Ross Greenwood speaks to ISA Chief Economist Stephen Anthony who says nuclear power should considered as a solution to Australia’s energy crisis.
Ross Greenwood: The second thing that is beyond doubt is that many Australian families and industries are being adversely affected, and with industry leaving this country, it is not good for superannuation funds. It is not good for workers. It is not certainly good for the national economy as a whole. As a result, what is quite clear as Parliament reconvenes next week, is that government has got to fix our electricity system.
It’s going to fix the supply. It’s going to fix the way which it wholesales and indeed the way in which we are build. Some of that is already in place. The most important thing is more electricity has got to be generated to take pressure off the price and to make certain that industry, in particular, has plentiful supplies of baseload power. That means the aluminum industry, it means the paper manufacturing industry, the brick-making industry, the fertilizer industry and so many more.
Now, the answer partly is in your superannuation, because if you consider that there is some $2.7 trillion in our superannuation funds, and already industry superannuation funds, for example, have $678 billion in funds under management, it’s quite clear if you’re going to build infrastructure, you’ve got to look back not just at the government, but also at our super funds. That’s been the subject of a major paper from Industry Super Australia. Its chief economist is Stephen Anthony of Industry Super Australia.
He joins us on the line right now. Stephen, as always, we appreciate your time.
Interview with: Stephen Anthony, Chief Economist, Industry Super Australia
Stephen Anthony: Hey. How are doing Ross?
Ross Greenwood: Good. Thank you. This paper you’ve bought out, and I noticed that Greg Combet has basically come out and said that industry super funds have the ability to partner with government to drive productivity. This is true because say, for example, when electricity networks have been sold, it’s been Australia’s super funds and industry super funds that have stepped up and bought some of those assets. It’s not as though this is foreign territory for our super funds.
Stephen Anthony: That looked absolutely directly, we have lots of energy asset holdings, but also indirectly, because now we own so much of the Australian economy for our members, that we have a direct interest in making sure that the energy systems work efficiently so that we can derive value for the people, for our members.
Ross Greenwood: The radical thing in this proposal here, and a lot of people are going to blow up and I might even blow up a bit about these issues. Really, we’re going to get to the end of coal-fired power stations, but the thing that you do point out is that nuclear power generation in this country has got to be actively considered by government, and as a result also is going to be actively considered by superannuation funds. Is that a fair summation of what you said?
Stephen Anthony: Yes. Ross, what we’re saying is that we’ve done the calculations for all the major alternatives to coal generation because we’ve got to replace a lot of firm capacity in the next 20 years. Based on our numbers, you would not exclude nuclear from the mix of energy going forward.
Ross Greenwood: Why would you not exclude it? Is that because, given the fact that they would be, I guess, is not plentiful enough to provide enough electricity, solar and wind I should point out, do not provide baseload power, it’s intermittent power, and that’s a fundamental problem? Hydro, there’s not enough of it as well. You still need some significant amount of baseload power if, over the next four decades in this country, you are going to replace the coal-fired power stations.
Stephen Anthony: Yes, see, you have to compare apples and apples and that means comparing not only the direct costs to generation but the network costs and externalities associated with generation. If you want to achieve reliable power, shared power and also reduce carbon emissions, within the margin of error, say 20% or 30%, you would not say that nuclear is more expensive or less expensive than all the major competitors to nuclear. Therefore, should be in the conversation.
Ross Greenwood: Then, you come back to coal-fired power stations because what is quite clear, is for at least three or four decades, a significant amount of the baseload power in Australia is still going to be generated by coal-fired power stations. Now, the fact of the matter is if you could somehow capture the carbon emissions, or indeed that you could find yourself in a position where you’re able to create low emission, coal-fired power stations, that surely also would be one other way you use our natural resources and overcome some of the concerns that people have about the building of new coal-fired power stations.
Stephen Anthony: Yes, absolutely, Ross, I completely agree. We’ve looked at it. Right now that technology isn’t available, but if it becomes available sometime in the future, that would be great. Right now it isn’t. Similarly, people attach batteries to solar and wind, and that technology isn’t available either. The only one that really is really available right now to provide cheap and clean firm capacity, is that nuclear side. That’s what should still be in the mix.
Ross Greenwood: Okay, but you would understand that industry super funds which come from the background of being, the boards often comprised of union members, and also on the other side, of course, employer members, and so the two come together. Now, you might get some around the table that might say, “Yes, Stephen, you’re right. Nuclear, let’s go that way”. You know that others might come from a different background, different perspective will say, “Not on your nearly. We are not going to have nuclear here. We fought vigorously through the Friends of The Earth or other organizations in the past to try and make certain that we did not have nuclear in Australia”.
Notwithstanding the fact that of course, Australia is the largest producer of uranium oxide, that ‘yellow cake’ is a word that we mind. Leaving other aside, you know that that would be a political fight of the highest order.
Stephen Anthony: Yes. Ross, it’s not either-or, you don’t have to do all of one and all of the other. Nuclear might only ever apply in one region, say, South Australia. It might only ever be 2% of the mix, but the question is, would you exclude it entirely? I’d say no, you wouldn’t.
Ross Greenwood: As I keep on pointing out to people given the fact that at Lucas Heights, at the Australia Nuclear Scientific and Technology Organization, ANSTO, we are one of the largest producers of nuclear medicine from our own nuclear reactor right now. That I would sit there and say, “Well, does anybody actually sit there?” Yes, there are always going to be concerns if there are safety issues. There’s no doubt about that, and there’s been one small incident recently.
The whole point about this is that things been going for some 30 years have had more than one generation of reactor out there. It’s not as though people are arguing that we should be actually closing it down. The argument should be if that is going okay, and we’re happy about that, why wouldn’t you actually start to generate some electricity from something bigger, but similar?
Stephen Anthony: Yes, then we’ve got Bill Gates, of all people investing significant money into fourth generation nuclear generators that essentially have fail-safe elements to them. Apparently, the technologies are amazing. The point being that perhaps it’s time to get Ziggy Switkowski, AO again to review the technological side of this for the people. There was a Royal Commission in South Australia not too, yes.
Ross Greenwood: Do you believe if that all took place, Ziggy Switkowski came in, did all that type of stuff, do you actually believe that industry super funds, because they already hold around $40 billion worth of energy sector commitments here in Australia and around the world, they’ve got the billions of dollars to be able to put into the future of Australia’s electricity generation?
Stephen Anthony: Absolutely, Ross. It’s something that our boards would consider very seriously, but it has to be part of a comprehensive energy policy that essentially deals with the overall happening issues.
Ross Greenwood: I have a suggestion that maybe that is all going to be addressed in our coming weeks as the Federal Parliament reconvenes. It will be of the highest priority to these new government. I would imagine the Chief Economist of Industry Super Australia is Stephen Anthony. Stephen, I appreciate your time in the program this evening.
Stephen Anthony: Thanks for the opportunity, Ross.
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