Rethinking nuclear

Apparently, in order to placate Barnaby Joyce and others, there will be a Parliamentary inquiry into nuclear power. I was thinking of putting a boring submission restating all the reasons why nuclear power will never happen in Australia, but that seemed pretty pointless.

Given that the entire exercise is founded in fantasy, I’m thinking it would be better to suspend disbelief and ask what we need if nuclear power is to have a chance here. The answer is in two parts:

  • Repeal the existing ban on nuclear power
  • Impose a carbon price high enough to make new nuclear power cheaper than existing coal (and, ideally gas) fired power stations

My initial estimate, based on the Hinkley C contract in the UK (price of $A160/MWh) is that the required price is at least $100/tonne of CO2. Rough aritmetic follows: Black coal emits about 1 tonne/MWh, and costs around $40/MWh to generate, so it would be slightly cheaper in the short run. Similarly for brown coal, which has higher emissions, but is cheaper to run.. But at those prices, it would be uneconomic to do the repairs necessary to keep existing coal-fired plants in operation past, say, 2030.

If such a policy were adopted, perhaps to be phased in over a decade or so, the immediate impact would be a massive expansion of renewables and big incentives for energy efficiency. But, if the arguments of nuclear fans about the need for baseload energy turn out to be right, there would be some room for nuclear to enter the mix after about 2040.

Of course, nothing remotely like this will happen. It’s rather more likely that Barnaby and the committee will discover a working technology for cold fusion, based on harnessing unicorns.

41 thoughts on “Rethinking nuclear

  1. In the spirit of the op…

    “Barnaby and the committee will discover a working technology for cold fusion,” could be tricky as;

    “The U.S. Patent and Trademark Office(USPTO) now rejects patents claiming cold fusion.[89] Esther Kepplinger, the deputy commissioner of patents in 2004, said that this was done using the same argument as with perpetual motion machines: that they do not work. ”

    This will therefore be THE Thorny Issue “based on harnessing unicorns”…
    “Harnessing Unicorns
    how to leverage the best services to create the most value”
    Yes. Really.

    Please JQ, put up a PUBLIC submission, so we may SIGN ON.

  2. Not sure if “harnessed unicorns” would pass the kindness to animals opportunity cost 😉

  3. I think this is just a variant of the “but if greenies were really worried about emissions they have to support nuclear” kind of argument – ie it makes the debate about what “Environmentalists” say and NOT about LNP policy (and it’s absence) that directly addresses the climate problem, as communicated to the government by decades of consistent expert advice. It is anti-environmentalist theatre – and so long as the LNP doesn’t have a policy of using nuclear to fix the climate problem, quite hypocritical.

    The current theme amongst the climate responsibility deniers is the Hypocrisy of climate activists – flying to conferences, driving cars to rallies, failing to go all Stone Age to demonstrate their emissions purity – which “going without” is actually the outcome (permanent loss of economic prosperity) mainstream climate activism seeks to avoid, through economy wide transition. Like it we have no right to call on the government to take a problem they already know is real seriously.

    But it does seem to hit the Right buttons for them… and since no-one can be a functional member of our society without using products of fossil fuel energy, it catches out everyone who cares. Yet, curiously, it somehow lets everyone who doesn’t care off the hook completely! Sounds, um… hypocritical to me.

    I do think the Hypocrisy Police are being just a wee bit hypocritical in this; whilst people in the very Offices, making the actual decisions on this, are actively engaged in dangerous irresponsibility at industrial scales, without any criticism, they obsess over people who know personal lifestyle choices won’t fix things and advocate for economy wide change for failing to commit to personal lifestyle choices that won’t fix things.

    Give me people who are informed and who care any day over those that choose misinformed in order to justify not caring!

  4. Pass a law saying that the plants all have to use the same reactor, and it has to be a non-water-cooled reactor. About all you can try, and it still probably won’t be enough to save them from cost overruns if history is any guide.

    If they have to subsidize something nuclear, tell them to put it into nuclear fusion research. We can always use another research reactor.

  5. Garry Claridge says: “the kindness to animals opportunity cost”. JQ will scope harnessing animals opportunity cost in his next book:
    “Harnessing Unicorns in 2 Lessons: Why Nuclear Reactors Work So Well, and Why They Can Fail So Badly”

     mrkenfabian says: “It is anti-environmentalist theatre – and so long as the LNP doesn’t have a policy of using nuclear to fix the climate problem, quite hypocritical.”, but expert wedging.

    Brett says: “and it still probably won’t be enough to save them from cost overruns if history is any guide.”.
    Cost overruns imo will continue. But it seems insurance may not? What happens when “The Act was last renewed in 2005 for a 20-year period.” … so in 2026 after a us $12B disaster, no insurance except us – “socialised losses”?

    “The Price-Anderson Nuclear Industries Indemnity Act (commonly called the Price-Anderson Act) is a United States federal law, first passed in 1957 and since renewed several times, which governs liability-related issues for all non-military nuclear facilities constructed in the United States before 2026. The main purpose of the Act is to partially compensate the nuclear industry against liability claims arising from nuclear incidentswhile still ensuring compensation coverage for the general public. The Act establishes a no fault insurance-type system in which the first approximately $12.6 billion (as of 2011) is industry-funded as described in the Act. Any claims above the $12.6 billion would be covered by a Congressional mandate to retroactively increase nuclear utility liability or would be covered by the federal government. At the time of the Act’s passing, it was considered necessary as an incentive for the private production of nuclear power — this was because electric utilities viewed the available liability coverage (only $60 million) as inadequate.[1]…” Wikipedia.

    Imo the Price-Anderson Act will be renewed at cuttoff of us $20B. I wonder what the premiums are?

    At the last launch of the space shuttle, cameras were in the control room and back rooms. They cut to a smartly dressed talking head with the title ” Space Underwriter” . Not even NASA launched without the nod of the underwriter. So Price-Anderson Act will be renewed.

  6. As for repealing the ban on nuclear – it was empty political theatre back then, just as much as what is going on is theatre now; any government with (dare I use the word) mandate for nuclear power would have a raft of legislation to make it happen and repealing that ban is the only easy bit. I cringed when Tony Burke let out “but nuclear is illegal”.

    Actually I think this does serve the Morrison government’s needs very well. I think in a backhanded way it relieves, temporarily, some of the unresolved internal tensions in the Right about global warming – and that Barnaby led call to support nuclear (and not renewables) or shut up may be intended for climate science infected conservative colleagues as much as for The Greens and Labor.

  7. Rog, Malcolm promised that the NBN would be an expensive flop and he made that happen. What would fixing it mean?

    I like the idea of focusing on the carbon price necessary to make nuclear viable. The other alternative would be to focus on the cost if we simply subsidised it directly the way the British are doing, but that’s been tried and doesn’t seem to have much traction.

    I think this is mainly just another “bash the greenies” exercise, so it might be best ignored by most of us. Get a few respected academic figures to put in detailed submissions (Prof Q: CTRL-A, CTRL-C, CTRL-V…) and the rest of us get on with more important things. Like distracting Blot from the foreign menace (Greta) and get him back on local issues (the stunning ban on dog walking in Stonnington, perhaps?)

  8. “Of course, nothing remotely like this will happen. It’s rather more likely that Barnaby and the committee will discover a working technology for cold fusion, based on harnessing unicorns.”

    All true if our prior ways of handling infrastructure (eg the NBN ….. what a crying shame) and big projects prevails. If its business as usual it will be a disaster. If a banker is allowed in the room it will be a disaster. They got all the bankers out of the room when they did Bretton Woods and it was a stunning success. If we don’t have ASIO cover and assume potential espionage from the start, then thats a catastrophe as well.

    Do we need it floating, and out to sea, so that the core that needs to be cooled down can be dropped in an emergency into 1 kilometre deep frigid waters? Do we first need to spend 20 years slowly buying up potential sites, so we have far many potential sites than we could ever want nuclear reactors, so as to keep the costs down? Do we need to make the revenues of sole trader subcontractors helping the project, not counted for tax purposes? (I think this would be wise)

    Any banker involvement. Any debt involvement. They will always screw it up. They’ll always ruin it for everyone. I would want the Professor to get involved in this one having put more thought into infrastructure than our other economists. Even as a restraining force until all boxes are ticked maybe. Economists are going to get stuck in the pro and anti nuclear camps. Whereas if we let Merrill-Lynch and Rothschild into the mix, like we did with NBN, it will definitely be a disaster. But if we started an whole new project, with a time-range of half a century, a low budget at first, and allergic to all debt, coming out of the CSIRO, and with ASIO cover … some good may come out of it. Particularly if the nuclear momentum, could be used as a vehicle to push big project and infrastructure reform, more generally.

  9. “First they need to fix the NBN and the MDB before they go chasing another shooting star.” Hallelujah.

    See that? The undisputed best technology for the job to hand, that is to say optical fibre, and if you bring bankers, debt and privateer logic, into what essentially ought to be a communist infrastructure project, they can still mess everything up. Like they have been doing for nuclear nearly everywhere.

  10. In entrepreneurship, you have to put much more time than money into a project, when your team is small, or the organisation is going to go soft on you when you expand. I believe that communist undertakings within a mixed economy, can have far higher productivity rates than private undertakings. Now why would I say that? Have I gone from Von Mises to Marx as some sort of mid-life crisis? My caveat is if and only if the gestation time for the projects is way way longer than anything that the private sector would undertake.

    So imagine its making a movie around about 1970. And the writer-producer scouts out all the locations, keeps honing the script, and works everything out to the nth degree prior to hiring a bunch of other people. I say writer-producer rather than writer-director because Directing is so exhausting that you wouldn’t want to overwork the director in pre-production. But if you have this lengthy pre-production when the team is small, they are more likely to put out a good product and under budget

    With these communist undertakings we can get good results if we start now, always start right now, on a really small daily allowance and expect years to pass before you put real money into it. Plus if when you start actually building anything at all, if you can subcontract with tax free funds to sole traders, they will still work for the private sector …. but if you are going about things slowly, that gives your sole traders time to tool up, get the right skills and experience themselves, and train their people.

    One problem with traditional socialism is that they expected it to be a whole-of-economy thing, which Von Mises proved was impossible. The other problem is that if you want to be more productive than the private sector, you need to be more patient than the private sector. You need far greater lead-times with the small budgets, before you start putting bigger money into a project.

    One has to take the attitude of Stevie Wonder …. “Maybe not in time for you or for me, but one day at Christmas-time.” If they want to do it in a hurry they should not do it at all.

  11. Are you modelling a world in which electricity prices are regularly negative during sunny, windy days? What does that do to investment in new renewables? Does it change the economics for technologies that can generate flexibly (which are really fast start gas or nuclear, plus hydro, if there were places to build it).

  12. Gas and hydro are definitely the peaking technologies. Nuclear and Coal are the heavy lifters so far. If you don’t have glutted gas and hydro then the other additions, as worthy they may be, are likely to fit into the mix in quite a clunky fashion.

    We still have hydro alternatives I’m told. Near the coast in public lands South of Sydney I’ve been told there are more opportunities. Fish ladders are getting to be more the norm now. So a big dam ought not have the same environmental concerns as it once had. A fish ladder is where the fish can swim upstream a little way, catch a feed and take a rest, swim upstream a bit more, catch a feed, take a rest, and so forth.

    But I’d much prefer small hydro. I’d want all the land geared up as water retention landscapes and almost every steep hill in the country being able to generate hydro. We ought to be thinking about centuries long time-lines for this kind of stuff.

  13. The enquiry is a waste of time because Even the most standard project leadtimes main there will be a change of government with the incoming Labour green government promising to cancel the project before any soil is turned,

  14. “Twice the price in twice the time” is a good catchy slogan, with the merit of being true. Basis:
    Nuclear: JQ’s Hinkley A$160/Mwh, plus something for backup (yes!) and transmission, not to mention cost escalation, say A$180/Mwh in 10 years.
    Renewables: Andrew Blakers’ NEM scenario for wind + solar + HVDC transmission + off-river pumped hydro storage, A$93/Mwh at 2016 prices. Wind and solar prices have dropped say 25% since then, so <A85/Mwh today. No scaling problem in a horizon as short as 5 years. Blakers is very conservative on the technology: throw in some green unicorns like V2G and you can maybe maybe lower the price, but you don't need to.

  15. Mork: contracts have been signed for wind and solar at under US $20/Mwh. If you overbuild so much that 50% is curtailed, that still only makes an adjusted LCOE of $40/Mwh. There is no universe now in which nuclear can compete on price.

  16. “There is no universe now in which nuclear can compete on price.”

    But in your own scenario, you are talking about a solar industry that became competitive as the result of decades of investment. Well I of course have my doubts about this story. But even if true it implies that we can bring the cost of a technology down, if we are willing to take some time with it.

  17. To be fair, nuclear has only had 63 years from the opening of the first nuclear power station to bring down costs. I say it’s only fair we give it another 63 years — right after we’re done fixing this little climate emergency we’re in.

  18. Climate emergency? You mean the freezing weather on the way? Science not your strong suit Ronald. Its pretty clear that the high cost of nuclear is a function of management of big projects and not inherent to the nuclear technology itself.

  19. Ronald:
    You fail to take account of the fact that the new small modular thorium Generation IV reactors will be based on COMPLETELY DIFFERENT TECHNOLOGY, so past experience is irrelevant. They will be assembled by robots in giant underground factories, and installed on site by workers and supervisors who will not be hidebound by any damaging experience with the obsolete designs of the past. Only congenital naysayers like you will dare to suggest that a Great Leap Forward may turn out even worse than the past trajectory.

  20. Graeme Bird: “the high cost of nuclear is a function of management of big projectsand not inherent to the nuclear technology itself.” France: Millau motorway viaduct: built on time, to budget, no fatalities. Perthus high-speed rail tunnel under the Pyrenees: built on time, to budget, don’t know about fatalities. Flamanville nuclear reactor: years late, hugely over budget like other EPRs in Europe and AP1000s in the USA. As Arnulf Grübler has documented, the negative learning curve is specific to nuclear. ****

  21. “Flamanville nuclear reactor: years late, hugely over budget …” Focus on “years late”. No-one is taking the approach I am advocating. Years late for what? Years late for our great great grandchildren? Years late for a specfic party? Think of the NBN? There’s been problems with it right? But is anyone seriously saying that fibre optics is a flawed and feeble technology? The problems with the NBN came as soon as we decided to bring in debt, take it off-budget, talk to Merrill Lynch and Rothschild about it, and generally forget that its an inherently socialist project, or ought to be that way. Tenders, contracts, lawyers, bankers …. all very inappropriate stuff and making a simple effective technology doomed to fail as a big project.

    On the surface of things a nuclear power station might be thought to be a free enterprise idea with the power grid as socialist. But no; with nuclear its too complicated, with too many public welfare and national security considerations. Too much potential for legal costs to mount up. So its got to go communist. In which case there would be no such things as “years late” if they did it my way. No such thing since team-building and pre-production could be a years long process while the team is still small. And since you don’t spend that much time building the capacity for one nuclear station, when really you may want to have 100 of them before you are done.

    Its not just the nuclear we should be resurrecting. The dirigible, the trompe, canals, electric street cars (ie trams) ought all be part of plans on a very long time horizon. If you think there is a crisis and we need to get something up in a real big hurry … well yes no disagreement here. It will be a disaster.

    But we need dams, ponds, waterwheels, better wind, nuclear, trompes, dirigibles, canals, flat rail, underground roads, overunity devices, ….. we need this stuff everywhere, without exponentially growing debt attached to any of it, and without lawyer and banker overhead. So we need to stop this pretence that there is a heating crisis going on, because its making everyone softheaded and impatient.

  22. Yes, I do like the unicorn idea. Years ago, UK’s Energy Minister Amber SomeoneOrOther advocated making nuclear reactors look “beautiful”- as a way to win public opinion over to the cause, I think she was onto something.

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