Nuclear a common factor in European countries with cheaper electricity prices
Nick Cater outside the Olkilouto 3 nuclear reactor on Finland’s west coast.
Following our recent MRC report into electricity prices, MRC Senior Fellow Nick Cater has been actively exploring new arguments in support of nuclear power. As Nick’s recent work has found, the claim that renewable energy is cheapest is easily refuted by examining comparative electricity costs across Europe. Countries that invest in nuclear have consistently cheaper prices than those that do not.
The Øresund Sound between Sweden and Denmark lies on the fault-line between two Europes. On the one side is Scandinavia which, thanks to an abundance of hydroelectricity supplemented by nuclear, enjoys cheap, low-carbon energy.
On the other side are Denmark and Germany, two pioneers of wind and solar energy, that have ruled nuclear off the table.
When I crossed the 16-km Øresund Bridge from Malmo to Copenhagen this week it felt as if I’d arrived in a parallel universe. The Danish newspaper Jyllands Posten carried a long feature article about consumers suffering from the high cost of electricity.
Across the German border on a train ride to Hamburg we passed fields of solar panels and wind turbines which, on an overcast, calm Spring day were contributing very little. The app Electricity Maps showed that 26 per cent of Germany’s electricity was being generated from coal and a substantial proportion was being imported from Sweden.
Source: Encyclopaedia Britannica
The bad news for Australia is that Europe offered no light at the of the tunnel if we continue to restrict our clean-energy choices to renewable energy.
Australia’s transition problems are not unique. Ireland, like Australia, is on track to fall a long way short of its 2030 carbon-free electricity target of 80 per cent. Irish consumers have been paying some of the highest prices in Europe since Russia invaded Ukraine, largely because of the country’s heavy reliance on gas and the volatility of the international market.
The Irish Government has felt obliged to introduce the heaviest electricity subsidies in Europe, €150 euros ($245) for every customer. Nevertheless, the latest data from the European Union shows that even with the subsidy, Irish consumers are paying the highest prices in Europe.
The price of energy is stifling Ireland’s ambition to become a hub for the tech industry which puts a heavy demand on electricity in manufacturing and for storage. The Irish Government has set aside €1.22 billion ($2 billion) in corporate welfare including a €30 million ($47 million) sweetener to Intel in the hope of retaining their chip manufacturing plan.
Finland with a similar population to Ireland is sitting pretty. One of my first stops in Europe was the Olkilouto 3 nuclear reactor on Finland’s west coast, the most recent and most efficient third generation pressurised water reactor in Europe.
In Finland, every mainstream political party, including the Greens, are in favour of nuclear power. In recent polling conducted by Varian, 61 per cent of Finns support nuclear and just 9 per cent are opposed.
Support became firmer when Russia invaded Ukraine. The Finns realised they could no longer rely on Russia for energy, including coal. Finland imports uranium including from Australia but since nuclear fuel rods last five years and are easily stored, Finland is largely isolated from international price volatility.
The bottom line is that Finnish electricity bills are two and a half times cheaper than Ireland and emits roughly a tenth as much carbon dioxide per kWh.
Source: European Union
The claim that renewable energy is cheap is easily refuted by examining comparative electricity costs across Europe. Countries that invest in nuclear have consistently cheaper prices than those that do not.
The exceptions to this rule are countries with abundant hydro-electricity where sunk capital costs have been absorbed. Norway, Switzerland and Iceland sit in this category, with Iceland having the added benefit of geothermal power.
No country has successfully substituted intermittent renewable energy for base-load power.
Nuclear and renewables can co-exist in the market, Finland being a prime example. However, for the system to work efficiently a third energy source is required, one that is more agile than nuclear in following load. In Finland it is hydroelectricity, but Australia’s best option is gas.
The technology for the safe storage of nuclear waste is well developed. Finland’s state of the art waste disposal facility goes live later this year burying waste in sealed copper canisters 430 metres below ground in rock formation 1.9 billion years old. The tunnels are sealed with bentonite, the main ingredient of cat litter. It is typical of the pragmatism and ingenuity that characterises Finland’s response to the energy challenge. It is in sharp contrast to the dogmatism and political opportunism of Anthony Albanese’s government.
Watch Nick Cater’s interview with leading Finnish Green Tea Törmänen
Labor’s Future Made in Australia plan is impossible to achieve without abundant, cheap electricity. Quantum computing is energy intensive, and green hydrogen even more so. Subsidising energy prices, as Ireland is doing, is short-term madness. Protectionism and government intervention of this type never works.
We must acknowledge that nuclear reactors take time to build and are not cheap. The bill for Olkilouto 3 was €5.6 billion ($9.7 billion). The construction times aren’t short. Much of the blame for that belongs to governments which have imposed unnecessarily onerous compliance measures.
Despite these hurdles, however, the cost-benefit equation favours nuclear in the medium to long term. Olkilouto 3 is expected to have an operating life of 60 - 80 years, meaning there’s a high possibility it could be operating at the start of the next century.
This is at odds with the conventional wisdom of the left which forms the official doctrine of the ABC. Last week I received an inquiry from Media Watch in response to my commentary from Finland.
“You don’t reveal who paid for your trip to Finland and Sweden,” wrote executive producer Tim Latham. “Was it funded directly or indirectly by the nuclear or fossil fuel industry?”
I was able to reassure Media Watch that my visit was entirely self-funded, and that my conclusions were arrived at independently. That is one of the great benefits of being attached to a think-tank like the Menzies Research Centre.
Energy policy in Australia continues to suffer from short-term thinking and political quick fixes. Until that cycle is broken, our energy system will continue to deteriorate, dragging down the economy and stifling future prosperity.
The art of politics, Robert Menzies observed, is “to accustom people to thinking, not only of the immediate present or of the next election, but of the future in a long-range and comprehensive way”.
Peter Dutton has taken up that challenge by breaking the taboo on nuclear power. The experience of countries like Finland serves to reassure us that he is on the right track.
Nick Cater is a Senior Fellow at the Menzies Research Centre. His visit is self-funded.
