The fate of nuclear energy in a hung parliament

Feb 4, 2025
Metaphoric: Flowers vs nuclear power plant.

Imagine this: scientists develop a new source of on-demand, clean, electricity. For about the price of floating offshore wind (i.e. more expensive than solar or onshore wind) it could pair with renewables and fully decarbonise the grid. How would politicians respond? Support from climate-concerned Greens, and opposition from Liberals?

But wait – isn’t this a description of nuclear power? Does this hypothetical suggest Australia has its nuclear debate backwards? What would this mean for Dutton’s nuclear agenda if the coalition forms government?

Motivated reasoning

Motivated reasoning describes when people process new information to confirm existing beliefs. It explains why different groups believe different facts.

Two examples: surveys show Coalition voters believe nuclear would lower electricity costs (False: new nuclear costs more than coal). Meanwhile, Green voters are most likely to think nuclear’s CO2 emissions are substantial (False: IPCC data shows lifecycle emissions are below that of solar).

Another sign of motivated reasoning: despite the emergence of climate concern and dramatic falls in the cost of wind and solar, party positions haven’t changed since the late 70s.

Liberals have always been open to nuclear power. However, since nuclear plants generally require state backing, conservative support waned with the rise of “economic rationalism” in the 1990s.

In fact, climate change was first discussed in Federal Parliament during a nuclear technology debate in 1979; Liberal Senator David MacGibbon warned burning coal risked “increasing the ambient temperature of the earth’s air”. Climate concerns reappeared the following year in public debate over the Victorian SEC’s proposal for a reactor at Portland.

Were it not for the rise of neoliberal ideology and privatisation of state electricity utilities, Liberal Governments might well have constructed nuclear plants when climate change first emerged as a public concern.

The Labor movement once supported nuclear too; the sector promised well-paid, unionised jobs. However, Gough Whitlam’s was the last supportive Labor government, owing to concerns for nuclear disarmament and the fear that civilian power would aid weapons proliferation.

Meanwhile, the Green Party’s origins are in campaigns against hydroelectricity and nuclear technologies. Ironically, these are still the two largest sources of carbon-free electricity. Teal MPs have largely inherited Green technology preferences, and have been consistent opponents of nuclear in Australia.

Over many decades multiple inquiries have found nuclear uneconomic without a carbon price. Coal offers Australia dirt-cheap base load power. Consequently, there’s no place for nuclear in a privatised energy market. Nuclear’s conservative supporters opposed a carbon price while its progressive opponents supported one. Stalemate.

John Howard nearly broke this deadlock when, ahead of his final election, he backed carbon pricing and commissioned the 2006 “Switkowski Report” into nuclear energy. Greens Senator Christine Milne retorted: “Nuclear is no answer to climate change. It is too slow, too expensive and too dangerous. Not one …reactor will come on stream within 15 years …we only have 10 to 15 years to turn around catastrophic global warming.”

18 years later, coal today supplies 56% of electricity. Were Switkowski’s reactors coming online now they’d replace coal stations one for one.

Greens were wrong in 2006. Yet, as the cost of solar, wind and batteries fall, the Greens’ “too slow, too expensive” argument has become received wisdom. Has nuclear’s day passed?

Motivated reasoning in the models?

There are two rival visions of zero-emission electricity. One is for 100% wind, solar and storage. This all-intermittent renewables grid is theoretically possible, but has never yet been built. South Australia is the global leader, pushing the intermittent frontier past 70% wind & solar (backed by inter connectors with Victoria).

The other vision is tried and tested: a grid dominated by clean ‘firm capacity’ generation from hydro, nuclear or geothermal.

SwedenFranceQuebecOntario and Tasmania all accidentally decarbonised their grids this way decades ago.

Which would be cheaper, faster and lower risk: working through the technical challenges of 100% renewables, or building a nuclear sector from scratch? It’s impossible to know for sure.

Nuclear’s opponents are correct to warn of “first-of-a-kind” costs. But an all-renewables grid would face “first-of-a-kind-anywhere-in-the-world” costs.

Estimating future costs is exactly the kind of place you’d expect motivated reasoning. The assumptions you make about say, nuclear’s capital cost and construction time, or the availability of distributed energy resources in a renewable dominated grid, determine your conclusions. This creates space for profound disagreements among well-meaning energy experts.

Australian economic modellers mostly back Labor’s renewables-dominated vision. Their findings reflect Australian public opinion. By contrast, leading American modellers find overall system costs are lower if decarbonisation strategies include one source of clean firm generation (hydro, nuclear, or geothermal), even if this firm capacity is expensive. In the United States, nuclear (and geothermal) electricity enjoy deep bipartisan support (The Biden Administration’s goal was to triple installed nuclear power).

Of course, modellers and their assumptions can be wrong. The consultants behind Labor’s ‘Powering Australia’ plan projected renewables (including legacy hydro) would supply over 50% of electricity by 2024. The reality: about 39%.

The Australian Energy Market Operator’s vision is not for 100% renewables, but for 90% renewables, backed by gas. AEMO actually recommends construction of 13 gigawatts of new gas capacity (approx. 26 plants) to back up renewables.

It’s the eye-watering difficulty of the last 20% of decarbonisation that justifies AEMO’s call for new gas as insurance against wind and solar droughts. However, it’s hard to imagine this vast gas capacity sitting idle. If renewables integration proves unexpectedly challenging, the grid will rely on more fossil fuels for longer. That’s what’s now happening with Germany’s struggling transition (the ‘energiewende’).

Continued reliance on fossil gas or coal wouldn’t trouble Peter Dutton. In fact, it’s probably one of the underlying goals of his nuclear policy. However, the likelihood that current policies will deliver a system in which renewables are backed by gas for many decades to come isn’t good news for achieving “net zero” emissions.

This all suggests a potential Teal (or Green?) case for nuclear: building firm nuclear capacity alongside renewables would reduce the risk of failing to reach net zero.

The end of climate denial?

Why has Dutton doubled down with support for expensive nuclear? Most political commentators assume it’s to switch the conversation from something that divides the Coalition party room — climate policy — to something that unites it. It also gives individual MPs cover to attack unpopular renewables projects and transmission grid extensions. Plus, it trolls the left: if warming is an existential threat, why oppose zero-carbon nuclear?

Nevertheless, the promise of publicly owned clean generation is an extraordinary backflip. Dutton’s nuclear agenda sounds more like Whitlam than like Howard.

Dutton’s nuclear agenda is also playing another, entirely positive role: providing cover for a retreat from climate denial. Across right wing media fulminating against climate alarmists has been replaced by fulminating against the hypocrisy of nuclear’s opponents. That’s a step forward which distinguishes Dutton’s Liberals from Trump’s outright climate denial.

Motivated reasoning has led all our political parties to adopt contorted positions. Chris Bowen being wrong-footed at COP29 by the US-UK nuclear deal demonstrates the risks.

If Teals hold the balance of power in the next parliament these contortions could unwind in surprising ways. The most likely outcome would see Dutton shelve his nuclear plans as part of negotiations to form government. Expensive nuclear was never a logical choice for a Liberal-National coalition with such limited climate concern.

However, the cross-benches would have another option. Rather than oppose Dutton’s reactors, they could instead hold the Liberals to their promises. The cognitive dissonance would be jarring. But the path to net zero is uncertain. If zero-emissions nuclear replaced fossil gas as the grid’s back-up technology even as we continue our renewable build-out, Australia’s climate goals might be the beneficiary.

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