As recently put by a well read commentator, we live in the Age of Mumpsimus, that is, an age characterised by clinging to traditional customs or notions although shown to be unreasonable. But the subject here is not dangerous nuclear power or dangerous climate change. It is dangerous economics.
On the 2nd of August 2019, Federal Energy Minister, Angus Taylor, asked the House of Representatives Standing Committee on the Environment and Energy to investigate the nuclear fuel cycle. As if we needed more proof that the loudest voices in this federal government are the least aware of the technology and economics of energy production and distribution in the 21st century, but more of that soon. First a quick recap on how we got to this point.
The economic arguments for transition to a carbon neutral economy have been made for over 10 years. The impetus was the threat of catastrophic climate change. The economists' mission was to avoid the dire economic consequences of climate change at least cost to the economy. They advised an early start to replacing fossil fuels with safe low-cost renewable energy sources to achieve this at least cost to the economy but not all governments listened.
The Australian experience is that, in spite of inconsistent and, at times destructive government policy and mistakes, the renewables market has developed to the degree that solar power combined with battery storage is cheaper than coal fired power, even at the level of the individual household. And nuclear power is vastly more expensive than coal fired power even without counting the cost of safe storage of nuclear waste for a thousand years.
The extreme right wing of the Federal Coalition Government just doesn't get the economic facts. But they are not alone. This denial of the bleeding obvious is symptomatic of a malaise that is far more widespread. Bodies such as the Minerals Council of Australia, the nuclear lobby, right wing think tanks and shock jocks, even the union funded peak body Industry Super Australia produce position papers, reports, commentary and ‘news' articles that deny the demonstrable economic facts.
On the other hand, informed economic bodies are producing reports that clearly show the economic advantages of renewables right now.
The Australian Energy Market Operator has produced a 20 year transition plan which could see 85% of electricity coming from renewable sources by 2040. This is a conservative plan designed to utilise current assets and guarantee energy security.
BNP Paribas (the world's 8th largest bank, operating in 77 countries) produced a report for professional investors in August 2019 stating that, over the next 25 years, it will cost five times as much to produce power for petrol vehicles compared to electric vehicles powered by renewable energy.
Research organisations such as BloombergNEF and others continue to present the facts clearly and big investors are taking note. Even the International Energy Agency, a proponent of nuclear power, admits that nuclear plants cost four times more to build now than 15 years ago. NewEconomy editor Giles Parkinson points out that “While the cost of solar has fallen 95 per cent over the past decade, and the cost of battery storage by some 70 per cent, the cost of nuclear has more than trebled upwards.”
The purely economic facts are self evident at a glance:
- nuclear power is extremely expensive now and in the future, it will take 20 years to build a plant if we start tomorrow and it's dangerous for 1,000 years;
- fossil fuel based power is expensive and it produces pollution that is dangerous to health as well as carbon dioxide which is dangerous to the entire planet;
- renewable energy is already the cheapest and getting cheaper, it is safe, non-polluting and it will not run out.
Unlike King Canute who tried to stop the incoming tide by decree, both large and small players in the market, can see the incoming tide of renewable energy clearly and are voting with their wallets. This is in spite of a federal policy vacuum, myriad uncoordinated state energy policies and well intentioned government subsidy schemes that distort the market, at times to crisis point (the current crisis in the Victorian solar installation market is a prime example). Investment in renewables is in the billions of dollars nationally on an annual basis and is growing rapidly. People are investing in renewables regardless of their position on man-made dangerous climate change because renewable energy is already cheaper and every rigorous analysis points to costs dropping even further.
So this begs the question: Why are so many, for whom economics is usually dear to the heart, denying the economic facts? This is likely for a variety of reasons: refusal to believe technological changes; vested interests of various kinds, blind ideology; perhaps simply mumpsimus of unknown origin.
Whatever the reason, it is one thing to deny the overwhelming body of peer reviewed scientific evidence of dangerous climate change but it is another, entirely, to expend hard to come by dollars and cents irrationally. That might have some rationality if the reason is vested interest but it is far from serving the public interest. It is dangerous for any government to leave a tossup between vested interest and mumpsimus on its part to the electorate, especially in this era when the fragile fabric of democracy is fraying before our very eyes.
The Australian people deserve a common sense energy policy and should demand one from the federal government: a policy based on sensible economics as well as a prudent approach to dangerous climate change. Only a policy based on rapidly transitioning to energy obtained from renewable sources can deliver Australia both.