From The Conversation
Opposition Leader Peter Dutton’s plan to build seven nuclear power plants in Australia has attracted plenty of critical attention. But there’s a striking feature which has received relatively little discussion or criticism: the nuclear plants would be publicly owned and operated, similar to the National Broadband Network (NBN).
On the contrary, it received enthusiastic endorsement from free-market advocates such as The Australian’s Judith Sloan, who observed: “It’s how the French nuclear plants were first constructed.” It is also the way Australia built its biggest single piece of energy infrastructure, the Snowy Mountains Scheme.
But there’s a fundamental problem here. Over the last three or four decades the federal public service has been hollowed out in the name of “new public management”. This became very clear during the COVID pandemic, when state governments – who have preserved their ability to act far better – ran most of the response. There is a very real question over whether we have the governmental capacity to achieve net zero.
From NBN to National Nuclear Network?
Dutton’s acknowledgement of the publicly owned NBN as a model worth using is a welcome advance on the view of Malcolm Turnbull, one of his predecessors as Liberal leader.
A decade ago, then-prime minister Turnbull embarked on a disastrous “mixed mode” redesign of the NBN. This reflected his belief – expressed publicly after leaving office – that a publicly owned broadband network should never have existed.
Labor is in no position to oppose Dutton’s calls for public ownership. State Labor governments in Victoria and New South Wales have re-established publicly owned electricity enterprises, while South Australia’s Labor government has floated the same idea.
Whatever technological choices we make, it is clear our days of relying on the private sector to provide vital infrastructure are coming to an end. The question now is whether the public sector can recover to take the lead.
The National Energy Market, for instance, was meant to promote competition and drive electricity prices down. It has failed to do so, resulting in a string of government interventions, some more successful than others.
Arguably the biggest failed intervention was the now-defunct Energy Security Board, a politically driven response to South Australia’s statewide blackout in 2016.
The board sought to patch up the National Energy Market with a capacity market, which was immediately dubbed “CoalKeeper” due to incentives for old coal plants to keep going, as well as new grid access charges, promptly dubbed “Solar Stopper” due to discouraging new investment in solar. Energy experts did not favour this approach.
What proved more successful as a response to South Australia’s big blackout was the decision by the state government to fund the Horndale big battery, which was, when built in 2017, the world’s largest utility-scale battery storage.
Should new power be private or publicly owned?
Both major parties are flagging more intervention. The federal government has stopped waiting for markets to provide clean energy in favour of seeking tenders for new renewables through a capacity investment scheme. The scheme received 40 gigawatts worth of bids from renewable developers, far beyond the goal of 6GW.
This shift has come in response to developments bogging down, hampered by inadequate regulation and local opposition driven by a combination of genuine concerns about environmental impacts and culture-war driven science denialism.
Labor’s current renewables-led strategy requires 10,000 kilometres of new publicly built transmission lines, to meet our net zero goals. We’d need even more transmission if we are to become a major exporter of clean energy, either as electricity or in products such as green hydrogen and ammonia.
On the Coalition side, no private firm is likely to accept the risks involved in creating a nuclear power industry from scratch. Government would have to lead.
As Nationals leader David Littleproud has now acknowledged in relation to finding sites for nuclear plants, the national need for clean energy is too important to allow “not in my backyard” opponents – some with only a tenuous connection to the area in question – to slow or stop government plans.
If government is to lead, it must have the capacity
What Dutton’s nuclear gambit shows us is that, surprisingly, Australia’s two major political parties are in strong alignment on the need to rebuild state capacity.
Whether it’s Labor working to get transmission lines and offshore wind up and running or the Coalition working to create a nuclear industry from scratch, it will take a strong government with the capacity to articulate a plan, and the legal, financial and human resources to make it a reality.
All of these requirements were met when we constructed the Snowy Mountains Scheme, a decades-long federal government initiative undertaken in cooperation with Victoria and NSW.
Are they still in place? Not yet. Government capacity to act has been eroded over decades of neoliberalism. Particularly at the national level, public service expertise has been hollowed out and replaced by reliance on private consulting firms.
To rebuild the federal government’s capacity to act will require recreating the public service as a career which attracts the best and brightest graduates – many of whom currently end up in the financial sector.
The private sector still plays a central role in the construction of infrastructure, as was the case with the Snowy Scheme. But it’s up to governments to take the lead in finance and planning.
This poses particular challenges for the Liberal Party, which has long favoured the interests of businesses small and large, and has been historically opposed to public ownership. But from the late 1990s until relatively recently, Labor was also keen on privatisation.
The French Prime Minister Georges Clemenceau once observed that “war is too important to be left to generals”. As we are discovering to our cost, infrastructure investment is similarly too important to be left to private investors.
John Quiggin 
How are we going to build nuclear power stations? We can’t build enough houses… or apartment blocks that don’t crack like eggs and leak like sieves. Also, have people forgotten Fukushima already?
And then there is the engineers shortage. “A 2022 report by Engineers Australia revealed that Australia is experiencing a scarcity of engineers in nearly all disciplines of the profession.”
A renewables build-out will be superior on all counts: feasibility, timeliness, safety and costs.
Agree with Iko on nuclear. A revealing anecdote about Pierre Messmer. the Gaullist PM under whom France built its many reactors in the 1970s.. At the Armistice in 1940, he and another young army officer decided to flee to London and sign up with de Gaulle. They stole a motorbike and made their way to Marseille, where they boarded a ship full of refugees, destination Algeria IIRC. On the high seas, the pair hijacked the ship at gunpoint and forced the compliant captain to sail to London instead. I’m not usually a fan of the macho style of management, but in Messmer’s case it wasn’t an affectation, and everybody knew it.
“Infrastructure investment is similarly too important to be left to private investors.” The key distinction here is surely monopoly vs competition. The Littlewood scheme for electricity – regulated or publicly owned grid and marketmaker, competing generators – works fine in many jurisdictions. It does not seem to matter much whether you opt for nominal private ownership of the grid plus tough regulator, or full public ownership. The strangest case is Tennet, the backbone grid operator for a third of Germany. It’s publicly owned – by the Dutch government. Since the interests of Dutch voters and German consumers are not seriously misaligned, and the German regulator is competent, the arrangement works.
Broadband is supplied efficiently where I live in Spain by the former monopoly telco, Movistar. Strong EU regulation requires it to open the fibres at cost-plus to competing providers such as Vodafone. Movistar do not advertise their local network management function. When there’s an outage, the van that turns up does not carry the Movistar logo but that of a specialist subcontractor in the provincial capital Malaga. They are competent and fix the problem.
The proposition may extend to water, but I’m not so sure. The fiasco of water privatisation in the UK, with complete regulatory failure, supports the case for public ownership. However, many cities around the world keep their water and sewerage infrastructure in their ownership, but contract out day-to-day operations to large specialist firms like Suez.
The obvious exception to public/private agnosticism is rail, where the technical argument for centralisation, and hence full public ownership, is very strong. Privatised passenger rail in the UK is a unique and unpopular muddle rather than a full-scale fiasco. Ticketing and track maintenance have already been re-centralised, and the policy of the new Labour government is to let the remaining private operator licences expire over the next few years. There are a few privately operated trains in Europe, notably the Eurostar ones from London the Paris. I’m not sure how this works, but I imagine the network operator keeps pretty tight control. Mike Barnard makes a strong case that the privately run US rail system is now technically very backward compared to both China and India.
Anyway, whatever your take on these cases, JQ must be right about the need for greater public service capacity, whether the civil servants are acting as regulators or managers.
Opposition Leader Peter Dutton’s plan to build seven nuclear power plants in Australia has attracted plenty of critical attention.
On ABC TV’s Insiders program on 23 Jun 2024, in the interview by David Speers with Shadow Climate Change and Energy Minister Ted O’Brien, some of the conversation was as follows:
0:05:22 TED O’BRIEN: So, to clarify, we’re talking about seven plants.
DAVID SPEERS: So it could be more than seven reactors?
TED O’BRIEN: Seven plants, right? And… One, One of the lessons we’ve learned from overseas is, in order to get costs down you need multi-unit sites.
DAVID SPEERS: So a plant could have more than one reactor?
TED O’BRIEN: Correct. So, so let’s say the, the small modular reactors, for example, and there are different ones. But if you say a 300 megawatt reactor, right? Um, when you talk about a nuclear plant, these are modularized, um, compartments, you can build 300, add another 300, add another 300, right? So, you’re talking about multi-unit plants.
Multiple reactors for each of the seven nominated sites means the all up order of magnitude costs for the Coalition’s nuclear fantasy is undeniably in the hundreds of billions of dollars, and perhaps may exceed a trillion dollars. Is it any wonder Dutton & O’Brien won’t tell Australians what the costs of this nuclear fantasy are?
Where’s the nuclear fuel coming from to keep these reactor units operating during their operational lives (40-60 years)?
Per the World Nuclear Association’s webpage titled World Uranium Mining Production, updated 16 May 2024, the world’s uranium production has not been able to meet global requirements since around 2015.
Per the Energy Watch Group’s Mar 2013 report titled Fossil and Nuclear Fuels – the Supply Outlook, Figure 113: Historic and possible future development of uranium production and demand, shows high-grade uranium ores cannot sustain long-term a so-called “nuclear renaissance”.
This nuclear thing of Dutton’s is just a thought bubble, created by the Nats and inflated by Dutton’s desire to be relevant. Hopefully by next week it will be forgotten about.
I’ll just leave this here, it’s why investors are moving away from resource dense energy https://rmi.org/insight/the-cleantech-revolution/
Dutton is “deploying delayables” as one cartoonist put it. The neoliberal game has always been to obfuscate and delay. The goal is to keep fossil fuels profitable. Established capital wants to avoid stranded assets. Dutton and his backers have no real intention of building functioning nuclear power plants. Even flopped attempts to build nuclear power will siphon investment from renewables and keep the coal fires burning.
Such a process also allows a political party to play the “Delay, Delegation, and Obfuscation” game:
“… where a policymaker needs to make a decision on a salient issue that divides two electorally important groups within the … constituency. In these “no-win” situations, the use of (policy and) procedural obfuscation could be quite advantageous electorally.”
I have interpolated the “policy and”.
Click to access WP_2017_dynes-fox_no-win-situations.pdf