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Tuesday, 11 September 1984
Page: 778

Senator ROBERTSON —Has the attention of the Minister for Resources and Energy been drawn to recent statements claiming that the production of electricity using coal as a fuel is cheaper than electricity produced in nuclear power stations? Will the Minister comment on the validity of these claims and, if deemed valid, their relevance for Government policy?

Senator WALSH —I did see, yesterday I believe, a newspaper report sourced from the United States of America along the lines Senator Robertson mentioned. Regarding his final reference to the implications of that report for Government energy policy, I do not think there are any. Whether coal thermal electricity or nuclear produced electricity is cheaper is a function largely, indeed almost entirely, of the price of coal. Because Australia has, at least in all of those areas where there is a substantial electricity grid, abundant reserves of cheaply won and, in many cases, high quality coal, it is not likely in the foreseeable future-indeed it may never be the case-that nuclear generated electricity will be cost competitive with coal generated electricity in Australia.

I recall that the report referred mostly to the United States. I have not seen the original statement upon which the newspaper report was based. Assuming that the newspaper report gave a balanced and adequate assessment of what was contained in the original report produced by some other body, I believe it reinforces the sorts of things which I and other members of the Government have been saying for the last 18 months; that is, in the United States, and indeed in the world as a whole, as I mentioned, the relative cost efficiency of nuclear or coal thermal power is a function of the price of coal more than anything else. The relative competitiveness of nuclear power has probably deteriorated in the United States and in other places in recent years because of high interest charges.

Senator Peter Rae —More so in the United States than in other places.

Senator WALSH —Yes, they have had more construction problems there, but in a more general way it is because of high interest charges and the longer lead times between the commencement of construction and the production of electricity . The conclusions of the report were that in some parts of the United States coal thermal electricity is cheaper than the nuclear alternative, but the report I saw added that that does not necessarily apply and probably would not apply in those areas of the United States where there is a large demand for electricity and either no coal or expensive coal-because of the depth from which it must be dug, the type of seams from which it must be mined, or the distance over which it must be transported.