Dutton’s nuclear nirvana is ignoring lessons of Snowy 2.0

Leader of the Opposition Peter Dutton holds media interviews at Parliament House in Canberra. Picture: NCA NewsWire / Martin Ollman

“Nuclear energy for Australia is an idea whose time has come,” the Coalition proclaimed last month as it unveiled its nuclear proposal to the nation.

The announcement has since stoked an already heated and polarised debate on Australia’s energy policy. Much has been said on the pros and cons of the seven nuclear power stations. But the announcement, grandly titled “Australia’s Energy Future”, reminded me of another similarly titled announcement from 2017, “Securing Australia’s Energy Future”, which asserted “the Turnbull government will start work on an electricity game-changer: the plan for the Snowy Mountains Scheme 2.0”.

The parallels between the two nation-building announcements go well beyond their titles, and it’s instructive to look at the similarities between these “processes” leading up to the announcements and ask how two totally dissimilar solutions have been touted to secure “Australia’s energy future”.

In both cases, the announcements derived from a hastily cobbled together brainwave by the party leader of the time.

Snowy 2.0 was announced by Malcolm Turnbull within two weeks of being proposed by Snowy Hydro. No time was afforded to inform Snowy Hydro’s co-shareholders or the NSW and Victorian governments, who heard the news on the radio. A feasibility study was to follow, but the die was cast.

Likewise, there was no analysis before Peter Dutton’s nuclear announcement, with “detailed technical and economic assessments” to follow. Again there was no equivocation or caveats: the nuclear stations will be built by a Coalition government regardless of cost or anything else.

The universally applied process for developing infrastructure projects, especially massive ventures costing tens of billions of dollars, is to undertake comprehensive assessments before even contemplating such announcements. Paradoxically, Turnbull’s Snowy 2.0 announcement got it right when he pontificated that “for too long policymakers have put ideology and politics ahead of engineering and economics”. Yet this is exactly what both announcements did, broadcasting a hyped-up two-page media statement based on ideology and politics without bothering to address the engineering and economic fundamentals.

Unbelievably, the nuclear station announcement didn’t even provide a cost estimate; this is to be revealed after the Coalition wins the next election. Perhaps Dutton baulked because of the ongoing Snowy 2.0 guesstimates saga. As I have written before, the initial back-of-the-beer-coaster estimate of $2bn doubled to $3.8bn (max $4.5bn) in the feasibility study, was “reset” to $12bn last year and is now more like $25bn after associated costs, such as financing and transmission, are included.

But Dutton seems to have changed his mind and will now be revealing the cost “very soon”, adding last month, “I think people will be pleasantly surprised”. If there is no detailed analysis the cost estimate will be useless.

Prime Minister Malcolm Turnbull

Moreover, the fact that “the Australian government will own these (nuclear) assets” should send chills down the spines of all taxpayers.

Inevitably, construction of the nuclear stations will follow the same hapless path as Snowy 2.0, with the government refusing to pull the plug to avoid losing face and doggedly paying whatever it takes to complete them. The federal budget kicked in a further $7.1bn for Snowy 2.0, on top of $1.4bn provided in 2019 to supposedly complete construction.

Both announcements claimed lower electricity prices. “A zero-emissions nuclear power plant will be a national asset delivering cheaper, cleaner and consistent energy for 80 years.” But there is no evidence for this. Snowy 2.0’s feasibility study found that electricity prices will actually rise as a result of its construction. Both announcements set impossible timetables. In Snowy 2.0’s case it was four years (yes, 2021). The completion date has since been delayed six times to 2028, but this is still impossible.

We are told two nuclear stations are to be completed by 2035-37. Given the lack of a nuclear industry in Australia, this is also impossible. Consider also the opposition of state governments.

A further parallel is the neglect shown towards technical complexities and risk.

For Snowy 2.0, the 27km tunnel between the two reservoirs is unprecedented, adding tunnelling risks (viz the oft-paused tunnel (non) boring machine, Florence), excessive costs and water friction losses. Likewise, nuclear experts have highlighted the troubled history of recent builds and the fact small modular reactors have yet to be built.

Both announcements overstated the significance for the National Electricity Market. Snowy 2.0 will be simply a battery that can discharge for up to seven days at 2200MW. This is hardly “an electricity game-changer”.

If built by 2037, the first two nuclear stations would constitute about 1 per cent of the NEM’s projected generating capacity of 200,000MW. All seven stations, totalling about 8000MW, would account for just 3 per cent of the projected NEM capacity in 2050. This is hardly “setting our country up for decades to come”. Crucially, none of the nuclear stations will be completed before the retirement of the coal-fired stations they are supposedly replacing.

Not only did the Coalition fail to heed the lessons of Snowy 2.0, but also the lessons of Snowy’s gas power station at Kurri Kurri. This $600m project, announced by Scott Morrison in 2021, was to be completed before the closure of Liddell Power Station in 2023. It’s now a year overdue, has blown out to $1.5bn, and will only have 10 hours’ gas storage to generate at full capacity, before having to use diesel. The nuclear power announcement has all the hallmarks of the Snowy Hydro follies.

Why don’t our political leaders learn from past mistakes and undertake full due diligence with rigorous technical, economic and environmental assessments before announcing mega projects?

Maybe then they’d have a better chance of securing Australia’s energy future.

Ted Woodley is former managing director of PowerNet, GasNet, EnergyAustralia, China Light & Power Systems (Hong Kong).