Nuclear & CCS: Wrong turn or right turn?

After all these years of numerous detours, blind alleys or failed energy plans, coupled with Peter Dutton’s nuclear challenge, it’s time for a clear-eyed look at some energy supply facts.

• What about nuclear, and what is the likely impact of the Liberal policy?
• What about carbon capture and storage (CCS) or it’s older cousin CCUS with the U standing for use, notably enhanced oil recovery?

This blog offers some pre-reading to help us get the most from Energy Policy: Fact or Fantasy with Energy Systems Analyst Dr Dylan McConnell, UNSW, on Wednesday 21st August at the Balwyn Park Centre – RSVP here.

Nuclear

Why nuclear? Our grid already has around 40% clean energy, and is decarbonising rapidly, through a combination of private investment and some public incentives, coordinated by AEMO’s overall Integrated Systems Plan (ISP), The latest release of the ISP can be found here. 

Renewables (large scale solar, solar PV and wind, backed up by batteries and pumped hydro) is the lowest cost generation and is growing fast.

The 23/24 GenCost report stated that “The LCOE (levelised cost of electricity) cost range for variable renewables (solar PV and wind) with integration costs is the lowest of all new-build technologies in 2023 and 2030.”

The Report included large scale nuclear as well as small modular reactors (SMR). Although it is difficult to translate from overseas experience experience, the report took costings primarily from Korea, added calculations related to inflation and other costs to arrive at a comparative costs that are 5-6x higher than firmed renewables. The Report also clearly states that there would be at least 11 years of tasks prior to construction and nuclear technologies would then be purchased in the 2030s.

So why nuclear? And what would it mean for our clean energy transition?

The Smart Energy Council’s analysis that building seven nuclear – reactors could cost “between $116-$600 billion of taxpayers’ dollars, whilst only providing 3.7% of Australia’s energy mix in 2050″, takes the GenCost price, and adds delays, overruns, and refurbishment of coal power stations needed while we wait for nuclear. Of particular note, $116bn is the same cost as transitioning our electricity system to renewables including firming and transmissions costs.

So for two to three times the cost of moving to clean energy we could:

• Build seven nuclear reactors that power around 4-5% of grid needs at 2050
• Delay the clean energy transition
• Keep relying on coal power
• Cost our climate four extra years worth of emissions

Let’s unpack the Smart Energy Council’s conclusions in more detail.

Prof Ian Lowe’s fact check

Emeritus Professor Ian Lowe, in an article in the Saturday Paper called ‘Peter Dutton’s Nuclear Lies’, takes issue with the modelling and assumptions behind the LNP policy, calling out the LNP press release for “a tsunami of misinformation” which “could have been designed to avoid serious evaluation of the proposal”.

Prof Lowe reminds us that the proposal is “totally illegal”.

• The Howard government legislated to prohibit nuclear power 25 years ago.
• Three states – New South Wales, Victoria and Queensland – have their own laws that would prevent building nuclear power stations.
• Legal advice for the Coalition says the laws could be changed, but that would require a majority in both houses of parliament.
• It is unlikely that the Greens would ever support nuclear.
• All Premiers for states where nuclear is proposed have come out against it.
• Queensland LNP representatives and candidates have distanced themselves.

Fact Check

Major points include:

• The proposal implies that nuclear would replace coal power plants which are “coming to the end of life over the next decade”. However the seven plant’s would at best replace only 30% of coal-fired generation.
• A second claim is that nuclear power is “zero-emissions” – however building a nuclear power station “requires huge amounts of fossil fuel energy, about what would be produced by four years of nonstop operation“, and operation is not emissions-free. “The dishonest claim of zero emissions implies we could use unlimited amounts and still meet our climate change obligations. In fact, building seven nuclear power stations would increase our greenhouse gas emissions and irresponsibly accelerate climate change.”
• The LNP states that nuclear is used “all over the world”, but it is used in only 30 countries, 160 countries don’t have it, Nuclear power stations are being closed due to maintenance issues and cost,

“The world pattern of investment is telling. This year, about 500 gigawatts of new renewables will come on line. Hardly any nuclear power stations will start up. The electricity industry has voted with its chequebooks.”

Professor Ian Lowe

• The LNP states that out of the world’s largest 20 economies “Australia is the only one not using nuclear energy, or moving towards using it” when six out of these 20 economies don’t operate nuclear: Germany, Italy, Australia, Indonesia, Türkiye and Saudi Arabia, and Türkiye is the only one moving towards it.
• The LNP claims that nuclear would deliver “cheaper, cleaner and consistent energy for 80 years.”  However “current world average prices and regular CSIRO GenCost studies show nuclear power is far more expensive than renewables with storage. Historically, nuclear power stations have typically lasted 30 to 40 years, not 80.” 
• Prof Lowe describes LNP’s time frame of 2035 for small reactors or 2037 for larger reactors to produce electricity as “jaw dropping” citing a new report from the Australian Academy of Technological Sciences and Engineering which shows “it is unlikely we could buy small modular reactors before 2040. They do not yet exist anywhere in the OECD.” Modern larger plans in Europe with an established workforce still run years behind schedule.
• The proposal compares the cost of an inflated “58 million solar panels and 3500 new wind turbines” to seven nuclear power stations with no costing provided that would only provide 6GW of power, around 5% of our electricity needs.

“Hinkley Point C in the UK was meant to cost about $20 billion, but the total cost is likely to end up close to $100 billion.”

Professor Ian Lowe

Four main arguments against nuclear

In a very readable summary article, Environment Victoria makes four main points:

• We have been here before! The LNP’s “new” nuclear policy had been previously rebutted in 2015 and 2020.
• Nukes would be a nightmare for our energy bills. Building a nuclear power station would cost at least $8bn if all went well, but given that this would be a new project for Australia the cost would be more likely to be an “eye-watering” $17bn.
• It would take too long. The most credible estimates suggest the first electrons would flow in 2040 whereas large scale wind and solar can be up and running in a mere 2 years.
• We don’t need it. Nuclear only produces inflexible baseload power when what our grid really needs is flexible power backed up by storage.

If Australia went nuclear, Environment Victoria states that waiting for nuclear would mean two billion extra tons of carbon pollution between now and 2050, analysis coming from Solutions for Climate Australia, according to the Sydney Morning Herald: “This increased reliance on fossil fuels would generate 2.3 billion tonnes more greenhouse emissions compared to the Albanese government’s climate policy. That’s more than five years’ worth of Australia’s annual emissions, which were 433 million tonnes in 2023.”

So this is what we’ve been reading. It’s a confronting and confusing picture, which is why we’ve invited independent expert Dr Dylan McConnell to speak to us on August 21st!

Carbon Capture and Storage (CCS)

Essential technology?

Oil companies have described CCS as “essential for helping society achieve net-zero emissions”. However a recent three year Democrat investigation, with key takeaways in this Pulitzer Centre supported story, which has found that while promoting CCS publically, the oil industry is now much more circumspect internally, where Shell’s benchmark predictions of 2,500 CCS facilities by 2050 and 70,000 by 2070 has been undercut by Exxon in 2018 projecting 250-500 by 2050, and states that “global scale is limited” for CCS and hydrogen tech by 2050. The article, citing David Schlissel from Institute for Energy Economics and Financial Analysis (IEEFA) who notes multiple industry reports suggesting that “this technology doesn’t really work”. 

CC(U)S has a long history

Energy finance analyst Bruce Robertson reminds us that before it was CCS (or CCUS), waste CO2 from gas extraction was commercialised in the 1970s for enhanced oil recovery (EOR) “injected into depleted oil and gas reservoirs to re-pressurize them and extract more hydrocarbons”. Later on this was rebranded as a climate friendly process, capturing carbon. However over 70% of CCS projects are EOR, driving up emissions through increasing carbon production.

Only 3% sequestered

The Shute Creek facility in Wyoming is often touted as a success, however according Exxon’s own analysis and an IEEFA investigation only 3% of the captured CO2 has been sequestered underground, with half being sold to oilfield operators for enhanced oil recovery and the rest just vented: “CCS/CCUS effectively extends the life of fossil fuel companies, giving them a licence to ramp up production.”  

Most gas emissions are downstream

Even if CCS was able to capture and store gas project carbon, the problem is that around 90% of gas project emissions are Scope 3, downstream, generated during transport and use. Describing gas as “carbon neutral” ignores the vast majority of its emissions.

CO2 is difficult to keep underground

The problem is that CO2 is difficult to keep underground, and has a way of leaking out. The pipes to transport the CO2 are “surrounded by kill zones” according to Carolyn Rasffensperger, ED of the Science and Environmental Health Network, pointing to accidents, poor modelling and lack of transparency about toxic impacts. 

CCS: a boondoggle extraordinaire?

Due to a recent US tax provision EOR can be used for US carbon credits, which are entirely self reported and unable to be properly checked by the EPA.

The National Observer report makes the point that CCS, is not only vastly expensive, capturing large amounts of public money for very small amounts of carbon: “What the IPCC actually said in its mitigation report was that carbon capture might be necessary for hard-to-abate industries, but that it’s one of the most expensive options and it only equates to small emissions reductions,” said Paul Blackburn, an environmental lawyer and advisor to the Bold Alliance, a nonprofit network of frontline communities focused on protecting land and water. “So we’re doing the most expensive, least applicable thing first rather than cheapest, easiest things first, at great expense to taxpayers and with no analysis of net climate benefit.”

Academic capture

If it seems difficult to sort fact and fiction regarding CCS, then academic capture may be contributing to the problem, for instance the University of Lafayette in Louisiana has embraced the fossil fuel industry, according to an article in the investigative reporting series Lens, detailing the story of an academic who was sourced to support CCS in state government decision on well installation, just one example of “strategic partnerships” between Universities and oil and gas firms that offer them funding, that may or may not be linked to positive testimony in hearings: “ExxonMobil donated $500,000 to the UL Lafayette’s energy institute and public policy center for “outreach efforts,” according to a university news release.”

Basic CCS Facts 

A recent IEEFA fact sheet on CCS states that CCS has a long history of failure and underperformance:

• “Three projects have failed” – Salah, Kemper and Petra Nova, causing massive financial losses
• Five projects underperformed materially compared to their own targets including Gorgon in WA, at 50%.
• Only three projects were performing close to capacity (though two of these have faced considerable geological and other problems)
• “It’s worth noting that not one single CCS project has ever reached its target CO2 capture rate.”
• “about three quarters of CCS projects are engaged in enhanced oil recovery, which creates more emissions, negating the initial reduction”
• IEEFA notes that the IPCC finds that CCS will only have a limited role in carbon sequestration, at best 2.4% of CO2 mitigation by 2030.