New research has revealed that financial services in Australia will not insure against nuclear accidents, and if developers of nuclear power stations were forced to insure against nuclear accidents, nuclear power would be completely uneconomic.
The Australia Institute’s submission to the Inquiry into the prerequisites for nuclear energy in Australia, shows that establishing a nuclear power industry in Australia is economically unfeasible, particularly given the uninsurable nature of the technology means the risks of a nuclear incident are borne substantially by Australian taxpayers.
Submission key findings include:
- Nuclear power is far more expensive than other forms of power and has a long history of getting more expensive over time, not less.
- Nuclear power is slow to build, with the average build time taking a decade, face numerous delays and nearly all facing significant cost blow outs.
- While renewable energy is booming globally, nuclear power generation is going backwards, nuclear companies are facing distress or bankruptcy, and governments are giving bailouts using taxpayer money. While China is the largest recent source of new reactors, it has not begun building any new nuclear power plants since 2016, and currently generates twice as much power from renewable energy as nuclear power.
- New nuclear power technologies remain economically speculative; so-called ‘Small Modular Reactors’ face numerous diseconomies of scale and many analysts doubt their viability.
- Nuclear power is subject to substantial outages, both planned and unplanned, and does not have the flexibility required for a modern energy grid.
- In a country prone to extreme heat and prolonged droughts, nuclear power is extremely water intensive and vulnerable to extreme heat.
“The biggest barrier to nuclear power in Australia is that it is uneconomic, the costs of establishing a nuclear industry simply don’t stack up,” says Richie Merzian, Climate & Energy Program Director at The Australia Institute.
“Insurance policies by Australia’s major insurers contain specific language excluding coverage of nuclear disasters; none will insure against nuclear incidents.
“If nuclear power operators were made to adequately insure against the risk of nuclear accidents, the insurance premiums would make nuclear power completely uneconomic.
“Renewables, demand management and storage can meet Australian energy needs safely and at best-cost. In a country with no existing nuclear industry and vast renewable energy resources, it makes no economic sense to establish nuclear generation.”
“A sensible, fact based conversation about nuclear power in Australia must start in economics, and given the industry’s dismal economic outlook, really that is where the conversation should end.”
The Australia Institute report which expands on its inquiry submission, Over Reactor: The economic problems with nuclear power, by Tom Swann and Audrey Quicke can be downloaded here.