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Standing Committee on the Environment and Energy
18/10/2019
Prerequisites for nuclear energy in Australia

BLAKERS, Professor Andrew, Private capacity

SENDEN, Professor Tim, Director, Research School of Physics, The Australian National University

STOCKS, Dr Matthew, Research Fellow, The Australian National University

STUCHBERY, Professor Andrew, Head, Department of Nuclear Physics, and Australian National University Energy Change Institute, The Australian National University

TIMMERS, Associate Professor Heiko, Private capacity

Committee met at 08:35

CHAIR ( Mr Ted O'Brien ): I declare open the public hearing of the House of Representatives Standing Committee on the Environment and Energy for the inquiry into the prerequisites for nuclear energy in Australia. The inquiry terms of reference asks the committee to examine circumstances and prerequisites necessary for any future government's consideration of nuclear energy generation. In accordance with the committee's resolution on 24 July 2019, this hearing will be broadcast on the parliament's website, and a proof and official transcripts of proceedings will be published on the website. Those present here today are advised that filming and recording are permitted during the hearing. I remind members of the media who may be present or listening online of the need to fairly and accurately report on the proceedings of the committee. I now welcome an eminent panel to give evidence today.

Prof. Timmers : I am a nuclear physicist. I am a research scientist and a physics lecturer at UNSW, Canberra.

Prof. Blakers : I am from the Australian National University and a professor of engineering.

Dr Stocks : I am a research fellow at the Australian National University in the Research School of Electrical, Energy and Materials Engineering.

CHAIR: Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standard as a proceeding of the House. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite each of you to make a brief opening statement before we proceed to discussion. I am flexible as to who wishes to go first, but we can go in reverse order, if you like. Maybe we can start with Dr Stocks.

Dr Stocks : I am quite happy to go first. Am I allowed to use pictures?

CHAIR: Of course.

Mr ZIMMERMAN: It usually helps with politicians!

Dr Stocks : Excellent! Thirty-one years ago, I sat in a seminar at ANU and I said that nuclear was the solution to climate change. I believed at that time that that was the way we should be going forward and that we did not really have an alternate solution. My view has changed significantly in that 31 years. I believe that we need to act on climate change in a time frame which does not lend itself to Australia now shifting towards nuclear being a big part of that solution. I think that is really supported by what the world's view is in terms of change at the moment.

My very nicely torn graphic, which I should have been a little bit more careful with, shows the installation rates of different technologies around the world. We have solar, wind, gas, coal, hydro and nuclear on this picture. The challenge that we face around climate change is that we need to act rapidly if we want to change our emissions, and the only technologies which are going to enable us to do this are the renewable technologies and not nuclear. The rate at which things are changing at the moment means that it is very difficult for nuclear to catch up. One of the beauties of the technologies that are being installed is that, the more that we install something and the more we make something, the cheaper it gets. We then learn how to do it better and therefore we make more of that and it gets cheaper and better again. Nuclear, unfortunately, is heading in the other direction because of the challenges associated with Fukushima.

The second point I'd like to make is around nuclear's perceived importance as a base-load generator. One of the interesting things that's happened over the last couple of years is that there's been a fairly dramatic change in the conversation around the need for base load. This is a profile of last week's generation in the Australian National Electricity Market. The idea of base load is that it operates from zero to the minimum amount of energy we need at any one time. We've got brown coal and black coal chugging away in the background. That's the way it's always been, and therefore that's the way we should operate the system in the future. We've got his little bit of wind and solar sitting on the top of it. That's okay; it can just play around in the background. We'll just bring nuclear in and we'll replace the coal with nuclear.

I think the AEMC's submission, while quite subtle, kind of bluntly pointed out that nuclear doesn't fit in with future scenarios as we start to transition further in the mix. The language they used was very much around flexible and dispatchable energy, and was reasonably dismissive of base load. The reason for that, I think, is if you start to think about this graph. This is exactly the equivalent graph for South Australia for last week. There is no room for base load once you take out the wind and the solar. South Australia closed its last brown coal generator three years ago for this very reason. A system which is dominated by renewable energy—that is the only technology that we're going to install in Australia in the next 10 years—doesn't have room for something which runs 24/7. We have periods in South Australia, which is 50 per cent renewable—it's not 100 per cent; this is at 50 per cent renewables. There isn't room for something to run 24/7.

The way the system needs to evolve is towards something which has lots of transmission. South Australia exports sometimes and imports energy at other times. The next step we're going to move towards is needing lots of storage to be able to shift this energy from these periods of lots and lots of excess generation to the periods where we have a shortage. At the moment, gas is flexible and dispatchable. As that starts to move out, as we continue to decrease our carbon emissions, there's going to be a need for storage. Whether that storage comes from hydrogen, batteries or pumped hydro is still an open question. But our future mix is going to be dominated by variable renewables, storage and a real need for lots of transmission to be able to move energies from regions which have lots of it on this day to another state and another region at other times.

While I would have sat here 30 years ago and said, 'I think we need nuclear as part of the mix,' it's really challenging to see, given the trajectories that we need to make around carbon emission reduction and where the economics of wind, solar and storage are moving to see that nuclear should have a significant role in our mix moving forward.

CHAIR: Before we move on, I just want to confirm: are you happy to table those documents?

Dr Stocks : I'm very happy to table those documents. I will produce one that is less torn!

CHAIR: Thank you. If you can denote the source from which they come when you do so.

Dr Stocks : Absolutely.

CHAIR: We appreciate it.

Prof. Blakers : Thanks very much, Matt; that was a good segue to what I wanted to say, which is quite short: nuclear missed the boat. You can go to the World Nuclear Association website and you can look at the energy and capacity of nuclear year by year and month by month. The total energy produced last year from nuclear was the same as 10 years ago. The nuclear industry has not grown at all in terms of energy generation in the last decade. The power capacity of all those reactors has increased by 23 gigawatts; that's an average increase of 0.7 per cent per year—very, very slow growth. Compare that with PV and wind, which are growing at tens per cent per year.

You have to ask: why is it that nuclear is completely stagnant and renewables are now two-thirds of global net new generation capacity, and 100 per cent in Australia? The answer is very simple: renewables, like wind and solar, are much cheaper than any alternative, including nuclear. That's why almost all new generation capacity in Australia, and most of it around the world, is wind and solar. This is not likely to change any time soon because the cost of wind and solar are now low. They continue to fall year by year and they will continue to fall throughout the 2020s.

By the time we get to 2030, which is the earliest possible time that you could have a nuclear reactor ready to go into service, if everything went right, wind and solar will be up around 80, 90, 100 per cent of all electricity generation. There will just be no room for nuclear on a gross generation side of things, let alone the need for flexible operation in the face of the high level of renewables, which Matt just alluded to. In short, nuclear missed the boat because it is too expensive. It doesn’t really matter if we legalise nuclear, or whatever, it just can’t catch wind and solar; they're so far ahead now.

Prof. Senden : Thank you for the invitation to be here today and present. It is very pleasing to be here for the first time at an inquiry. I represent the Research School of Physics at the Australian National University as director. My colleague, Andrew Stuchbery, is head of nuclear physics at the ANU. It is that community that I specifically want to focus on. It's a community that has had 70 years of contribution to an internationally recognised research program in nuclear physics. At the centre of that program is an internationally significant facility and a uniquely configured atom smasher—or heavy ion accelerator—operated on behalf of the country. It affords us a key position in the international community to contribute to both fundamental and applied nuclear science, spanning experimental cosmology and, dating groundwater, even to building our understanding of the principles of hadron therapy.

Specific to this inquiry, our graduates can be found in all relevant Australian and international agencies, from ASNO to the IAEA. This represents a significant technical contribution in the maintenance of several international treaties and the permanence of our seat on the board of governors in the IAEA. I believe it is the advanced technical and research training that is at the heart of our contribution to this inquiry and it spans all aspects of safety, security and safeguards that define this sector. This really underpins Australia's responsibilities to act responsibly in a global community.

The school was founded to cement the interface between physics and allied engineering disciplines and the pursuit of frontier science. To this day, Oliphant's legacy endures, and is embodied in the large technical workforce capability in the Australian university sector. This capability enables the design and translation of novel instrumentation, ranging from advanced detectors, 3D inspection equipment, through to meta-optic materials and quantum memories. Our experience in instrumentation is best exemplified by the contribution to the recently awarded ARC—Australian Research Council—centre of excellence in dark matter particle physics, in which we will design, construct and characterise a family of detectors for the Stawell underground mine in Victoria.

In our submission, we aim to highlight that our school can contribute to some key elements of any undertaking for our future national program in nuclear energy by providing advanced technical training and assessment, the capability to monitor nuclear processes and materials with unique sensitivity, and the ability to translate fundamental research into applied outcomes.

Prof. Timmers : Thank you for giving me the opportunity to present my arguments to you today. I think that Australia should expand its generation capability of electricity from renewables and, along with that, also invest heavily and vigorously in electricity storage and grid fortification, rather than short-term purchase or the building of nuclear power stations. There is no business case in the short term to do that. However, given that renewables may not be alone sufficient to achieve decarbonisation, I think also that Australia needs to be very much more engaged with nuclear technologies, so that Australia is prepared to possibly make a decision for nuclear power in the future. That cannot be done right now because there is no business case, there is no community licence, there is not enough technological expertise in the country.

My thinking is in line with two publications which I would like to table as supplementary evidence, if that's possible. The first of those is a report which came out last month in September by the independent US Energy Information Agency and it models in a reference model the electricity generation on the worldwide scale until 2050. That reference modelling shows that there will be a dramatic increase in renewable energy generation worldwide, effectively a tripling. By 2050, in this model, 50 per cent of worldwide generation will come from renewables. However, due in particular to demand from non-OECD countries, the fossil fuel generated electricity generation will stay effectively the same as it is today. So the world may not achieve decarbonisation by 2050. Also, it is interesting and important to this inquiry that nuclear power electricity generation on a worldwide scale will effectively stay the same as it is today. What does that mean for Australia?

Australia has to take this situation into account. From an Australian perspective, it might mean that the world might not achieve full decarbonisation by 2050 and the world will be facing climate extremes. We have to deal with climate extremes in the future because global warming, CO2 emission, is a worldwide problem. It also means that a lot of countries in our neighbourhood will try to lower their own carbon footprint using nuclear power and they will be interested in buying Australian uranium to do that and to achieve that lower carbon footprint.

I am also guided by a second paper that has come out just this month by a German research collaboration that models economically the decarbonisation of the European electricity sector—Gabolet and others from the Technical University of Berlin. In that model, they predict that full decarbonisation of the European electricity sector can be achieved until 2050 by solely relying on the expansion of renewable energy sources in an economical, cost-effective way and, ultimately, over the last 15 years of that period with about a 50 per cent reduction in the electricity prices. They show in this model that this can be achieved without additional nuclear capacity in Europe. The existing nuclear power station in Europe will phase out. They have included nuclear power in their modelling at an investment cost of the order of A$7,000. Even at that level, nuclear is not competitive to contribute to the decarbonisation of the European electricity sector.

I note, however, that the authors emphasise the importance of electricity storage and while, economically in terms of the investment costs, this is not a large factor in Europe, it is however crucial to achieve the decarbonisation. It is also important to note that the European electricity market is about 20 times that of Australia and that it is already much better interconnected and features a much more diverse suite of generation technologies. The European results and prediction cannot be directly transferred to the Australian situation. What does that mean in my view for an Australian generation policy? How should we go about generating electricity in Australia?

I think we need to be guided by these two publications and others along the same lines, which say that there is a boom in renewables happening right now. In fact, as Andrew pointed out, Australia is leading the way at the moment in terms of installation rates of renewable energy sources. We certainly should ride that wave, but it's also important to realise that as soon as you achieve penetration of renewables that exceed 50 per cent—other papers quote 70 and 80 per cent—then it becomes an uphill battle because you have to compensate for variability with electricity storage. The European authors—this paper by Gabolet that I have just tabled—point out that in Europe this is not necessarily achievable with pumped hydro because they think all possibilities in Europe are exhausted. They, therefore, say that this has to heavily rely on lithium ion battery storage technology.

We've got the largest lithium ion battery in the world in Australia, at Hornsdale. It's just been installed. That's 100 megawatts. But in order to operate 100 per cent renewables you need, as a rule of thumb, about the peak demand in terms of electricity storage. For Australia that would be about 20 or 30 gigawatts of power. So you can see that, if you extrapolate from 100 megawatts and also if you consider Snowy 2 is about two gigawatts, we need in Australia much more electricity storage capacity and not just for an hour, as is achievable at Hornsdale. It has to be sustained over about eight hours. So we need a more electricity storage by a factor of 10 or maybe 100 through batteries or pumped hydro to actually run renewable electricity generation in Australia.

That means in 20 or 30 years time we might actually have reason, because of the environmental challenges and because renewables might not fully allow us to supply electricity, to be interested in new nuclear power technologies which are available. Possibly then there might be SMART reactors or there might be Generation IV technology. But in order to be ready for a decision then we need to start engaging with nuclear technology now. We need to start to prepare the country technologically and we also have to take along the Australian people to be prepared to make a decision pro or contra nuclear power in maybe 10, 15 or 20 years time.

This means we should engage at different levels. For example, an energy information agency like the US agency that produced this report might be an option for Australia to be an intermediary between the public and their expertise. That could include expertise on nuclear power. We should also strengthen our research activity in nuclear technology.

There are business opportunities, too. For example, the royal commission in South Australia has identified the long-term storage of high-level radioactive fuel elements as a business opportunity that could be pursued. There is certainly a necessity to finally realise the intermediate- and low-level storage of radioactive waste in Australia. This would show to the public that Australia can manage nuclear technology successfully and that would create trust and confidence that possibly nuclear power could also be managed in the future.

CHAIR: Thank you very much. Professor Stuchbery?

Prof. Stuchbery : I am the head of the Department of Nuclear Physics at the Australian National University and we operate Australia's Heavy Ion Accelerator Facility, which is an atom smasher that's the best of its type in the world. That means that we have a prominent and unique role in nuclear physics research and education in Australia. In fact, our pure and applied research programs and educational activities are strongly linked both nationally and internationally. One example nationally is that I am also node manager for the recently announced ARC Centre of Excellence for Dark Matter Particle Physics and I was a member of a steering committee for the Stawell Underground Physics Laboratory, which is under construction at the moment in the Stawell Goldmine in central Victoria. This will be the first low-background-radiation laboratory in the Southern Hemisphere.

Of relevance to this inquiry is that, beginning in 2007, I helped set up and then develop the Master of Nuclear Science program at ANU. It caters to a broad audience and encourages fact based discussion on nuclear issues and provides training for those working in areas of nuclear safety, nuclear security and nuclear safeguards. I lecture on nuclear reactor science. More recently, we have distilled this program down to a week-long intensive course that we run for Commonwealth government agencies, particularly those concerned with the maintenance of treaties and security. We've trained personnel for ASNO, the Australian Safeguards and Non-Proliferation Office; for ARPANSA, our regulator; and for ANSTO. I'm particularly proud of the number of people we've placed at the International Atomic Energy Agency headquarters in Vienna, working particularly in safeguards—that is, the nonproliferation of nuclear weapons. I'd like to make the point that, should the need arise in future, we have the capability to build training programs for personnel to operate and, importantly, regulate any nuclear power generation in Australia.

I am also representing the ANU Energy Change Institute, as its director, Ken Baldwin, is unable to attend. Matt and Andrew are also members of the Energy Change Institute. The ECI provides leadership in energy research, education and public policy across the broad portfolio associated with moving to a sustainable and predominantly renewable energy future. The ECI itself is technology agnostic, and its submission to this inquiry has focused on the findings of a symposium it organised after the South Australian royal commission on the nuclear fuel cycle. That symposium was organised in collaboration with Engineers Australia, the Australian Academy of Science and the Australian Academy of Technology and Engineering. The outcome of that symposium was that it broadly supported the recommendations of the royal commission.

I'll conclude with some observations of my own that I believe reflect Ken's view as well as my own. I think the sentiments here are broadly consistent with all that's been said by my colleagues on my right. Historically it's a fact that nuclear electricity production has reduced fossil fuel consumption and, hence, CO2 emissions. It's ironical that Germany shut down their nuclear power and their CO2 emissions went up; they're burning more coal. A nuclear power plant is a direct substitute for a coal-fired plant. One needs to take that into account when costing it, and often that is not done. I agree with Matt and Andrew that, in the next decade, it is very clear that renewable energy will continue to grow and its installation costs will continue to fall. What is less clear is what the costs are going to be associated with the intermittent nature of renewables in terms of new transmission lines, storage facilities and smart grids, particularly as you get high penetration—as Heiko said, 80, 90 or 100 per cent. So these costs will grow as renewables become an increasing fraction of the energy mix. We haven't done it yet; I don't think we can be totally sure what it will cost to ensure continuity of supply. Some nuclear electricity production together with renewables might prove to be a reliable, economical, sustainable and CO2-free energy solution in the future. I think we should keep that open as an option for future generations of Australians.

CHAIR: Thank you, Professor. Let us start by asking some questions. On your last comments about the uncertainty of ensuring continuity of supply as renewables go up: trying to understand the economics of that is something that this committee has been concerning itself with. We have had a range of views put. The submission I'm looking at that actually has some numbers in it, which I haven't seen before, is Professor Blakers's submission; you've provided some numbers here. You say that:

The cost of hourly balancing of the Australian National Electricity Market for 100% renewables has been estimated at about $25/per Megawatt-hour (MWh).

So it is $25 per megawatt hour to firm up renewables, basically. Could you talk us through that. It seems particularly low, I would have thought. What are the assumptions there? Do you know much about that work?

Prof. Blakers : Yes, because it's our work—well, the work of Matthew and myself and a couple of colleagues. We published a paper in 2017. We can send that paper through for tabling if you wish. The cost of balancing 100 per cent renewables has three components: storage, transmission and occasional spillage—when all the storage is full and you've got lots of wind and sun. The three components are roughly equal. Transmission is required so you can shift energy from a place where the wind and sun are good to where the wind and sun are bad, on a particular day. Storage is to time shift so that if it's a very sunny, windy day, like yesterday, we can store for a day in the future when it's not sunny and windy. Spillage is required because if you build enough storage to absorb all the solar and wind then you'll have built storage that you use once every five years and you're paying for things you don't need. So it's a balancing. Basically, the cost of wind and solar now is about $50 per megawatt hour. If you want to firm up 100 per cent wind and solar you'll add $25 on top, so you'll get to $75 a megawatt hour. That $75 a megawatt hour is below the spot price in every state in all periods in the last financial year; in other words, a fully backed up, firmed solar-wind base with some existing hydro is cheaper to run than the entire current electricity system, and this reflects the fact that wind and solar just keep falling in price.

CHAIR: I'm just having a look at your submission. You talk a lot about pumped hydro. Do you assume that pumped hydro is the firming up source?

Dr Stocks : Could I intercept there again in terms of thinking about scale. I will refer to pictures again and come back to this image. This is South Australia's demand for a whole week. Peak demand in this week was 1,600 megawatts. Snowy 2.0 is 2,000 megawatts, so Snowy will store enough energy for the entirety of the electricity supply for South Australia for a week. The scale of storage that we need to achieve in Australia is not very much more in terms of energy capacity than Snowy has, but we do need more power. There were comments made earlier about needing something around the 20-gigawatt mark. That is probably about the right order of magnitude, our peak supply.

CHAIR: Thank you. Just to get the answer to my question: is the assumption based on pumped hydro?

Dr Stocks : Yes. Pumped hydro is the storage means that we assumed for that study.

CHAIR: What are you assuming? How many pumped hydro plants would be needed?

Dr Stocks : That's where the 20 gigawatts comes in. It's not so much a question of how many plants. If you use Snowy as the metric it would be 10 Snowys in terms of power, but it's probably only about another Snowy in terms of energy, in terms of the amount of water. There are two parts to a storage. It's how fast I can get the energy out—

CHAIR: So how many—

Dr Stocks : Ten Snowys in terms of power—

CHAIR: When it comes to assumptions—because it seems like a low cost, but you're the experts, not me—what about things such as land acquisition? How was that assumed in your modelling?

Prof. Blakers : The amount of land required to provide the storage required for 100 per cent renewables is about 40 square kilometres for the whole of Australia. That is vastly less than the area of land required for the wind and solar farms that would feed that energy.

CHAIR: That's fine, but what cost did you assume for land acquisition in your modelling?

Dr Stocks : I expect the model will not be a land acquisition model; it will be a lease model. When somebody develops a wind farm in Australia, what you do is negotiate with the landholder and say, 'I'd like to put in these wind turbines in this space,' and—

CHAIR: So what was your leasing cost assumption? I'm only asking this because you actually did the modelling yourselves.

Dr Stocks : It's incorporated in the overall cost of the system. There's earthmoving—there's a whole collection. The assumption behind ours, working with companies like GHD and Black & Veach, in terms of hydro consultancies is that we're coming to numbers like about $800 a megawatt hour for the power component and $70 a megawatt hour for the energy component of the storage. That incorporates all costs—that is, electricity—

CHAIR: And that's stations and connections?

Dr Stocks : So separating out one component—

CHAIR: If you don't have now, that's fine, because I didn't put you on notice beforehand. Are you able to provide that model so that we can have that reviewed?

Prof. Blakers : Yes, we can provide that.

CHAIR: Thank you.

Prof. Blakers : Perhaps I can just add that we did a global survey of pumped hydro around the world. We found 616,000 sites with a combined energy storage of 23 million gigawatt hours. This is about 100 times more than required to support a 100 per cent global renewable electricity system. In Australia, we found 3,000 sites with about 300 times the energy storage capacity of what we actually need. So there is absolutely no shortage of pumped hydro opportunities in Australia, or anywhere in the world.

CHAIR: Thank you, and by providing that model we can at least look at those assumptions in detail. Was that model peer reviewed?

Prof. Blakers : Yes. We'll send through a bunch of papers which have all of this information in detail and peer reviewed and referenced.

CHAIR: Excellent. Thank you very much.

Mr JOSH WILSON: Professor Blakers, you talked about the elements that are required as part of making progress towards the task of firmed renewables. AEMO came to us in our very first hearing and said that from their point of view firmed renewables were well and truly the most cost efficient form of new energy generation, but I think in the public mind the understanding of what the 'firmed' part of firmed renewables means is a bit underdeveloped. I take you first to the transmission part of it. What changes are required at the government level in terms of policy and national leadership to start to address the transmission challenges?

Prof. Blakers : There needs to be change to the rules around developing a new transmission line. At the moment those rules are great for a fossil fuel system. We don't have a fossil fuel system; we have a very rapidly developing PV wind system. So we need to quickly and radically change the rules under the energy grid that we have to allow companies to put in transmission quickly at high capacity.

Another very good approach is to look at Renewable Energy Zones. You would find maybe two or three in each state, and you would say: 'This is going to be a Renewable Energy Zone. We are going to facilitate a two, five or 10 gigawatt power cable to that zone. This zone has good wind, good sun and probably good pumped hydro.' For example, in Queensland, you would say let's put it five or 10 gigawatt cable from Townsville down to Brisbane or Sydney. You might have another renewable energy zone around Goulburn, another in western Victoria to pick up wind, another in central South Australia just in the northern Flinders Ranges to pick up great wind, great sun and pretty good pumped hydro to transport power east. So Renewable Energy Zones are very straightforward. Lots of people have talked about them. It's just a matter of changing the rules to make sure that they actually happen quickly.

Dr Stocks : Can I add something to that?

CHAIR: Sure.

Dr Stocks : The Finkel review reviewed the NEM in 2017, and there were 50 recommendations that came out of that. A number of those were focused directly at transmission. So there's recognition that the current transmission rules don't suit well to a very rapidly transitioning energy system. One of the key recommendations that Finkel made was that the Australian Energy Market Operator should go and model what the system looks like into the future to try to understand how the system was going to evolve, and to then look at what the transmission was that was required to support that, and if they didn't fit within the regulatory framework that they should then look to government to work out how to deliver those projects. That's one of the recommendations. Both of those recommendations were accepted as two of the 49 recommendations, it was widely said, that people were willing to adopt that came out of the Finkel review. So there are changes around government potentially intervening in transmission. The new version of the ISP is going to come out the middle of next year. It's going to be looking at carbon emission reductions which are commensurate with the IPCC recommendations of reductions in carbon emissions, and that level of low emission generation in the mix will lead to a certain need for changes in transmission. I would be suggesting that government should be looking to work out how to support the development of that transmission in a timely fashion.

Mr JOSH WILSON: Just to pick you up on that: based on what Finkel recommended and looking towards that modelling, and then the consequential planning and coordination of change, what's your view of how that is occurring? You mentioned the review that will land next year. But post Finkel to where we sit now, is that sort of modelling, planning and coordination of the kinds of policy settings and transmission infrastructure upgrades that will follow happening at the moment? Or is this still all just sitting there in abeyance?

Dr Stocks : The first integrated system plan that AEMO released was released last year. It recommended looking at Australia going to 26 per cent renewables, which was in line with the Paris targets, assuming that all emissions were only reducing electricity—

Mr JOSH WILSON: Sorry, you said 26 per cent—not renewables but 26 per cent emissions—

Dr Stocks : It's a 26 per cent reduction in the system. That required two transmission upgrades; there was one between Queensland and New South Wales and one between South Australia and New South Wales. Both of those have progressed through the planning stages because they were triggered by that review. The expectation is, because of the emissions reductions commensurate beyond that 26 per cent level, that it's likely to require significantly more. Those announcements are still to be made in terms of what those sorts of upgrades are going to be, and then we're going to have to look to see whether or not government policy will support those or whether there's going to be a need for new policy and regulation to enable those to be unlocked.

Mr JOSH WILSON: The other thing that we keep getting lots of different views about, and we've heard a range from the panel, is where the penetration of renewables gets to. A lot of people basically say that at some point we're going to get to a penetration of renewables and it's just going to create this big problem; we're going to come up against this residual baseload need, and the only thing we can do if we want to be zero carbon is to replace hydrocarbons with nuclear. I'm just interested in if you think there is any basis for that sort of view, that we can never get beyond 50, 60 or 70 per cent.

Prof. Blakers : No, you can never get beyond 100 per cent, and 100 per cent is technically straightforward. It's also not very difficult economically. The issues are, in Australia at least, largely political. People are arguing about what the future of renewables is and not actually getting on with dealing with the transmission storage required to support high levels of renewables. It's not that the government has to pay for this transmission storage. There are certain rules that have to be changed to allow companies to pay for this storage and transmission.

Mr JOSH WILSON: There might be other views on the panel, Chair.

CHAIR: I was going to say, yes. That's why we open it up to other people. Professor Stuchbery?

Prof. Stuchbery : I would be a little more cautious. Things get more expensive as you get closer to 100 per cent generally. In the early days of nuclear power, somebody made the pronouncement that it was going to be too cheap to meter.

I think that we should definitely pursue these things that Andrew and Matt are advocating. I am a nuclear physicist; I don't have time to investigate these economic questions, and so my colleagues are more expert in that sense. But I do hear other views. To be fair, probably the more conservative the power engineer is then the lower the limit on the extent of penetration. But I think it would serve us well to have a little bit more discussion on this. I'm sure Matt and Andrew would welcome some independent scrutiny, because if it ratifies what they say then great. I think we need to keep this question open a little bit because I do hear dissenting points of view.

Matt was showing electricity in South Australia. South Australia buy in electricity, and when they buy it in they buy it in from Victoria. Historically, that's meant buying electricity generated by brown coal. So the actual CO2 emissions aren't always great because of that buying in of the dirty power. These things are complex, and can be nuanced. I'm not here to particularly promote nuclear energy. In some respects, we don't need an inquiry into nuclear energy; what we need is a good energy policy for the nation going forward that might include some nuclear energy.

Prof. Timmers : I could add to what Andrew just said. I refer you to the research paper, from this month, from Europe that I've tabled. It includes simulations for the demand and generation capability for Germany and Italy as two extremes. You have 100 per cent renewables expected in 2050 in the Italian case, which is possibly closer to the Australian situation. You have more contributions from photovoltaics. This is the graph. I'll submitted to the inquiry. You can have a closer look yourself later. What the modelling shows is that, for a winter day in Italy, you need 20-40 gigawatt storage capacity. We talked about that. The 100 per cent renewable penetration, really, in my view, hinges heavily on the question of whether we are able, in Australia, to install that sort of electricity storage capacity in the next 10 years. If the boom of renewables continues, as Andrew predicts, then we also have to accompany that with a lot more electricity storage. The figure of 10 Snowy 2.0s was brought up a moment ago. That gives us an idea of the capacity that is required—10 times. If you think about it in terms of the lithium-ion battery—the world's biggest one, as I said, is in Hornsdale—we would need 100 of those. That all has to happen over the next 10 years to actually operate a fully renewable system.

The modelling for Italy in this paper shows that, even though the Italian electricity grid is twice as large as the Australian grid, in this extreme situation they can't fully rely on the electricity storage. They will have to import. Over the two-week period, I can see here right away that there were 12 occasions when they imported electricity from Switzerland and France on top of what they stored themselves in Italy. So it depends very much on the size of the grid. The Australian national grid is half the size of Italy and one-twentieth the size of Europe. Western Australia is much smaller. These effects are therefore expected to be much more extreme and much more difficult to manage in Australia.

Dr Stocks : Could I table another image. This is the fuel mix in South Australia over the last decade. The purple area, down the bottom, shows the imports of brown coal from Victoria. This is existing brown coal in South Australia. This is the point where brown coal is switched off. This section down here shows very little imports from South Australia. South Australia is predominantly exporting electricity. So the suggestion that wind and solar is increasing the need for brown coal in Victoria is a misleading statement—

Prof. Stuchbery : That's not what I said.

Dr Stocks : No, but the connection to that is, I think, misleading—around how this transition is occurring. There is definitely a need for export and import within those systems and there's going to be an increase in the need for that. This is the idea around transmission and interconnection that's going to be needed to be developed. The second comment I would make is that we are not Europe. Europe is very, very different to Australia. It has a very high population density. It is not a good solar resource. They have relatively high difficulties in developing those resources because of the population density. One of the challenges within this entire energy transition is that Germany has a very high presence in this. They publish very heavily and people look to Germany as the expertise. One of the things we need to do is recognise that Australia is quite different. I worked for Origin Energy for 10 years and I remember a conversation with Grant King, who was the CEO of Origin at the time. The conversation was around Origin's job to identify energy resources and, as efficiently as possible, take them from being a resource to a usable output. If they could do that better than anyone else, then they would be the best company in Australia in the energy space. I think that's the philosophy Australia really needs to look to here: what are our energy resources, and where do we have an advantage? There is absolutely no question that, from a space and a quality of resource perspective, Australia is the best country in the world in which to install renewables, and, while we have uranium, we do not have a technical advantage in that space. We will not transform uranium into electricity more efficiently than anyone else in the world. It's just not something we're going to be capable of doing.

Prof. Timmers : And, Matthew, we're talking about the last 20 per cent and the entirety of Australia, not just South Australia.

Dr Stocks : We have published a peer-reviewed—

CHAIR: You finish your point, and then I want to go back to Professor Stuchbery, who can respond to your claim of someone being misleading, and then Professor Timmers, and then we'll go to Mr Zimmerman.

Dr Stocks : The work that we did around 100 per cent renewables was: we took the Australian Energy Market Operator's assumptions about how wind and solar would produce electricity over five-year periods, and we let the computer work out where the best place was to put transmission, where the best place was to put storage and where the best place was to put the wind and solar and allowed the system to balance supply and demand for a five-year period. This is peer-reviewed work. It is using other people's assumptions. The only assumption that we changed was: instead of assuming that we used geothermal and that we needed solar thermal, we'd just use pumped hydro as a storage mechanism. So that peer-reviewed work has shown that we can balance supply and demand—for five years; that's only as far as the AEMO data went—meeting the 99.9998 per cent reliability standard for Australia, for five years, no problem. The integrated system plan that AEMO is developing at the moment has huge amounts of resources coming into it, and I would suggest that people look very strongly to that, in terms of what the cost is and how this energy transition is going to occur in as efficient and smooth a way as possible.

CHAIR: Professor Stuchbery, do you want to—only if you want to—take the opportunity to respond to those comments?

Prof. Stuchbery : I'll pick up on a couple of comments. I don't disagree strongly with what Matt is saying. In terms of the analogy to or the differences from Europe: Europe has a great diversity in the electricity grid, and you have a huge nuclear component in France—something like 70 or 80 per cent of their electricity is nuclear. Pumped hydro is not an original idea; that was done in some of the early nuclear reactors, and it works that way in Europe. When French reactors are producing extra nuclear electricity, they pump hydro in Switzerland, which the Swiss then sell back at an increased premium price at times of high demand. So I think we can look at Europe, but I agree with the comments that my colleagues are making that we are different from Europe, but it's different on both sides of the argument. South Australia is doing great, but my main point is that they do need to be able to import power at times, and so, at the moment, that has been importing coal; in future, maybe it can be pumped hydro.

CHAIR: Thank you. Associate Professor Timmers?

Prof. Timmers : I think the suggestion to run Australian electricity generation on 100 per cent renewables hinges heavily on the capability of the country to install the required electricity storage capability, and we're looking at an order of magnitude 10 times changed from today, and I have some doubts that that might be achieved because you need to have community licences to build dams. You might have to consider environmental concerns. Water is an issue in Australia anyway, and pumped hydro is obviously driven by water.

The alternative, as suggested by that research paper I keep referring to, is to use batteries. We're leading the world there, with the largest battery, but, again, we need many more of those, and the issue with lithium ion batteries is that that is still very young technology, technologically and economically unexplored at this very high gigawatt scale. So I think that one has to be careful. I trust the modelling was done really carefully, and I trust the work of my colleagues there.

But the reliability of electricity is essential for a highly developed economy like Australia's, so one also has to give consideration at least to alternatives and the possibility that, in particular, achieving this last 20 per cent of penetration is much more difficult in the much more isolated, insular electricity sector of Australia compared to, for example, Europe or Asia, and also because the size of our electricity sector is so much smaller than Europe's. So it'll be a much harder challenge for us. I agree we have the advantage of more photovoltaic opportunities and we have a larger spread, because of the size of the country, to produce, to generate, renewable energy. But we also have to consider that we're more insular, that it's an isolated network and that it's much smaller than, as discussed, in Europe, for example, or in the United States.

CHAIR: Thank you very much.

Mr ZIMMERMAN: Can I just put a general question to the panel. The evidence you've given today is basically that the business case for nuclear doesn't stack up. Would any of you argue, if tomorrow someone put on the market nuclear power generation that was the cheapest form of power generation, that we shouldn't use nuclear in those circumstances?

Prof. Timmers : Should not or should?

Mr ZIMMERMAN: Should not—if the business case did stack up, in other words. If you were able to create a nuclear technology that was cheaper than for renewables, would any of you argue that we shouldn't use nuclear—that is, do have a broader concern about nuclear?

Prof. Stuchbery : I don't, but then again I'm a nuclear physicist! Nuclear is one of the areas where the difference between the community opinion and the expert opinion is quite diverse, and it's one of these social licence areas. But we have NIMBY-ism associated with wind farms as well as nuclear power. So I wouldn't see an issue. If nuclear was shown to be economically viable, I would not have an issue with that. But I think the issue would be social licence.

Mr ZIMMERMAN: Does anyone on the panel have a different view?

CHAIR: It looks like everyone wants to have a say.

Mr ZIMMERMAN: I think it's useful if it's a different view, Chair.

Prof. Timmers : I would support Andrew's view. And, as I said in my introductory statement, there is on the horizon the potential that generation IV technology might offer opportunities to an Australia affected by climate change extremes, and Australia is a member of the Generation IV International Forum. Some of the technologies, like the molten-salt reactor, the high-temperature reactor, offer opportunities that might be needed in 20 or 30 years to deal with issues like desalination, or possibly the production of hydrogen fuel to also decarbonise mobility in Australia. It's hard to predict the economics in 30 years time, but it is possible that nuclear power of this new type—it might also be small modular reactors, which are all still not technology ready, in my view—might be available then. So, if that is available in a cost-effective way, Australia should definitely consider it.

But, in order to do that, in order to be able as a nation to consider nuclear power, we have to work on nuclear engagement now, because the voter needs to familiarise themselves—

Mr ZIMMERMAN: I accept all of that. Where I am trying to get to—and sorry to interrupt, but we have more questions—

Prof. Timmers : I would definitely support it, if it's cost effective. At the moment, the three things hindering it are that in the short term it's not cost effective, and I think the evidence is overwhelming; there is no community licence for it; and we don't really have the technical industry. We have niches of technical expertise but we don't have the industry to support it.

Mr ZIMMERMAN: I understand.

Prof. Senden : My only comment is to build on the case that Australia is a unique environment. When we do the economic modelling, sometimes we borrow those models from the European or North American examples, and they do not factor in the costs, economic or ecological, of water consumption in all the different forms of energy production, whether they be steam turbines or storage, as in pumped hydro. So water consumption, and loss through dam evaporation, through licensed turbine driven systems, needs to be factored in, because that is a unique aspect of this environment. I would support that proposition if it were economically viable.

Prof. Blakers : I would have no particular objection, provided that safety was properly taken into account and, in particular, provided that nuclear weapon proliferation issues were properly dealt with.

Dr Stocks : The time frame would be the question I'd throw back, on that one. If it was available tomorrow and I could just drop it in the Latrobe Valley instead of the current brown generators? No problem whatsoever, from a carbon-emission reduction perspective. The two counterpoints I'd be putting to that: one is time, I don't think we can wait 10 or 15 years to work out whether it can make a major contribution. The other one—that I don't have a good understanding of and will just be throwing out as a question for consideration—is how much Australia's no-nuclear position carries political weight in a regional discussion sense, and whether that changes how we can have that conversation with the world.

Mr ZIMMERMAN: Professor Blakers, you referred in your opening remarks to the profile of nuclear generation basically being flat, globally. I stand be corrected, but I think that we've heard evidence that there are something like 50 reactors being constructed around the world at the moment. Is that right? Or have I misinterpreted that?

Prof. Blakers : The World Nuclear Association has on its website a nifty little table, table 2, I think, which just allows you to look at the number of reactors—and the power, and the energy—that are operating, that are under construction, and that are proposed. And there are 50 gigawatts of reactors supposedly under construction. Fifty gigawatts is a pretty small number—we are building 17 gigawatts of PV and wind in Australia in 2018 through 2020—and so it basically will continue to be flat.

Mr ZIMMERMAN: Did you have something to say on that, Professor Stuchbery?

Prof. Stuchbery : Andrew's right on the statistics. Reactors are being closed down that are reaching the end of their life, and they're generally not being replaced. In the United States at the moment, they're fracking and they've got a lot of cheap gas, so that's driving their energy market. It's in fact reducing their CO2 emissions in the US. China is turning on new reactors.

Mr ZIMMERMAN: So have they made the business case stack up? Or are they not interested in business cases!

Prof. Stuchbery : I don't know how you look at the business case for somewhere like China. They're concerned about air quality, and they're concerned about providing electricity. It's interesting to see how these technologies develop. I'm interested in what's happening in the United Arab Emirates. They've installed some big nuclear reactors. They obviously don't need it from the energy point of view. They've done everything by the book, in terms of the recommendations of the International Atomic Energy Agency. I think these are interesting cases for us to look at, but they're not particularly pertinent to the Australian situation, in that these are big reactors: these are gigawatt reactors. And, if we were considering nuclear energy, we would probably be smarter to start at the small modular reactor end.

Mr ZIMMERMAN: Back to you, Professor Blakers: in your modelling you talked about the 50 plus 25—renewables versus firm renewables. Obviously, that strategy relies on pumped hydro as the main storage element. Am I correct in saying that?

Prof. Blakers : We use pumped hydro because we can cost it. If batteries get cheap, then batteries would be fine too.

Mr ZIMMERMAN: But if you took out pumped hydro as an option, obviously the cost would be different because batteries wouldn't be that cheap at this point in time.

Prof. Blakers : Yes. You would invest much more heavily in transmission, because you can trade transmission for storage to a substantial degree, and demand management.

Mr ZIMMERMAN: Going to the pumped hydro narrative which someone else alluded to—and you say there are lots of sites, and I don't dispute that. I think Professor Timmers used the social licence argument, and I think with a lot of these things, if you drill down into individual sites, often you find communities of interest who are vehemently opposed to something happening in their patch. Have you been able to cast your eye, I suppose, over the pumped hydro sites and look at location and remoteness and things like that and determine whether, while on paper they may be suitable, they—maybe because of their proximity to population centres—face community resistance?

Prof. Blakers : We need to make the point that we found 3,000 sites in Australia. Nearly all of them are away from rivers. They look like the Genex Kidston proposal in Far North Queensland, which is using a disused pair of mineshafts. They look like the proposals in South Australia, which are absolutely not on rivers; they're in high, dry desert hills. There are 100 times as many sites as we'd actually need to develop. I really don't think we're going to have any significant trouble finding the 10 or 20 sites that we need.

Mr ZIMMERMAN: You talked about renewable zones to, effectively, help with transmission costs. Have you included in your estimates the costs of connecting diffuse pumped hydro sites?

Prof. Blakers : Yes, that's all taken into account. The transmission is not a major cost of a pumped hydro system.

Mr ZIMMERMAN: Dr Stocks, I'm not sure I understood your using Snowy Hydro as a reference point. Ten Snowy Hydros—I mean, the Snowy Hydro is pretty bloody big!

Ms STEGGALL: Can I clarify that: is it 10 for overall power and two for storage?

Dr Stocks : It's for power but not for energy. It's how fast you deliver the energy. There are the dams, which store the energy, and there are the pipes and the turbines, which deliver the power. So, from a Snowy perspective, we need 10 pipes and turbines; we probably only need another one dam, in terms of energy storage. That's the sort of scale of what we're talking about.

Prof. Blakers : And Snowy has a notion of going to 3.0, 4.0, which is four gigawatts, six gigawatts, even eight gigawatts off the same dams.

Dr Stocks : The schemes that have been announced in South Australia are more than enough to manage South Australia—Goat Hill, Cultana and Beetaloo and the whole collection. They won't all get built; that's absolutely guaranteed. Too many have been announced. The ability for us to distribute sites within the system is amazingly flexible, and I don't think we're going to have a shortage of sites.

Mr ZIMMERMAN: I have one quick last question. Professor Blakers, was it you that issued a report this year or last year saying that we'd meet our Paris Agreement targets through the electricity sector alone just because of the uptake of renewables—by 2025 or something?

Prof. Blakers : If we keep building exactly the same number—

Mr ZIMMERMAN: So it was your report?

Prof. Blakers : Yes—of PV and wind generators that we are doing today up to 2030 we'll meet the Paris targets.

Mr ZIMMERMAN: Through the electricity sector alone?

Prof. Blakers : Through the electricity system alone.

Ms STEGGALL: On that point, does that assume no new coal-fired, though?

Prof. Blakers : That just assumes that we reduce the amount of coal and gas being burnt as the amount of renewables continues to increase. We're installing 16 to 17 gigawatts of new renewables—PV and wind—in 2018, 2019 and 2020. This will cause emissions to reduce. If we continue post 2020 then emissions will reduce far enough to meet the Paris target in 2030, if we just keep the status quo for everything else.

Ms STEGGALL: So if we don't artificially bring in more coal, or extend it, but just let the transition happen then that would actually be effective?

Prof. Blakers : If we just stand back and let what's happening happen then we'll meet the Paris target.

Ms STEGGALL: That's good news. Just so I understand correctly, what you're saying, in terms of the storage capacity and the transmission, is that—it's like the plughole—in terms of the parts coming out of a dam like Snowy Hydro, you would need essentially 10 as opposed to two dams all up? So we're not talking about needing a huge number of dams, physically?

Prof. Blakers : No, we need about 500 gigawatt hours of storage. Snowy Hydro's got 350, so we need another 200—

Ms STEGGALL: So one more Snowy Hydro and you're there?

Prof. Blakers : Yes. But we need a lot more pipelines.

Ms STEGGALL: I accept the pipes. But in terms of the social licence and the community consensus around dams, that's in respect to the flooding aspect or the physicality of the term taking up a region—

Prof. Blakers : These are not on rivers. These are very small dams.

Ms STEGGALL: The community consensus or social licence aspect is certainly an element that comes up with nuclear—and I'll address that in a second—but that's not what you would see as an overwhelming issue when it comes to storage?

Prof. Blakers : I think the most difficult social licence is transmission and wind farms. Solar and pumped hydro will be quite straightforward.

Ms STEGGALL: In line with that, that's also assuming that hydro is the only other way for storage. We have hydrogen and batteries developing at a fast rate as well.

Prof. Blakers : And demand management.

Ms STEGGALL: Is that as in: our use of electricity is getting smarter, in that, from an industry point of view and from residential use, we're managing our needs in a much more efficient way?

Prof. Blakers : Yes. They're going to be big changes. Also, electric vehicle batteries, which are going to become very important over the 2020s, are also a very large store. We have a lot of options.

Ms STEGGALL: You touched on the difference between Europe and Australia, and that Australia is unique in being very vast—

Prof. Blakers : Totally different.

Ms STEGGALL: having a lot of sun compared to Europe.

Prof. Blakers : Our sun is twice as good. Our wind is much better. We have a very large grid that is interconnected from Townsville down to Hobart. Studies from northern Europe are basically studies about how hard this is because they're in Europe, because they are north of the sun belt. We are in the sun belt and it's much easier in Australia to do it than in Europe.

Prof. Timmers : If I can reply, I specifically referred to Italy as a comparison.

Prof. Blakers : Yes, but Italy is a very small country. It's about the size of South Australia.

CHAIR: It's a physically big country.

Prof. Timmers : Italy's electricity sector is twice the size of Australia's.

Prof. Blakers : It's the physical size that counts.

Prof. Timmers : The other comment I'd like to make is the demand side management was mentioned. The modelling I have been referring to is economic modelling and it expects that this will only be three per cent of the electricity storage. So this is not going to be a big factor. It really boils down to either batteries or pumped hydro, or a combination of the two.

Ms STEGGALL: In relation to nuclear, you accept that it is essentially renewables to a fairly high percentage. Then when we get to that last 20 per cent, there may be a question mark. You did say that it could be 15, 20 or 30 years times that they could really be looking at that question. When I look at the terms of reference of this inquiry, what are the circumstances and prerequisites for a future government to consider this? Essentially, we're talking about the possibility of requiring consideration of nuclear a fair way into the future, and we have a lot of unknowns and a fast developing situation on the renewables side. Do you agree with that?

Prof. Stuchbery : I think so, yes.

Prof. Timmers : Yes, but one has to consider that the lead time to establish nuclear power generation is much longer, for example, than building electricity storage or renewables. It takes 15 years to build a nuclear power station. As I said before, you need three things: community license, a business case and technical support in the country. Let's assume that in 30 years time, we have a business case. It's not a matter of just purchasing a nuclear power station off-the-shelf, although the small modular reactor people try to give that impression. It needs to be sustained by a nuclear fuel cycle. Australia is already part of the nuclear fuel cycle because we mine uranium and we export it. There is a business opportunity possibly to store spent fuel elements—at the beginning and at the end of the fuel cycle. In addition to that, it also needs a lot of materials expertise and engineering expertise, and that technological expertise, in my view, is not there now. There are pockets of expertise—and we've got some representatives on the panel today—but we don't have this sustained engineering expertise in that area. That needs time to build up. It requires university programs and it requires research programs.

As far as the community license is concerned, there is a real distrust in nuclear power. The only way, in my view, to change that is to demonstrate to the Australian public that nuclear technology—whether that is mining, storage or nuclear driven submarines—can be managed in Australia in a responsible and safe way. If that sort of evidence is there to the voter then there might be a community license in 20 years time.

Ms STEGGALL: We have nuclear medicine, but this inquiry is specifically looking at energy mix. We are assuming that in 30 years time, if the business case stacks up, we would need to either be ready to take it or consider it. The difficulty though is how one can plan for 30 years time, from a business case point of view. Without that, it would have to be government built and paid for. How can a private company look at a business case that might stack up when in 30 years time there might be a need for it? In situations like China, it's essentially state subsidised. That's the big difference, really, between China and Australia: we have an opportunity from a free-market point of view of private investment as opposed to countries where it's government owned.

Prof. Timmers : I'm not talking about planning 30 years ahead, I'm talking about engaging with nuclear technologies, in particular, those aspects of nuclear technologies and the nuclear fuel cycle that are of other benefits to Australia right now. For example, Australia has the largest uranium resources in the world but is only the third-highest exporter of uranium. It can be expected that the export of uranium or the use of uranium will stay stable for the next 30 years, and maybe it would be in our interest to increase the market share of the Australian exports.

As identified by the South Australian royal commission there is a real business opportunity to store geologically spent fuel elements from overseas in a profitable way. That could diversify, for example, the economy in South Australia but also in Western Australia. So there are business opportunities to engage with nuclear which could be taken up now. Doing that successfully might help inform the discussion in 30 years time. This engagement is important.

Ms STEGGALL: I appreciate that, but that's not really the scope of this inquiry. We're looking at consideration for nuclear energy generation—

Prof. Timmers : But you're asking about prerequisites: that's a prerequisite.

CHAIR: I think his comments are within the scope of the inquiry.

Prof. Timmers : I think it's a prerequisite to have the community licence, the business case, the technology and the expertise.

Ms STEGGALL: So for a future government to consider nuclear energy generation, you would have to have developed, as a prerequisite, a nuclear industry, if I could say, in terms of mining uranium and other things?

Prof. Timmers : I would call it engagement, and you can call it nuclear industry, nuclear research or nuclear engineering research. Or more participation in the generation forum or building more research reactors—

Ms STEGGALL: But do you accept that would be against nonproliferation and really the turn, from a world point of view, away from proliferation and all the risks associated with that?

Prof. Timmers : We can call it proliferation. This hasn't got anything to do with proliferation or nonproliferation. In fact, if it's important for Australia to make informed contributions to controlling nonproliferation it's important to have nuclear expertise in the country. So it's really important that university training and university research in the areas of nuclear physics and nuclear engineering continue so that we have experts in the country who can comment and participate in IAEA decisions on proliferation and nonproliferation.

Ms STEGGALL: That's occurring at the moment under the current status—

Prof. Timmers : Yes, but in my view it's not enough to be engaged. We're almost at the point where we're disengaging with nuclear. We need to sustain our engagement.

Prof. Stuchbery : I would qualify some of Heiko's comments. No nation, or very few, engage in the whole of the nuclear fuel cycle. Some nations produce uranium and some enrich, and this is a good thing because the proliferation risk is higher if the whole cycle is in the one place.

I've mentioned that a lot of my graduates are working in the area of nuclear nonproliferation. Australia has a very high standing in this space, and I think we want to maintain it. We do have a permanent seat on the International Atomic Energy Agency's board of governors. I think we would want to maintain a level of nuclear expertise in this country in order to maintain that seat. We don't necessarily want to lose that, because we'd be perceived to be a nuclear unsavvy nation in the region. That's not saying that we should pursue nuclear power, but we need to keep the expertise in the country. We need to be ready to train people in this specific area if the need arise.

I think the realistic thing is that if nuclear power ever comes then it would be with small modular reactors, but there is still a long way on those because no small modular reactor per se has been licensed, constructed or operated.

Ms STEGGALL: Following on from that comment: I don't disagree with you in terms of maintaining our position—

Prof. Stuchbery : I'm not sure I'm answering your question. I wanted to qualify some of Heiko's comments; he probably agrees with me.

Prof. Timmers : I'm not talking about its termination in the full nuclear fuel cycle in Australia. We certainly should not do enrichment in Australia. We should not do reprocessing. I am just talking about taking up opportunities that exist today in association with the nuclear fuel cycle, like storage and mining—the beginning and the end—and research.

CHAIR: We will move to Mr Burns.

Ms STEGGALL: Chair, I just want to finish with a comment. I don't understand. You're saying that with the loss of current expertise and highly regarded people, the position on the International Atomic Energy Agency board—they are not at risk? They can continue under our current status quo, can't they?

Prof. Stuchbery : I think they can. If we become surrounded by people who are perceived to be more nuclear savvy then we are, they might argue, 'Oh, we should have that permanent seat rather than a cycling seat on the International Atomic Energy Agency board of governors.'

Ms STEGGALL: But is that happening?

CHAIR: Thank you, Ms Steggall. We will go to Mr Burns.

Mr BURNS: I just want to go through a couple of things. First of all, it was noted that South Australia occasionally imports energy from Victoria. Victoria also imported energy from neighbouring states when three coalmines tripped over summer, in some of our most difficult heatwaves. I think that that is one of the fortunate things about having a national energy grid, as it were; we do this as a country and we support each other in a diverse, balanced energy market that is rapidly changing over time. That's why we are here today.

Professor Stuchbery, you mentioned at the end of your comments that nuclear energy could provide an economic option as well as reliable energy, et cetera. I am happy to open this up to all of you: is there any evidence that any of you can point to that would suggest that nuclear energy would provide cheaper energy right now in Australia, given where we are right now, than any other form of energy?

Prof. Stuchbery : I think you have to say no at this point; definitely no.

Prof. Timmers : The evidence is overwhelming that it's twice as expensive. Other people say it's even more expensive.

Prof. Blakers : Twice as expensive in sunny Britain, compared with solar.

Prof. Stuchbery : We'd need to ask Tony.

Mr BURNS: Do you have any other comments on Australia's energy prices compared to other parts of the world?

Prof. Blakers : It doesn't matter where you are. Renewables are winning. They are two-thirds of global net new generation capacity because they're cheaper than alternatives.

Prof. Timmers : The energy price in Australia has obviously gone up; at the moment, we are at European levels of electricity costs. In the modelling in this paper I've tabled, for the model for the transition to decarbonisation, electricity prices will go up another 20 per cent or 15 per cent over the next 15 years. But then the model suggests that they will dramatically go down, and are fully renewable.

Mr BURNS: So energy prices are higher, and there is no evidence that anyone can point to that nuclear would be the way to bring down prices? Thank you; I appreciate all of that. I have to say that it actually has been quite good to have different views at the table and a bit of tennis being played; it's been quite good to watch!

Professor Blakers, you mentioned renewable energy investment in Australia leading towards the Paris climate agreement, which is set at two degrees. While we're sailing towards much higher than that, it's not scientifically where we want to be; we want to try and keep it well towards a maximum of 1.5 degrees. On that renewable energy investment rate that you spoke about, I'd be interested in your comments. My impression of it—not to put words in anyone's mouth—is that we have a government that's doing nothing, that doesn't have an energy policy and, in fact, is not assisting renewable energy in this country.

CHAIR: You're certainly speaking on your own behalf!

Mr BURNS: Thank you, Chair; I appreciate it. That's why I qualified my remarks. If we did have a government that had a national energy policy, renewable energy targets to provide certainty to industry and maybe even things like support or commitments around assisting businesses with transmissions—we did take a policy along those lines to the last election—how do you think that would affect the renewable energy investment rate in this country and assist us in actually reducing our emissions not in a do-nothing approach but even further?

Prof. Blakers : Australia is installing wind and solar at a rate of 10 times the global average per capita, five times faster than the EU, the US, Japan and China, and nearly three times as fast as the No. 2 country, which is Germany. Australia is the global renewable energy superstar on a per capita basis—a runaway winner. As I mentioned, Australia, if it keeps doing what it's doing now, will reach its Paris target in 2030. Of course, with appropriate policies, we can go faster. There is nothing to stop us going faster.

Mr BURNS: Is that at risk if we do nothing? Does long-term investment in renewables potentially slow down if we do nothing?

Prof. Blakers : If we don't fix transmission, the renewable pipeline will stop, yes.

Mr JOSH WILSON: But the target finishing entity—there is no extension to—

Prof. Blakers : We have gone right past the target. We are far past the target. We have passed the old target.

Dr Stocks : People are investing despite the target being met. The major barrier at the moment is finding places where you can connect to the system in a timely fashion. That's the challenge that developers are experiencing at the moment; the transmission system is becoming a roadblock to continuing the investment we are seeing at the moment.

Prof. Blakers : Snowy 2.0 is great; there is a large amount of storage there. There is even a bit of transmission with it. It would be really good to put another cable across Bass Strait to pick up some of the Tasmanian hydro and wind. But transmission is the key. Get transmission right, and we will sail along and meet any target you like. Get it wrong, and we won't even meet the Paris target.

Mr BURNS: Potentially in 10 years time, if we have a conversation about what might be small modular reactors being rolled out, if we were to put in a big nuclear reactor how do you think that would affect investment in renewables?

Prof. Blakers : It's missed the boat. In 10 years time, provided we get the transmission right, we will be up around 90 or 100 per cent—so where is the space? Of course, we will also be increasing demand because we will have electric vehicles and we will be displacing coal in other sectors. It's just difficult to see where nuclear would slot in. It's an inflexible baseload, and it also needs balancing in terms of transmission and storage because it is inflexible.

Mr BURNS: Thank you.

CHAIR: Let me use up the remaining two minutes with a question. Some of you put the argument, based on your own modelling, that nuclear would not be economically feasible in Australia. My question is: if that were to be the case, do you believe that a technology that is not currently economically feasible should be prohibited, on that basis?

Dr Stocks : Not on the basis of economics. I don't believe it's illegal because of the economics.

Prof. Timmers : I don't think it's a good idea to make it illegal because that also prevents other activities associated with nuclear energy like mining and the storage facility, which might be a business case. So it is hampering other efforts.

Prof. Stuchbery : My closing comment in my opening statement was that we should leave opportunities open for the next generation of Australians, should they need it. Andrew speaks very strongly in favour of a 100 per cent penetration of renewables, but we haven't done it yet and I think we need to keep our options open.

Prof. Senden : And, finally, to make a technology illegal means that you make all the training, technical research and even fundamental research in the field difficult, so we would drop back.

CHAIR: Gentlemen, thank you very much for your attendance here today. If you have been asked to provide any additional information, could you please forward it to the secretariat. The committee may have additional questions for your response on notice, which will be sent to you from the secretariat. You will be sent a copy of the transcript of your evidence, and will have an opportunity to request corrections to transcription errors.