There has been a sudden outbreak of debate on nuclear power that has brought some unpredicted re-alignments of views. Leading the charge has been Bob Carr, Australia's most green senior politician and previously an indefatigable opponent of all things nuclear -- even waste repositories for spent medical materials.
Offering sympathy to the NSW Premier is Treasurer Costello and Deputy Prime Minister Anderson. Ranged against him are Premiers Beattie and Bracks as well as Commonwealth Energy Minister Macfarlane.
Nuclear power is clean and far and away the safest source of electricity. Even the badly run Soviet nuclear plants have proved to be operationally reliable -- the one disaster at Chernobyl in 1986 resulted in loss of life of some 31 people with around 10 further deaths from thyroid cancer. As the sole fatal accident this leaves nuclear far ahead of coal and hydro-electricity in its safety record. Storage of waste is low cost and, absent ill-informed political clamour, sites are easy to find. In cost terms, nuclear is competitive with other forms of electricity generation in Europe most of Asia and probably North America.
Propelling the current Australian debate is the sudden realisation that the demonisation of coal to which many politicians have conspired threatens some serious repercussions. For NSW, the need for new electricity generation plant was foreshadowed in the Green Paper the Department of Energy issued earlier this year.
That Paper deflated the notions that solar and other exotic renewals together with "smarter" energy use could provide the answers for NSW. At the political level this laid open the State's energy vulnerabilities. Having employed greenmail to undermine new coal fired stations and without access to major local gas reserves, NSW must either increasingly rely on other states for its electricity supply or seek a new solution.
For NSW to rely on inter-state electricity means higher costs than in Queensland and Victoria. Cheap power in Australia is not only a bonus for the householder, but is a magnet has been the backbone of the nation's manufacturing sector. It is one of the defining characteristics of the nation's comparative advantage.
Hence Mr Carr's humiliating retreat from an anti-nuclear policy that pandered to the economic vandals within the ALP and among its wider support group. By the same token, behind the equally loud anti-nuclear protestations of Mr Bracks and Mr Beattie is their states' low power costs that can attract investment from NSW as well as from overseas.
The tensions caused by politicians having cultivated vocal propagandists for greenhouse but also fearing higher power costs are not unique to Australia. But they are sharper here due to our low cost energy and our energy intensive industry's vulnerability to competition from developing economies that carry no Kyoto greenhouse tax baggage. Australia, somewhat uniquely, has even cheaper options to nuclear energy with its vast resources of easily recoverable coal. Queensland with the lowest cost coal reserves in the world has the most to gain and lose. Victoria is not far behind.
The cheapest source of nuclear power identified in a recent study by the University of Chicago uses a reactor process called Gas Turbine Modular Helium. This would be 35 per cent more expensive than coal based electricity generated in Victoria. However if additional greenhouse taxes were to be levied this would change markedly. The EU already has a limit on emissions which translates into a tax of around $30 per tonne. If levied in Australia such a charge would increase coal fired generation by 80-90 per cent (and gas by 40 per cent). This would leave nuclear (which would pay no CO2 charge) as Australia's cheapest option.
Australia already has several watered down versions of a carbon tax chaotically applied with different impacts in different states. Victoria has so far resisted pressure for such parochialism. Recent murmurings from the Prime Minister may foreshadow intensified carbon imposts. However, there is no prospect of the rapidly growing Asian economies, which are Australia's main competitors, adopting such measures. And the French and Dutch referenda on the European Constitution will damage the chances of a pro-Kyoto EU seeking to impose severe emission restraint policies on other countries.
Nuclear power stations may have a role in Australia but if economics is the determinant, it would only be a niche role. Adopting nuclear power here by taxing coal power out of competitiveness would destroy our cost advantage vis-á-vis other nations. To take up a slogan of the greens, "If nuclear is the answer for Australia, it shouldn't be".
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