powerful impact on how your finances are structured.
Subscribe to our regular newsletter to stay up to date with all the latest developments and changes.
Uncertain what to do next? Got questions?
Get certainty, direction and answers. Contact us now to talk through any issues you’ve got.
Together, we’ll get your money doing what you care about.