The nuclear option as part of a diverse energy mix. Submitted by ANSTO to the Department of Resources, Energy and Tourism

Transcription

1 The nuclear option as part of a diverse energy mix Submitted by ANSTO to the Department of Resources, Energy and Tourism June 2009

2 Contents 1 Summary of submission Outline of the submission The Motivation for a change in approach Providing generating capacity to meet expected growth in Australian electricity demand The urgency of moving to low carbon technologies Comparison of carbon dioxide emissions from various generating technologies Australian situation Australia s choice of generating technologies Australia s contribution to global warming Technology maturity Issues raised against use of nuclear power Social acceptability Safety, waste, proliferation and decommissioning Economics Externalities of Power Generation in Australia Financing of nuclear power The situation in 40 years time Conclusions Contact for more information: Dr Ron Cameron Executive General Manager Strategy, Government & International Relations Ph: (02) ron.cameron@ansto.gov.au 1

3 1 Summary of submission Growth in energy demand and associated GHG releases remains a major challenge for Australia, with annual growth of 2-3% for electricity expected and GHG emissions close to the highest per capita in the world. In this context, major efforts are needed to provide reliable, affordable electricity in a low carbon manner. The magnitude of the energy supply challenge, both globally and nationally, requires a wide range of solutions and both available and future technologies should compete on their merits. The problem is sufficiently serious that all technologies should be under active consideration, even if these do not eventually meet the criteria for adoption. One key issue is maintaining electricity supply in a manner that meets both normal and peak demands (daily and seasonal), taking into account the nature of the generating capacity and the balance between intermittency and baseload. Clearly, many alternative means exist for providing the required supply. Some have very high costs and others require technologies that are in development and may not be mature for many years. Restricting the options to provide supply and diversity without full examination could negatively impact achievement of goals, trade and productivity. The chosen mix must also satisfy the requirements for carbon and other pollution reduction. In this connection, it must be noted that although coal and gas have high availability, they are also major sources of GHG emissions. In comparison, nuclear power is an established technology, which provides security of supply in that its price is essentially independent of fuel costs and carbon pricing. Many countries already use it as a baseload technology with high availability, high safety and predictable performance. In this report we conclude that: 1. Energy demand globally and nationally will continue to increase, and this increase cannot be stopped without denying countries the right to economic prosperity or maintenance of their standard of living. 2. There is an urgent need to act on reducing GHG emissions, and a range of technologies will be needed to address this concern. 3. Unmitigated coal will continue to be the prime source to meet the majority of the world s demand unless global action is taken on energy and greenhouse issues. 4. Many countries are coming to the conclusion that nuclear power plants represent a mature available technology that has essentially zero GHG emissions during operation. 5. Nuclear power is increasingly competitive in many countries and is likely to be so in Australia when the price of carbon is appropriately recognised, even without accounting for externalities. 2

4 6. Far from being competitors, nuclear power and 'new renewables' are urgently needed as partners if the world's immense clean energy needs are to be met. For example, high temperature materials research and development underpin both nuclear and high temperature solar technologies. 7. While the capital cost of nuclear power is currently high, it has low operating costs and is largely unaffected by fuel costs. It represents a secure means of electricity supply into the future as current nuclear plants have operating lives of years. 8. Many other promising technologies are under consideration, but none are currently at a large enough scale to satisfy the requirement to act quickly. 9. Diversity of supply, however, remains a key issue, and research should continue on a range of options for providing the energy that Australia needs. These should be examined in terms of their impact on the grid, the reliability of supply and their low carbon characteristics. 10. Given the nature of the problem, nuclear power should be under active consideration as an option in Australia s future energy mix. This consideration should include both current and new generation reactors. 11. Nuclear power is often tarnished by objections that are based on issues that are now being effectively addressed. 12. There is increasing evidence that nuclear power is being seen by industry and the public as a necessary part of a diverse energy mix. This report was produced by ANSTO staff with expertise in nuclear technologies and global nuclear developments, and incorporates work from consultants in energy issues. It also relies heavily on information produced by international organisations and national assessments performed in OECD countries. 3

5 2 Outline of the submission Availability of affordable, reliable energy remains the foundation for economic growth and social well being. The challenge facing governments is how to ensure that availability in a manner that provides secure and clean energy while reducing carbon dioxide emissions. This is the challenge of balancing growth with environmental responsibility. Globally, it is increasingly recognised that last century s trend in energy supply is unsustainable. Electricity generation accounts for about 27% of global anthropogenic CO 2 emissions and is by far the largest and fastest growing source of greenhouse gases. In all the analyses performed by international agencies (e.g. the OECD International Energy Agency (IEA)), unmitigated fossil fuel use will inexorably rise to meet energy demand unless governments energy policies change worldwide. On current policies, world carbon dioxide emissions from electricity generation are projected to increase by 67% over the period , mostly driven by the continued use of coal. China and India alone account for 60% of this increase in emissions. China built 105GW of new coal-fired power capacity in 2006 (at an average rate of around one new 1GW power station every four days) 1, which is twice Australia s total electricity capacity The IEA analysis indicates that projected global carbon dioxide emissions will reach 40 billion tonnes by 2030, unless mitigation measures are implemented. Under these business-as-usual scenarios, economic and population growth, primarily in the developing regions, will lead to a global increase in the demand for electricity by about a factor of 2.5 by 2050 (NEA) 2. Growth in energy demand and associated GHG releases is also occurring in Australia, with annual growth of 2-3% for electricity expected and GHG emissions close to the highest per capita in the world. In this context, major efforts are needed to provide reliable, affordable electricity in a low carbon manner. Many countries are taking action. For example, in the UK Energy White Paper 3, the government indicated a strategy to: save energy; develop cleaner energy supplies; and secure reliable energy supplies at prices set in competitive markets. This strategy involved binding targets for GHG reductions and an expanded role for nuclear power as part of the energy mix. In an Australian context, the weight to be given to the various factors differs from those in other countries. However, in all countries good characteristics of a national energy mix are diversity of supply, low carbon production and security of supply in an affordable manner. Nuclear power satisfies these characteristics. It should be considered as an option in a well balanced and forward-looking approach to energy supply. This submission will consider these issues in the context of a role for nuclear power in the overall generation mix, and also comment on some of the concerns that are raised about the use of nuclear energy. 1 IEA (2006), Energy policies of IEA Countries 2006 Review 2 NEA Nuclear Energy Outlook Meeting the Energy Challenge, A White Paper on Energy, May 2007, Department of Trade and Industry 4

6 3 The Motivation for a change in approach 3.1 Providing generating capacity to meet expected growth in Australian electricity demand Electricity plays a pivotal role in Australia and is important for international competitiveness, industrial employment, economic development, well-being and quality of life. It also has a great consequence for the environment, as 50% of Australian energy-based GHG emissions come from power generation. As discussed in the UMPNER 4 analysis, the industry has approximately 48 gigawatts (GW) of installed capacity. 5 6 Baseload plant capacity comprises approximately 70% of the generating fleet, but supplies 87% of electricity delivered. Baseload plant, with low marginal costs, is generally dispatched for much longer periods than peak and intermediate plant. 7 Black and brown coals are currently the major fuel sources, contributing approximately 75% of the total. The share contributed by gas has been increasing due to its use in peaking plant, and the 13% Gas Scheme in Queensland. Intermittent generators (principally wind power and some other renewables) require complementary generation capacity that can be called upon when the intermittent capacity is unavailable. 8 This so-called Spinning reserve (provided by conventional power plant such as gas) can help to cope with sudden load changes and unplanned loss of generation. Some spare capacity is also required to allow for planned maintenance and outage. In general, generating plant with the lowest operating costs (e.g. coal-fired boiler/steam turbine) is the least responsive to load change, while those that are more responsive (e.g. open cycle gas turbines) are more expensive to run continuously. 9 Plants with high capital costs generally have low operating costs, and vice versa. Australian electricity consumption has increased more than threefold over the period to , to approximately 252 TWh. 10 With more reliance on electrically powered technologies, consumption is projected to grow at around 2% per year to Electricity consumption is projected to reach approximately 410 TWh by and 550 TWh by Servicing such demands would require over 100 GW of generating capacity by 2050 i.e. about twice the amount available now. The magnitude of the energy supply challenge, both globally and nationally, requires a wide range of solutions and both available and future technologies should compete on their merits. The problem is sufficiently serious that all technologies should be under active consideration, even if these do not eventually meet the criteria for adoption. This requires a standard analysis of options in economic terms. The levelised cost approach is the mot widely recognised. This has been utilised recently in some studies (see e.g. NEA Nuclear Outlook 2008). The use of levelised cost and, where possible, social cost analysis should underpin option based energy planning. 4 Uranium Mining, Processing and Nuclear Energy Review, PM&C Geoscience Australia. Excel file of all operating renewable generators. 24 July 2006, Australian Green house Office. (Accessed 7 December 2006) 6 Geosciences Australia. Excel file Operating fossil fuel power stations. 18 July 2006, Australian Greenhouse Office. (Accessed 7 December 2006) 7 Australian Bureau of Agricultural and Resource Economics. Energy in Australia Canberra: ABARE, World Nuclear Association. The global nuclear fuel market: Supply and demand London: WNA, Ux Consulting. The uranium market outlook quarterly market report July UxC, July Australian Bureau of Agricultural and Resource Economics. Electricity and greenhouse gas emission projections. 5 December 2006, ABARE. 5

7 One key issue is maintaining electricity supply in a manner that meets both normal and peak demands (daily and seasonal), taking into account the nature of the generating capacity and the balance between intermittency and base load. Clearly, many alternative means exist for providing the required supply. Some have very high costs and others require technologies that are in development and may not be mature for many years. Restricting the options to provide supply and diversity without full examination could negatively impact achievement of goals, trade and productivity The chosen mix must also satisfy the requirements for carbon pollution reduction, In this connection, it must be noted that although gas has high availability, it is also a major source of GHG emissions. In comparison, nuclear power is an established technology, which provides security of supply in that its price is essentially independent of fuel costs and carbon pricing. Many countries already use it as a baseload technology with high availability and predictable performance. 3.2 The urgency of moving to low carbon technologies As noted, the major source of the global increase in emissions is from developing countries, to the extent that these emissions will exceed OECD country emissions during the 2020s. Pacala and Socolow 11 have examined the available literature, and conclude that a business as usual scenario would produce annual emissions of 60 billion tons of carbon dioxide by They report a consensus that stabilisation of carbon dioxide levels at 500 ± 50 parts per million is the best achievable outcome, and that requires maintenance of the current level of carbon emission to the atmosphere. They define the carbon emissions which must be saved as the stabilisation triangle, implying an on-going saving reaching a total of 90 billion tons of CO 2 per annum by This is illustrated in figure 1 below. Figure 1: Defining the stabilisation triangle between current projections and flattened rates of emission Science, Volume 305, 13 August 2004, pp 968 ff 6

8 Their analysis demonstrates that delaying the response to the accumulation of atmospheric carbon dioxide will make the achievement of a stable atmosphere with acceptable carbon dioxide levels a far greater challenge, necessitating, for example, the acceptance of a level of 850 parts per million implying very significant climate change - if action is not taken in the next 50 years (see Figure 2 below). Figure 2: Impact of delayed action on CO 2 levels 11 Pacala and Socolow have evaluated a number of strategies which would contribute to reducing projected emissions of carbon dioxide with progressive implementation over the next 50 years to provide the stabilisation of carbon emissions at the level required to meet the long term target of 500 parts per million of CO 2 in the atmosphere. They present 15 possible strategies which could be scaled up over 50 years to each save a total of 25 billion tons of carbon by 2054 or reduce the carbon emission rate in 2054 by 1 billion tons per year. At 1 billion tons per year, these contribute one of the 7 wedges needed to reduce the emissions. The concept of the stabilisation wedge is shown in Figure 3 below. 7

9 Figure 3: Illustration of stabilisation wedges that contribute to achieving the flat path 11 These 15 possible strategies are listed in Table 1 below. An examination of the strategies shows a wide range in the availability of the required technology and practical feasibility for their immediate application. Two examples where there is practical demonstration of the technology at the required scale are the use of gas to replace coal in fossil fuel powered generation, and the use of nuclear power. Current global nuclear generation represents more than one half of a required wedge. Efficiency Table 1 - List of possible wedges identified by Pacala and Socolow Efficient vehicles Increase fuel economy for 2 billion cars from 30 to 60 mpg 2. Reduced use of vehicles Decrease car travel for 2 billion 30-mpg cars from 10,000 to 5,000 miles per year 3. Efficient buildings Cut carbon emissions by one-fourth in buildings and appliances projected for Efficient baseload coal plants Produce twice today s coal power output at 60% instead of 40% efficiency (compared with 32% today) Fuel shift 5. Gas baseload power for coal baseload power Replace 1400 GW 50%-efficient coal plants with gas plants (four times the current production of gas-based power) 8

10 CO2 Capture and Storage (CCS) 6. Capture CO2 at baseload power plant Introduce CCS at 800 GW coal or 1600 GW natural gas (compared with 1060 GW coal in 1999) 7. Capture CO2 at H2 plant Introduce CCS at plants producing 250 MtH2/year from coal or 500 MtH2/year from natural gas(compared with 40 MtH2/year today from all sources) 8. Capture CO2 at coal-to-synfuels plant Geological storage Nuclear fission Introduce CCS at synfuels plants producing 30 million barrels a day from coal (200 times Sasol), if half of feedstock carbon is available for capture Create 3500 Sleipner-size sequestration plants (one such plant is functioning in the North Sea) 10. Nuclear power for coal power Add 700 GW (twice the current capacity) Renewable electricity and fuels 11. Wind power for coal power Add 2 million 1-MW-peak windmills (50 times the current capacity) occupying 30,000 square kilometres, on land or offshore 11. PV power for coal power Add 2000 GW-peak PV (700 times the current capacity) on 2,000 square kilometres 12. Wind H2 in fuel-cell car for gasoline in hybrid car Add 4 million 1-MW-peak windmills (100 times the current capacity) occupying 60,000 square kilometres, on land or offshore 13. Biomass fuel for fossil fuel Add 100 times the current Brazil or U.S. ethanol production, with the use of 250,000 square kilometres (one-sixth of world cropland) Forests and agricultural soils 14.Reduced deforestation, plus reforestation, afforestation, and new plantations. Decrease tropical deforestation to zero instead of 0.5 GtC/year, and establish 300,000 square kilometres of new tree plantations (twice the current rate) 15. Conservation tillage Apply to all cropland (10 times the current usage) Strategies will interact and may affect each other e.g. thus the more decarbonised the system becomes, the less the savings from greater efficiencies in electricity use. 9

11 The OECD International Energy Agency has adapted and simplified this work to identify five energy-related solutions scaled to save one billion tons of carbon dioxide per year (as described in Figure 4 below). Figure 4: Five possible energy solutions to avoid 1 billion tons of CO 2 The magnitude of the required savings is immense globally, and in the case of many of the proposed solutions, such as one and two above, beyond our current technical capability. Given this immense effort, countries need to have a very strong reason to exclude any technology, especially if that technology is available now. 3.3 Comparison of carbon dioxide emissions from various generating technologies In considering electricity generation, it is important to understand the full life cycle carbon dioxide production from the various generation methods. Table 2 sums up the general consensus of opinion from many extensive national studies. Table 2 - Grams of CO 2 per kwh Generation Method Japan Sweden Finland Australia Coal Gas Thermal Gas Combined Solar PV Wind Nuclear Hydro Baseload options in italics 10

12 The low carbon emissions of nuclear generation mean that the current 400 nuclear power stations saved the emission of 2.5 billion tons of carbon dioxide during 2005, so providing a demonstration of the immediate viability of the nuclear wedge in the Pacala and Socolow model. Edmonds and Koh of the Joint Global Change Research Institute and working in the Global Energy Technology Strategy Program have determined the value of maintaining the nuclear option in addressing climate change 12. They find that the value of maintaining the nuclear option is denominated in trillions of dollars, with the value being higher if uranium reserves are increased independent of cost of uranium, and lower if the most important alternative technology of carbon capture and sequestration becomes technically and economically viable, as demonstrated in Figure 5 below. Value (Trillon 1990 US$) Gen III No CCS Value of Advanced Nuclear WRE 550 Scenario +Gen III w/ CCS Value (Trillon 1990 US$) Value of Advanced Nuclear Gen III No CCS +Gen III w/ CCS WRE750 WRE650 WRE550 WRE450 Figure 5: Economic value of Generation III reactor scenarios with and without carbon capture and storage This figure illustrates that: To maintain carbon dioxide levels in the atmosphere at 550 parts per million, the use of nuclear power would save nearly US$3 trillion without carbon capture and sequestration and some US$1 trillion with carbon capture and sequestration; and The value of the savings decreases if we are prepared to accept increasingly high concentrations of CO 2 in the atmosphere (here shown up to 750 parts per million). 12 J Edmonds and S H Kim, Stabilizing Radiative Forcing in New Economic-demographic Future Scenarios. Joint Global Change Research Institute, 24 May

13 3.4 Australian situation Although the actual ranking varies, the figure below 13 shows Australia as the highest per capita emissions of greenhouse gases in the industrialised world. Figure 6: Greenhouse gas emissions per capita for highest emitting nations Those emissions come from a variety of sources, including transport, land use and industrial processes. In Australia, the generation of electricity accounts for nearly 50% of emissions. CO2 emissions in Australia s National Energy Market (NEM) have increased from 117 Mt in 1990 to 169 Mt in In a paper in The Electricity Journal (2007) 14, the authors indicate that, without policy intervention, emissions from the Australian NEM are forecast to further rise to 256 Mt by They also suggest that the most likely technology path forward will be gas-fired generation in the medium term, with integrated gasification combined-cycle with CCS and/or nuclear being the dominant baseload technology over the long run. They show that the nuclear scenario is less expensive than the integrated gasification combined-cycle with CCS outcome in 2030 by about US $ 0.8/MWh and US$2.8/MWh than the gas one. 13 US Environmental Protection Agency, Global Warming Omissions, Available at: 14 Simshauser, Thao Doan & Lacey, Electricity Journal,

14 4 Australia s choice of generating technologies Australia s chosen mainstream options include cleaning up coal (through carbon capture and sequestration), solar and wind as major development opportunities and other renewables as supplementary, and measures to reduce demand. However, there appears to be no option that provides the required energy if clean coal is too expensive, if sequestration is not feasible or if commercial clean coal is too long term. Clean electricity from 'new renewables' - solar, wind, biomass and geothermal power - deserves strong support. But the collective capacity of these technologies to produce electricity in the decades ahead is limited. The International Energy Agency projects that, even with continued subsidy and research support, these new renewables can only provide around 6% of world electricity by None of the above technologies are at an advanced stage. The UK White Paper noted: The need to reduce carbon emissions whilst ensuring secure energy supplies means that we cannot rely on renewables alone. This is because we need a diverse electricity generation mix. Moreover, some of the most cost- effective renewable technologies, such as wind, are intermittent and cannot produce electricity on demand. We will continue to need fossil fuels as part of a diverse energy mix for some time to come. But in order to meet our carbon reduction goals, sources such as coal and gas must become cleaner. And it is in our own vital interests that the technologies necessary to mitigate the emissions from burning fossil fuels are developed and deployed as rapidly as possible especially as fossil fuel use by emerging economies, such as China and India, is growing rapidly as their economies expand. Carbon capture and storage (CCS) is an emerging combination of technologies which could reduce emissions from fossil fuel power stations by as much as 90%. CCS with electricity generation has not yet been proven on a commercial basis, although some key elements of the process have been demonstrated. In the case of renewables, we know of no country that has demonstrated renewables as baseload power. Indeed, the problem of low efficiencies from wind and intermittency remains a problematic issue. The figure below shows the availability of renewables as input to the Nordic grid and the corresponding spot price. The low price for wind power at times of its greatest availability indicated the difficulty of getting power availability to match demand for intermittent power. 13

15 Figure 7: Economics of intermittency in Denmark & Nordic Grid In the case of CCS, the success of this development would affect not just the Australian emissions profile but could have a major global impact. Hence investment here is clearly a vital component of future development. But many countries around the world are realising that diversity in energy mix is a key defence against unexpected events. This was a key driver in the UK turn-around from not seeing a role for nuclear in 2003 to advocating strongly in 2006 onwards. Their White Paper notes, in relation to nuclear power: By removing one of the currently more cost effective low carbon options, we would increase the risk of failing to meet our long-term carbon reduction goal. There would also be a risk of higher costs to the UK economy: by excluding nuclear as an option, our modelling indicates that meeting our carbon emissions reduction goal would be more expensive. We recognise that, as with all generation technologies, there are advantages and disadvantages with new nuclear power. But having reviewed the evidence and information available we believe that the advantages outweigh the disadvantages and that the disadvantages can be effectively managed. Far from being competitors, nuclear power and 'new renewables' are urgently needed as partners if the world's immense clean energy needs are to be met. In Australia, there is increasing recognition by business of the potential role of nuclear power in a future generating mix. The NSW Business Chamber examined these issues in their report Powering NSW, dated March 2009, and concluded: All levels of Government need to consider alternative, low carbon energy sources when planning for future electricity generators. This includes the current Federal and State Governments abandoning their ban on nuclear power plants. In a recent interview with the The Advertiser in Adelaide, Peter Vaughan, CEO of Business SA presented their vision of the state in 2025 comprising nuclear power, a network of desalination plants that have solved South Australia's water problems, a lean public service and virtually no unemployment. 14

16 4.1 Australia s contribution to global warming It has been often remarked that Australia contributes only around 1% to global warming as a result of GHG emissions. This relates to its domestic emissions. However, Australia also contributes indirectly in terms of its export of coal and uranium. Table 3 below shows the exports for of both thermal coal and uranium, together with their energy equivalence, and the associated revenue (ABARE report). The energy equivalence is based on an energy density of coal of 6,250 kwh/tonne and a thermal efficiency of 40%. Table 3 - exports for of both thermal coal and uranium, together with their energy equivalence, and the associated revenue Sept Dec Mar June Total Thermal coal (kt) 27,590 28,550 29,420 29, ,070 Electricity generated (TWh) Uranium (kt) Electricity generated (TWh) Sept Dec Mar June Total Thermal coal ($m) $1,694 $1,802 $2,115 $2,754 $8,365 Uranium ($m) $285 $259 $172 $171 $887 Coal generates about 10 times the export revenue than uranium does, but exports 10,000 times the volume. The smaller volume of uranium produces more than 50% more electricity. Table 4 below is based on the Energy in Australia Report 2009 and translates to similar figures. Table 4 - exports of both thermal coal and uranium, together with their energy equivalence Mt PJ TWh TWh (e) Coal Uranium In terms of GHG, the 115 Mt of coal exported will release about 288 million tonnes of CO 2 and the use of uranium in nuclear power plants will save about 400 million tonnes (based on 1 kg/kwh emitted for coal and 10 g/kwh emitted for nuclear). Table 5 CO 2 emissions for thermal coal and uranium Export (Mt) CO 2 (Mt) Thermal coal Uranium CO 2 saved by nuclear

17 Hence Australia s net contribution from its exports is to reduce GHG emissions by around 100 million tonnes per year as a result of uranium sales. A similar type of saving would occur if uranium was used to fuel electricity generation in Australia. Australia s uranium fuels approximately 46 one GWe nuclear plants, and thus is fuelling the equivalent of the Australian energy generating capacity and saving 400 million tonnes of CO 2 annually. In the UMPNER review, they estimated that 25 nuclear reactors producing about a third of the nation s electricity by 2050 would save about 170 million tonnes of CO 2 per year. 4.2 Technology maturity In choosing an appropriate mix of energy technologies, due account needs to be given to the maturity of the technology. Wind and solar are available now, but not at the level of availability that is required. In particular, development of batteries allowing the storage of energy generated by such intermittent technologies will need to be further progressed. CCS with electricity generation has not yet been proven on a commercial basis, although some key elements of the process have been demonstrated. CCS is expected in years, but as yet not much published data on cost or sequestration feasibility is available. In contrast, nuclear power is a mature technology, with 439 reactors operating worldwide in June 2008 and a further 41 reactors under construction (NEA Nuclear Energy Outlook). In 2006, nuclear energy supplied 2.6 billion MWh, or 16% of the world s electricity. This averted the emission of some 2 billion tonnes of CO 2 if fossil fuels had been used. 5 Issues raised against use of nuclear power 5.1 Social acceptability Given the inevitability of increased costs for carbon-based fuels, the major issue confronting proponents of nuclear power in Australia is not economics, but social acceptability. Overseas experience has been that familiarity with nuclear power breeds a degree of comfort support for, and comfort with, nuclear power is strongest in regions located close to a nuclear power plant, and falls away with distance (which is obviously the inverse of the actual risk). Those results have been reflected in ANSTO surveys of public attitudes in recent years, with support for, and comfort with, ANSTO and nuclear activities generally strongest in the Sutherland Shire and weakest in cities other than Sydney 15. The Multinational Nuclear Power Pulse Survey 16, conducted by global management consulting and technology company Accenture in November 2008, comprised a series of 20- minute interviews conducted online in native languages, with 10,508 individuals in 20 countries participating. The survey was conducted in Australia, Belgium, Brazil, Canada, China, France, Germany, Greece, Hungary, India, Italy, Japan, Netherlands, Russia, Slovakia, South Africa, Spain, Sweden, the UK and the USA Taken from World Nuclear News 16

18 Some 29% of respondents in the poll said that they support the use or increased use of nuclear power outright, with a further 40% saying that they would support nuclear power if their concerns about it were overcome. Overall, sentiment has swung in favour of nuclear energy, with 29% of respondents saying they are more supportive of their country introducing or increasing the use of nuclear than they were three years ago. However, 19% of respondents said they were less supportive than they were three years ago. Forty-three percent of respondents see nuclear power as a means to achieving a low-carbon future, with 9% calling for an increase in nuclear energy alone to help reduce fossil fuel dependency. A further 34% said there should be a mix of nuclear energy and renewable energy. Sander van 't Noordende, group chief executive of Accenture's Resources operating group, said: "Concerns over energy security, volatile fossil-fuel prices and climate change have made nuclear energy more popular with consumers." However, he warned, "Policy makers and generators should not assume that this makes consent easy to achieve or maintain. Government and the energy industry must take note of the continued fragility of popular support for nuclear power." The top three concerns of those respondents who said they opposed the use of nuclear energy in their countries were issues related to waste disposal, safety and decommissioning. These concerns were cited by 91%, 90% and 80% of those opposing respondents, respectively. In each case, Accenture said, 45% of those who oppose nuclear power said that more information on these issues would make them change their minds either completely or to some extent. However, the survey indicated that only 28% of respondents said they were either well or very well informed about their country's strategy regarding nuclear power. "Transparent information is the most important driver of consumer support, and our survey findings show that public opinion can be changed significantly on the basis of available information," said Daniel Krueger, head of Accenture's nuclear energy practice. He added, "Governments need to be clearer about the reasons for their nuclear energy strategies in order to ensure that public support aligns with their decisions to increase, decrease or maintain their nuclear energy commitment." A more qualitative assessment of attitudes to nuclear power can be found in a recent United Kingdom study, Living with Nuclear Power in Britain: A Mixed-methods Study 17. Broadly speaking, people living near nuclear power plants tend to see them as a familiar, ordinary part of the fabric of their life and community, but external events such as terrorist activity in other parts of the world - whether nuclear-related or not - can cause them anxiety about the plant they live close to. When it comes to trust, they tend to be very trusting of the local plant operators, although the study found quite strong distrust of the nuclear industry in general, the government and national regulators in some areas

19 Would-be nuclear builders must not take local support for granted, the report warns. Despite their acceptance of their local nuclear power plant as a familiar and integral part of their locality, communities will not give unquestioning support to new-build plans without being fully consulted and involved in the process. Failing to consult in a proper manner, or in a way that does not fully recognise and respond to a local population's ambivalences and concerns, would almost certainly serve also to undermine local confidence, something which has clearly been painstakingly built up in all locations studied over a considerable period of time, the report concludes. The United Kingdom is obviously in a different position to Australia, with a total of 44 power stations (19 of which are still operating) having operated in 17 locations since But the study does underline the importance of carefully and painstakingly building local consent to the siting of nuclear power stations through the provision of information, the conduct of consultations and convincing communities that their view really does matter. Over time, such conduct can result in the situation in a number of countries today, where communities actively compete to host nuclear power plants and waste management facilities because of the degree of trust which has been developed and the recognition of the benefits such facilities bring, particularly in terms of employment and infrastructure. 5.2 Safety, waste, proliferation and decommissioning Concerns have been raised about the safety, proliferation resistance, waste management and the costs of decommissioning of nuclear power plants. In many countries, waste management and decommissioning costs are funded by charges on electricity and are a small proportion of the electricity price. Technologically, there are no major hurdles to safe and permanent disposal of nuclear waste and, with Generation IV reactors, the long-lived waste will be able to be re-fissioned to produce waste that would only require isolation for much shorter periods. In terms of waste disposal, we note that the world's first permanent disposal site for used nuclear fuel will be at Forsmark in Sweden. Site works towards the underground repository could begin in 2013 after a licence application in These issues have been addressed in various reports 18. We will not repeat the numerous studies, but agree with the UMPNER findings that: 1. Disposal of high-level waste including spent nuclear fuel remains an issue in most nuclear power countries. There is a consensus that disposal in appropriately engineered deep ( metres underground) repositories is the answer and such facilities are under development in many countries. Australia has areas suitable for such repositories, which would not be needed until around 2050 should nuclear power be introduced. 2. While proliferation of nuclear weapons remains a critical global issue, increased Australian involvement in the nuclear fuel cycle would not change the risks; nor would Australia s energy grid become more vulnerable to terrorist attack. 18 ANSTO s submission to UMPNER 18

20 5.3 Economics UMPNER considered the levelised cost of electricity generation from various sources, with assumptions about first of a kind (FOAK) and discount rates. The figure is reproduced below. Levelised cost of electricity generation (A$ 2006/MWh) $120 $100 $80 $60 $40 $20 Settled down costs Low commercial risk Tarjanne Gittus Settled down costs M oderate commercial risk RAE MIT Chicago Chicago $0 3% 5% 7% 9% 11% 13% Weighted average cost of capital First of a kind costs Higher commercial risk MIT Chicago Chicago Chicago 15% Figure 8: Weighted average cost of capital: UMPNER They concluded that: 1. Nuclear power is likely to be between 20 and 50 % more costly to produce than power from a new coal-fired plant at current fossil fuel prices in Australia. This gap may close in the decades ahead, but nuclear power, and renewable energy sources, are only likely to become competitive in Australia in a system where the costs of greenhouse gas emissions are explicitly recognised. However this conclusion was not in the context of the costs of clean coal, where there is cost uncertainty and does not take into account the learning curve that will have been derived from Generation III plants by the time that Australia makes the decision to build. It also obviously does not take into account current draft legislation intended to create a price on carbon. The situation in other countries is more equal. The most recent US analysis comes from MIT (the UMPNER figure used the 2003 report) and summarizes forecasts made by MIT in 2009 of the costs of electricity produced from nuclear power, gas or coal, and reveals that there is no significant difference between the three sources. If, however, a carbon-charge of US$25 per ton of carbon dioxide is made it has no impact on the cost of nuclear electricity but raises that of electricity from gas or coal, making nuclear the cheapest source of electricity. These forecasts are an update of earlier ones MIT (2003): Massachusetts Institute of Technology, The Future of Nuclear Power: an Interdisciplinary Study (2003). Available at: nuclearpower/ 19

21 US Cent/kWe.h Nuclear Gas Coal Base Case With carbon Change of $25/tCO2 Figure 9: Cost of Electricity generated from Nuclear power, Gas or Coal 20 The UMPNER report also indicated that a cost of $40 per tonne of carbon would see nuclear power as very competitive in Australia. In the paper cited before (2), the authors indicated analysed what successor technologies would make a difference to CO2 emissions and be affordable. They made very conservative assumptions on nuclear but the table below summarises their conclusions on system unit costs ($/MWh) of the NEM in Cost element Base case IGCC Gas Nuclear Renewables Base power Technology cost CO2 cost Total Nuclear leads to a price increase of less than US $20/MWh and emissions reducing by 150 Mt annually by One final factor that needs to be taken into account in any economic analysis is that, in contrast with alternatives such as gas, the cost of nuclear power is virtually independent of the cost of its fuel (in this case, uranium) (see Figure 10 below). 20 Update of the MIT 2003 Future of Nuclear Power Study By PROFESSOR JOHN M. DEUTCH, Institute Professor Department of Chemistry. DR. CHARLES W. FORSBERG Executive Director, MIT Nuclear Fuel Cycle Study Department of Nuclear Science and Engineering. PROFESSOR ANDREW C. KADAK Professor of the Practice Department of Nuclear Science and Engineering. PROFESSOR MUJID S. KAZIMI TEPCO Professor of Nuclear Engineering and Mechanical Engineering Director, Center for Advanced Nuclear Energy Systems. PROFESSOR ERNEST J. MONIZ Cecil and Ida Green Professor of Physics and Engineering Systems Director, MIT Energy Initiative. DR. JOHN E. PARSONS Executive Director, MIT Center for Energy and Environmental Policy Research Sloan School of Management. Student Research Assistants: DU, YANGBO and LARA PIERPOINT, MIT June

22 IGCC = integrated gasification combined cycle CCGT = combined cycle gas turbine Figure 10: Effect of 50% Increase in Fuel Costs 5.4 Externalities of Power Generation in Australia In a recent study by the Academy of Technological Science and Engineering (ATSE), the external social and environmental costs (the externalities) that accompany all electricity generating technologies were examined 21. Figure 11 summarises their analysis of the external costs of some of these technologies. Even with the considerable uncertainties associated with valuing externalities, the diagram provides a useful indicator of the relative magnitudes for some technologies relevant to The present wholesale price of electricity, around $40 per MWh gives a context for these evaluations. Figure 11 indicates that by 2050, coal will be some 8 to 10 times more costly than nuclear or renewables, with gas being intermediate at some 4 times the cost of nuclear Brown coal Black coal NGCC Black coal postcombustion CCS Black coal IGCC-CCS Nuclear LWR Solar PV Solar thermal Wind Figure 11: External costs of some electricity generation technologies (External cost $A/MWh) 21 The Hidden Costs of Electricity: Externalities of Power Generation in Australia. The Australian Academy of Technological Sciences and Engineering,

23 5.5 Financing of nuclear power In general, financing of new nuclear power plants can be either by governments (sovereign) or industry (corporate or balance sheet and limited recourse). In terms of government financing, the traditional approach to funding new nuclear power plants has changed. Governments have increasingly turned to capital markets for financing specific projects, including construction of new nuclear power plants. On the industry side, in the past project sponsors could assure return of, and on, equity by virtue of government guarantees, guaranteed rates and captive electricity markets. Under current conditions, in the absence of such protection, sponsors of new nuclear power plants may not be able to pay the yield needed to attract equity holders. For commercial investors and lenders, concern about delays and cost overruns in the face of the industry track record is a major factor. To secure successful financing, it is critical to have well structured nuclear projects to reduce uncertainties to the extent possible and to identify the risks upfront. Since most of the previous nuclear plants were built in a regulated market with long term contracts, the change in the structure of electricity markets over the years to semi or fully deregulated markets, with competition among generators, has amounted to regulatory market risk. An efficient regulatory body with effective regulatory procedures will mitigate this risk. There are also other risks, such as unknown costs, first of a kind, licensing, delayed construction, public acceptance and legal risks, but most of these can be contained by setting a well structured project schedule with appropriate risk allocation. A growing trend overseas, such as in Finland, is for major power consumers to join together to fund the construction of nuclear power plants. However, this is not essential, as evidenced by the growing number of projects to be funded by normal utilities in detailed planning in the United States. 6 The situation in 40 years time Energy demand and emissions will continue to increase over the next years, during which time there is no certainty that clean coal or renewable energies can provide the size of intervention needed to reach a low carbon electricity generating capacity. Many analyses indicate that, notwithstanding significant penetration of Carbon Capture and Storage (CCS) systems by 2050, the majority of CCS deployment will occur after and therefore lies beyond the period covered by this review of the energy-sector situation in Australia. Accordingly CCS may not significantly influence the market for Australia. The OECD Nuclear Energy Outlook 2008 concurs with the analysis of business as usual trends presented earlier, and goes on to state: The NEA has developed projections of the contribution that nuclear energy might make up to the 2030 and 2050 time frames. For the low scenario, it is assumed that alternative low-carbon electricity sources are successfully developed and deployed, whereas the high scenario assumes that they are not as successful. These high and low scenarios are in broad agreement with those from other organisations, and project that global installed nuclear capacity may range between 580 GWe and 1400 GWe in 2050 as compared with 370 GWe in IPCC (WGI) Intergovernmental Panel on Climate Change IPCC Carbon Dioxide Capture and Storage: Technical Summary p.44 22

24 The NEA projections correspond to an average annual construction of 23 and 54 reactors worldwide between 2030 and 2050, in the low and high scenarios respectively. Past industrial experience shows that such rates of construction, and more, are achievable, although this would require increasing current industrial capabilities. In terms of the geographical regions, the largest growth is predicted for China, India and the US, with most other Asian countries also introducing significant nuclear power into their energy generation mix. In some two dozen countries representing the preponderance of world economic activity and world population from North America across much of Europe to Russia and on to the major countries of South and East Asia the value of nuclear power has been reviewed and its role in their energy futures reaffirmed. Major countries without nuclear power such as Vietnam, Turkey, Indonesia, Egypt, Kazakhstan and the Gulf Emirates have already announced plans for introducing nuclear energy for the first time. Italy, the only country ever to shut down a small nuclear fleet and a country that it is now the world s largest importer of electricity, will reverse course over the coming decade. Finally we note that by 2030, we expect to see the introduction of generation IV reactors, which will lead to lower cost nuclear plants, high proliferation resistance, better utilisation of uranium, ability to produce hydrogen and more modular designs. The Generation IV roadmap identifies six advanced reactor designs and the underpinning research that is required to develop these designs. These reactors include types that can be used to burn the long-lived actinides to reduce waste disposal requirements and also reactors that are well suited to hydrogen production, opening up the possibility of alternative cleanburning fuels. For Australia to gain maximum benefit from Generation IV reactors, we would benefit from joining GIF. This would enable Australia not only keep abreast of new development, but also to influence the broader Forum to help achieve our national nonproliferation goals. ANSTO has capabilities in high performance materials and nuclear waste treatment that could help gain entry into GIF. Participation will enable effective consideration of the potential to introduce Generation IV technology into Australia in the future. 7 Conclusions In this report we conclude that: 1. Energy demand globally and nationally will continue to increase, and this increase cannot be stopped without denying countries the right to economic prosperity or maintenance of their standard of living. 2. There is an urgent need to act on reducing GHG emissions, and a range of technologies will be needed to address this concern. 3. Unmitigated coal will continue to be the prime source to meet the majority of the world s demand unless global action is taken on energy and greenhouse issues. 23