Nuclear was a better prospect 50 years ago – Nanuk

In hindsight there was a strong case for Australia to invest in nuclear generation at large scale 50 years ago, according to the chief investment officer of ESG-focused fund manager, Nanuk Asset Management, Tom King.

In an assessment of the investment prospects which might emanate from the Federal Opposition’s nuclear approach, King said that 50 years ago costs were significantly lower and, as a country, Australia was better positioned to deliver such projects.

“However, economic considerations have changed. Cheaper sources of generation have emerged and will continue to get cheaper over the next two decades. Additionally, the costs and regulatory hurdles for nuclear have risen substantially and the financial viability of nuclear energy is not as compelling in the current context,” he said.

King said that nuclear technology, while highly efficient and capable of providing a stable energy supply, faced significant economic and logistical challenges – the costs associated with nuclear power are substantial, and the timeframes for implementation are lengthy, potentially decades.

He said that small modular reactors (SMRs) will not solve the problems any time soon.

“The technologies proposed will no doubt work and some of them may be better suited to providing dispatchable power. However, there are none in existence in developed countries and until mass production of SMRs is achieved, they will be very expensive.”

“Until the regulatory environment adapts to this new technology, the regulatory hurdles will be the same as for conventional large scale nuclear and be prohibitive. Further investment in developing this technology is highly desirable, but it should not be at the expense of Australian electricity consumers.”

King said that, overall, governments have a significant challenge to facilitate investments that will form part of the more sophisticated, dynamic electric systems that are desirable in the future, whilst maintaining reliability in the short term with a minimal amount of investment in transitional technologies that don’t have a longer-term place in our systems.

“As it stands, nuclear doesn’t fit well into either of these categories in Australia,” he said.