Staff Writer | December 13, 2024 |
South Australia’s Olympic Dam copper, gold, uranium mine. (Image courtesy of BHP.)
Australia’s opposition leader, Peter Dutton, has unveiled a A$311 billion ($211bn) plan to introduce nuclear power into the country’s energy mix, a proposal that could radically alter the nation’s energy policy and its uranium mining industry.
The scheme, based on an economic modelling by Frontier Economics, proposes the construction of seven nuclear power plants by 2050, with the first expected to start operations by 2036.
If successful, the plan would transform Australia, which is grappling with rising energy demands and the need for more reliable and affordable electricity, into a nuclear-powered nation.
Dutton, leader of the centre-right Liberal Party, has positioned nuclear power as the cornerstone of Australia’s economic future, calling it essential for decarbonizing the grid, lowering energy costs, and ensuring a stable electricity supply.
“Nuclear power will underpin the economic success of our country for the next century,” Dutton said, according to Bloomberg. “This will make electricity reliable. It will make it more consistent. It will make it cheaper for Australians, and it will help us decarbonize.”
Leaders divided
The plan is already sparking fierce debate, as its success would not only transform Australia’s energy landscape but also change its uranium mining industry, which has long been restricted despite the nation’s vast reserves.
Australia is currently the world’s fourth-largest uranium producer and holds an estimated one-third of the planet’s known reserves. Yet, uranium mining remains banned in Western Australia and Queensland, two states with major deposits.
While South Australia is home to three operational uranium mines — including the Olympic Dam, which is the largest known uranium deposit in the world — mining activity remains limited. The other active sites, Four Mile and Ranger, have smaller footprints, with Ranger nearing the end of its lifecycle. This underutilization contrasts sharply with growing global demand for uranium as countries seek cleaner alternatives to fossil fuels.
Critics also argue that while Australia’s parliamentary Coalition, consisting of the Liberal Party and the Nationals, is dedicated to achieving net zero emissions by 2050, Dutton’s preferred approach would likely result in increased emissions leading up to that year.
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Climate Change and Energy Minister Chris Bowen warned that the situation would likely jeopardize Australia’s ability to meet the global goal of limiting climate change to two degrees Celsius. He pointed out that the modelling assumes electricity demand will rise less than the government anticipates, despite the expanding use of energy-intensive artificial intelligence and the surging popularity of electric vehicles.
Bowen described the plan as “a dangerous error,” cautioning that it could leave Australians without sufficient energy to meet their needs.
Advocates of Dutton’s nuclear plan believe that lifting mining restrictions is a logical next step to ensure a steady domestic uranium supply. Doing so could unlock billions of dollars in economic opportunities, attract foreign investment, and create thousands of jobs. Western Australia, for instance, could see dormant projects revived.
Canadian uranium giant Cameco (TSX: CCO)(NYSE:CCJ) owns the Yeelirrie project in the state. It acquired it from BHP (ASX: BHP) in 2012, but development has stalled due to the mining ban. Companies like Toro Energy (ASX: TOE) and Paladin Energy (ASX: PDN) are also poised to expand operations if restrictions are lifted.
The Minerals Council of Australia, a strong proponent of lifting mining bans, has long argued that Australia is well-positioned to meet global clean energy demand. It notes that countries worldwide are ramping up nuclear energy adoption, creating an unprecedented demand for uranium. Allowing more mining activity would enable Australia to play a larger role in the international market, challenging current leaders like Kazakhstan, Canada, and Namibia.
Exploration boom
The stakes for uranium mining in Australia are particularly high, given the nation’s geopolitical stability and abundant resources. If mining restrictions are lifted in Western Australia and Queensland, industry experts predict a surge in exploration and development. This could transform regions that are currently untapped for uranium into mining hubs, driving economic growth and strengthening Australia’s role as a global energy leader.
Dutton’s nuclear vision is far from universally embraced. The plan faces significant political and environmental hurdles. Prime Minister Anthony Albanese’s centre-left Labour government has shown no interest in nuclear power, focusing instead on expanding renewable energy sources like wind and solar.
Critics argue that nuclear energy’s high upfront costs and challenges with radioactive waste management outweigh its potential benefits.
Environmental groups have also opposed uranium mining for decades, citing concerns about ecological damage and contamination risks.
If Dutton’s proposal moves forward, it would also place significant pressure on Australia’s regulatory framework for uranium mining. The potential expansion of mining activity would require updated environmental guidelines, new infrastructure, and investments in workforce training.
Nuclear cheaper, cleaner option for Australia, says report
The Australian opposition says newly released economic analysis shows its plan for a balanced energy mix that includes nuclear will be cheaper, cleaner, and more consistent than the renewables-only approach favoured by the current government.
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The report - Economic analysis of including nuclear power in the NEM, from independent economic consultants Frontier Energy - models two scenarios: the Progressive scenario, which is consistent with the Australian Federal Coalition's policy of including nuclear power, and the Step Change scenario, which reflects the policy being pursued by the current Labor government and relies on renewables and energy storages. Both scenarios are included in the Australian Energy Market Operator's (AEMO) Integrated Systems Plan.
Many commentators compare the costs of renewable generation plus the costs of back-up generation to the capacity and operating costs of a nuclear power station, but this "simple and erroneous" approach is incorrect and misleading, the report says. This is because such an approach fails to account for factors such as the larger amount of renewable capacity required to produce the same amount of electricity compared to a nuclear power station, or the requirement to store surplus electricity from renewable sources as well as the back-up generation.
The Progressive scenario offers a potential saving of AUD263 billion over the period from 2025-2051 and is 44% cheaper than the Step Change approach, the report finds. A variant of the Step Change model that included some nuclear would also be cheaper than using renewables and storage alone, the report also notes.
"You can’t compare renewable energy and nuclear power generation and costs like apples to apples. We’ve done the modelling in these AEMO scenarios with a wider, and more detailed, lens on how the two options compare in real life, and the data speaks for itself. In both scenarios, including nuclear power in our energy mix is cheaper - by up to 44% - for Australians in the medium-term future," said Frontier Economics Managing Director Danny Price.
The report is the second part of a series from independent economic consultants Frontier Energy on modelling the economics of including nuclear in Australia’s National Electricity Market (NEM): the first part, released in November, established the base case against which to compare cost impacts based on the AEMO Integrated Systems Plan. Its release comes days after CSIRO, Australia’s national science agency, released for public comment the draft of its annual GenCost report - prepared in collaboration with AEMO - which questioned nuclear's cost competitiveness.
The Liberal-National Coalition, also known as the LNP, is a long-running alliance of the Liberal Party of Australia, led by Peter Dutton, and the National Party, led by David Littleproud. Today, Dutton, Littleproud and Shadow Minister for Climate Change Ted O'Brien said the Frontier Economics report "reveals the Coalition’s balanced energy mix, including zero-emissions nuclear power, offers a cheaper, cleaner, and more consistent alternative, delivering massive savings for Australian families and businesses" and also enable Australia to meet net zero emissions by 2050.
"This is a plan which will underpin the economic success of our country for the next century," Dutton said. "This will make electricity reliable, it will make it more consistent, it’ll make it cheaper for Australians, and it will help us decarbonise as a trading economy, as we must."
"If we look at the international experience - in Asia, in North America, in Europe, all of these countries have recognised the fact, firstly, that there is no hope of achieving net zero by 2050 without nuclear in the system firming up renewables," he told a press conference at which the costings for the Coalition policy were outlined.
Earlier this year, the Coalition identified several sites where it would look to build nuclear capacity - small modular reactors in South Australia and Western Australia and either small modular reactors or larger plants in New South Wales, Queensland and Victoria - if it is elected to power. Questioned about the timelines for a nuclear programme, O'Brien said the Coalition's plan is consistent with international averages, International Atomic Energy Agency guidance and advice from the Australian government's Nuclear Technology Agency. "So our plan is consistent with the best advice that you can receive - both domestically and internationally," he said.
Australia's Minister for Climate Change and Energy Chris Bowen dismissed the Opposition's costings as "dodgy" and containing "immediately fatal flaws", saying it had failed to address questions about household bills and the time taken to build nuclear power plants, amongst other things.
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