23/05/2024
Topics: CSIRO GenCost report, zero-emissions nuclear technology.
Rafael Epstein
He is the Shadow Minister for Climate Change and Energy, he is an MP in Queensland with the LNP.
Ted O’Brien
Great to be here.
Rafael Epstein
Simple question Anglesea or Morwell?
Ted O’Brien
If you’re asking about locations of potential zero emissions power plants. Well, unfortunately Raf, I can’t be releasing coalition policy today. But we have been pretty clear on some of our principles. And one of those principles is that we have 90% of our baseload power stations, leaving the grid in 10 years, and that is creating an enormous gap in energy and so what are those stations? Well, they’re actually coal plants. And these communities have an enormous amount to offer. They’re heavily reliant on those coal plants. So we’ve taken advice internationally, and we believe there is a lot of merit in a strategy that says, as coal exits the system, we should be looking at zero emissions, nuclear energy to take its place.,
Rafael Epstein
And I’ll come back to the timeline and costs. You have had the conversation internally, otherwise, it wouldn’t have been flagged for so many months. So have you spoken about all other angles?
Ted O’Brien
Raf, we’ve had conversations internally, externally. And one of the things I have to say on Peter Dutton’s leadership we’ve been very transparent from the get go.
Rafael Epstein
So be transparent with everyone [inaudible].
Ted O’Brien
We will be, don’t worry, we will be absolutely transparent when it comes to releasing the policy and and we’ve made no secret of this, since we came to opposition, that we are looking at the possibility of having zero emissions nuclear energy…
Rafael Epstein
In old coal sites.
Ted O’Brien
…but not on its own. And this is a key point…
Rafael Epstein
Victoria is one of the biggest states – we’ve got to get one don’t we? If you go this way, Victoria is going to get one, right?
Ted O’Brien
Well if you wanna put your hand up for one, Raf, you know there will be a time. So there’ll be a time for us to have these sorts of conversations after we’ve released the policy. But the point I was going to make if, I can have a go now, is, you know, as we look at nuclear energy, I understand people get very excited on the topic. But as a coalition, we are looking at a balanced mix of technology. So we look at what Labor’s doing and we see the problem with Labor’s approach is it’s putting all-eggs-in-one-basket. It’s proving right now not to work. Australians are paying among the highest electricity prices in the world. The grid is wobbling, emissions are in fact going up. Our approach is different. We believe you need a balanced mix of technologies – renewables, gas, and as coal exits the system we should be introducing zero emissions nuclear energy.
Rafael Epstein
The CSIRO say you can’t do that, that it will take too long to build the big nuclear power plants. There’ll be a big gap. Coal will go and you can’t build nuclear that quickly. Why shouldn’t we all listen to the CSIRO?
Ted O’Brien
Well, a couple of things. I haven’t heard the CSIRO say that Raf. I think that’s a conclusion that…
Rafael Epstein
It says 15 plus years in their report.
Ted O’Brien
Yeah, but what you just said there was they said you can’t do that. The CSIRO never said that. The CSIRO put out a report yesterday called the GenCost report. And, as the CSIRO itself has said, the purpose of the GenCost Report is provide information to potential investors. So these are investors who rightly want to make a buck. Our approach as a coalition, is we want to focus on the Australian consumer who wants to save a buck. So it’s a different approach.
Rafael Epstein
The coal’s going in 10 years. The CSIRO says you can’t build one in 15. The coalition – sorry, the CSIRO is not like the coalition. They’re not a political party. They’re the preeminent scientific organization in the country. They’re saying, you can’t fix the problem with your solution. That’s what 15 years means.
Ted O’Brien
Well, again, they haven’t made that statement, Raf, you just did.
Rafael Epstein
I’ve got the slideshow from the CSIRO in my emails – its 15 plus years.
Ted O’Brien
In fairness to CSIRO they have not drawn that conclusion. But they did say on the stats, you’re right – they said that building a power plant could take 15 years. I’m happy to address that. But to answer your earlier question, we believe that one – you shouldn’t close our baseload power stations prematurely. But you are right that they are exiting the grid. So as coal exits and zero emissions nuclear energy comes in to play a very similar role [inaudible] you are going to have a period of time where you’re going to have to have something to fill the void, right? And that something is gas. And that is why we’ve been so critical of the Albanese government with how it has been mistreating the gas sector. Gas is now depleting and that’s our big problem.
Rafael Epstein
Let’s get, I guess, on to the other important element of the CSIRO report, which is cost. You’re listening to Ted O’Brien speaks for Peter Dutton in the shadow cabinet on these issues, he is the Shadow Minister for Climate Change, and we’ll get to calls after this. Tell me you think we should be talking about this 1300 222 774. The biggest thing out of that report, Ted O’Brien, is it costs more. Nuclear is double the cost of renewables, roughly, according to the CSIRO. Do you accept that nuclear is more expensive?
Ted O’Brien
Just to finish off on timing, and then I’ll promise I’ll get straight to cost, Raf. The advice we’ve received from around the world is that the earliest you could have electrons on the grid in Australia from a nuclear power plant would be in a 10 year period, you know, after coming to government making the decision and so forth. And that assumes small modular reactors of course, will take you know, two or three years longer probably for large reactor so that deals with the timing issue. And then talking with costs, so I want give the CSIRO credit for a few things. Firstly, its chief economist was on with I think Patricia Karvelas this morning.
Rafael Epstein
Amber Jacobs.
Ted O’Brien
Oh, is that right? Okay. And I think I was pleased to see when asked the question about, you know, the coalition critiquing their work. He basically said, well we welcome it, and that’s the whole point of this GenCost report. They don’t put it out saying, you know, this is locked down absolute truth – this is the Bible. In fact, they call for people to call out where there are flaws. In the last few months, you’ll see they’ve changed a lot of things and that’s a good thing.
Rafael Epstein
Can I go back to a central point?
Ted O’Brien
Yes.
Rafael Epstein
Nuclear is much more expensive than renewables. That doesn’t change every time they do this report. Do you accept that version from the CSIRO?
Ted O’Brien
I do not accept the assumptions that they have made on the electricity prices that come from nuclear power plants. However, for the first time, to their credit, the CSIRO has included large reactors in their report and the capital cost on a kilowatt basis. I think, reasonably, I looked at that yesterday and said, again, we haven’t got to the bottom of all the assumptions.
Rafael Epstein
Building as a cost as opposed to the cost of production of a nuclear power plant.
Ted O’Brien
So for anyone else who’s listening, they call it overnight costs, its capital costs. It’s basically, to get one of these plants up and ready to run.
Rafael Epstein
So why do you think they cost the build but not the cost of the actual energy pumping out of it?
Ted O’Brien
Perfect, perfect question. It’s something that I’ve at least read – yet to get to the bottom of other assumptions and I’ll be getting a briefing from CSIRO on this, around financing costs and so forth. But the assumptions read to date. They don’t stack up compared to international best practice, or even international standard practice. I’ll give you an example.
Rafael Epstein
They say the opposite actually, I don’ know if you’ve read that [inaudible] they say general standard way of doing this.
Ted O’Brien
Well, it’s not in a few regards, again, capital costs on a kilowatt basis. I’m okay with that. Looks pretty reasonable to me. But when you say, okay, so how much will electricity be priced as it comes out of these plants? Here’s what doesn’t make sense. They’ve done that calculation, assuming these plants might work, operate, as little as 53% of the time. So just over half the time.
Rafael Epstein
They say that’s standard. They’re taking their own example.
Ted O’Brien
Well, it’s not well, that is not. I don’t know any plant in the world, nuclear plant, that runs at that low level. I mean, this is why people talk about coal to nuclear. Could you just hear me out…
Rafael Epstein
I just want to wind out of the detail if I can… [inaudible] follow the detail.
Ted O’Brien
Okay.
Rafael Epstein
So I want to wind back if I can, Ted O’Brien. Because you and I can sort of – I’ve got the page numbers in the report. Do you consider the CSIRO report to be credible and trustworthy? Because the head of the CSIRO, I mean, he put out a letter saying the report can be trusted, and that they are the very best estimates. So, do you agree that the report can be trusted, and they’re the very best estimates?
Ted O’Brien
I would agree that the report plays a very important role if you are an investor in some of these generating assets. But I do not believe that you should be reading that report, looking at how to get prices down for consumers. They’re very different things Raf. Now, can I make this this point that I was saying before? That report assumes that a nuclear power plant can operate as little as 53% of the time. Nuclear power plants can operate as much as 95%. So that’s why they always on 24/7.
Rafael Epstein
The report does address that.
Ted O’Brien
No, no, it doesn’t. It doesn’t talk about 95%. In fact, they say that the low end of the assumption’s 53%. And then, Raf, they also talk about the asset life being around about 30 years. That doesn’t stack up. I mean a nuclear plant today, they’re being licensed up to 80 years, and most of them are assuming they’ll have an extension to 100 years. So this is where, and you’re right to make the point – you got to get into the detail.
Rafael Epstein
And they address all of detail.
Ted O’Brien
Once you get into it – they don’t justify any other detail.
Rafael Epstein
I can give you the page numbers – 104 108 and 107. But can I…
Ted O’Brien
They don’t justify the detail, and this is me being candid with you, right, so I’m looking at you saying one – good on you CSIRO, for the first time you’ve added large reactors – over 400 of them in the world. Good. Look at the capital costs, okay, on a kilowatt basis, yeah, that seems reasonable enough. And then you look at the electricity price. I’m going whoa, that’s way, way off base. So
Rafael Epstein
It sounds like you’re looking for the experts who agree with you.
Ted O’Brien
No, I’m looking for experts that go on what is happening in the world today. So for example, when I was in Japan, I looked at the departmental figures and I’ve got these figures, I’m happy to share them, Raf. Basically, nuclear plays a role in the Japanese mix of getting prices down. Same in Ontario in Canada. The Minister himself showed me the departmental figures, nuclear energy brings prices down so those countries that have hands on practical experience with renewables, gas, coal, nuclear, their grids say not only does nuclear make the grid cleaner, but it makes it cheaper and more reliable. I believe more countries that have hands on experience. And that’s the thing that you look at the CSIRO report, you say hang on, the electricity price – that’s inconsistent.
Rafael Epstein
That’s – I guess that’s the question for everyone listening –
Ted O’Brien
It is a detailed thing, I get that Raf.
Rafael Epstein
And we can either trust the CSIRO or we can have a listen to your critique. And I’ll leave that there for people on 1300 222 774. There is news today, the default offer, in Victoria that is sent by our Central Services Commission – that is like a price guide if I can call the default offer for a lot of people, it’s coming down. Electricity prices coming down – went up a lot last year. It is coming down. You agree that’s good?
Ted O’Brien
Oh, look, there is no doubt any time that consumers in the midst of a homegrown cost of living crisis see prices of anything come down – I think we should all be celebrating. However, keep in mind, you said it yourself, Raf, the prices might be coming down compared to last year. But at the last federal election, the Albanese government promised the Australian people that they would reduce household power bills by $275. That wasn’t a one off, that was going to be every year thereafter. $275. So as the new figures for next year’s electricity price get released today, we’re in Victoria. So Victoria would have to have prices reduced by about $500 if Albanese is to deliver on his promise, anything less than that…
Rafael Epstein
We’ve got the lowest prices in the country, don’t we? With the essential services we’ve got some of the lowest prices in the country.
Ted O’Brien
Anything less than around about $500 decrease means that Anthony Albanese has broken his promise. As for who’s got the best in the in the country, Raf, I’m conscious I’m in Victoria and I’m a Queenslander. I’ll let sort of, different people, sort of play states off.
Rafael Epstein
Final question. Why, if nuclear was such a good idea, why didn’t you do it? You were there for nine years – you never did it. If it was such a good idea, why didn’t you do it?
Ted O’Brien
Well actually two terms ago which was my first term, I entered parliament in 2016, the Queensland convention carried a motion that came from my branch actually – hear me out – for looking at zero emissions, nuclear energy. That was great. And then that took us to the next term of government. And I chaired a parliamentary inquiry looking at zero emissions nuclear energy. As a result of that, we put nuclear technology into our technology investment roadmap, last term of government. And now this term of government, we have been exploring it further saying should it play a role as part of a balanced mix with renewables and gas for our energy future? So, Raf, we have been evolving this over time, this is probably the biggest change to our energy market in our history. We’ve got to get it right. You can’t do this quickly. You got to do your research, learn from the rest of the world. That’s what we’ve been doing. And that’s why we’ve been open trying to carry the Australian people on the journey with us.
Rafael Epstein
Ted O’Brien is an LNP MP from Queensland. He is also the Shadow Minister for Climate Change and Energy. That means he is part of Peter Dutton’s team. Ted O’Brien, thanks for coming.
Ted O’Brien
Thank you very much Raf.