1
00:00:00,160 --> 00:00:04,360
Speaker 1: Let's look at nuclear energy. And I've mentioned this before

2
00:00:04,400 --> 00:00:07,520
Speaker 1: whenever this comes up. In Finland, they've recently, in the

3
00:00:07,600 --> 00:00:10,080
Speaker 1: last year or so bit over that I think now

4
00:00:10,200 --> 00:00:14,720
Speaker 1: opened a nuclear power plant. It came in late and

5
00:00:15,640 --> 00:00:19,160
Speaker 1: over budget. But what it has done because it has

6
00:00:19,280 --> 00:00:22,360
Speaker 1: taken the fluctuations out of renewables, their prices have come

7
00:00:22,400 --> 00:00:26,520
Speaker 1: down by two thirds for electricity, so it has stabilized

8
00:00:26,560 --> 00:00:29,960
Speaker 1: their power grid. So hip hop array for that. I'm

9
00:00:30,000 --> 00:00:33,920
Speaker 1: sure they're saying. However, just because their power prices haven't

10
00:00:34,240 --> 00:00:37,960
Speaker 1: gone up because of this new plant, they're still paying

11
00:00:38,000 --> 00:00:40,239
Speaker 1: for it in some other way. And I've put that

12
00:00:40,440 --> 00:00:46,760
Speaker 1: to shadow ministers in the coalition regarding how will we

13
00:00:46,800 --> 00:00:48,920
Speaker 1: pay for it. They haven't released costings yet for the

14
00:00:49,000 --> 00:00:52,839
Speaker 1: nuclear power plan that they've put up, but if it's

15
00:00:52,880 --> 00:00:55,480
Speaker 1: not in power prices, it'll be in something else. Well.

16
00:00:55,480 --> 00:01:00,480
Speaker 1: A report has been done by the direct of Green

17
00:01:00,560 --> 00:01:04,040
Speaker 1: Energy Markets in fact as a co author a report

18
00:01:04,200 --> 00:01:07,480
Speaker 1: into the cost of nuclear in Australia. Tristan eat Us

19
00:01:08,000 --> 00:01:09,440
Speaker 1: and Tristan is on the line.

20
00:01:09,440 --> 00:01:11,279
Speaker 2: Good morning, good morning.

21
00:01:11,440 --> 00:01:12,399
Speaker 1: What did your report show?

22
00:01:13,959 --> 00:01:17,600
Speaker 2: It showed that we would expect a bill increase the

23
00:01:17,640 --> 00:01:22,000
Speaker 2: average household in Australia would say bill increases about six

24
00:01:22,120 --> 00:01:24,199
Speaker 2: hundred and sixty five dollars on their bill per annum

25
00:01:25,440 --> 00:01:28,520
Speaker 2: if the Coalition was to try and recover the full

26
00:01:28,560 --> 00:01:33,440
Speaker 2: cost of building a nuclear react to program in this country.

27
00:01:33,280 --> 00:01:35,839
Speaker 1: Isn't the problem. We don't know yet what they planned

28
00:01:35,880 --> 00:01:38,480
Speaker 1: to do fully apart from the site say've unveiled, that's

29
00:01:38,640 --> 00:01:39,880
Speaker 1: essentially been about it.

30
00:01:41,600 --> 00:01:45,360
Speaker 2: So what we did was we looked at construction cost

31
00:01:45,480 --> 00:01:48,960
Speaker 2: experience over the past twenty years across Europe and North

32
00:01:48,960 --> 00:01:53,280
Speaker 2: America to see what those countries had experienced, including Finland,

33
00:01:53,280 --> 00:01:56,639
Speaker 2: by the way, and we took those construction costs and said, okay,

34
00:01:56,800 --> 00:02:00,640
Speaker 2: given the construction cost of those real world projects, if

35
00:02:00,920 --> 00:02:04,960
Speaker 2: they were to recover their costs, what would they need

36
00:02:04,960 --> 00:02:07,520
Speaker 2: in terms of the price of electricity, then put that

37
00:02:07,560 --> 00:02:11,079
Speaker 2: into the Australian bill context and said right, okay, well

38
00:02:11,080 --> 00:02:15,320
Speaker 2: that would see a very large increase in wholesale prices

39
00:02:15,320 --> 00:02:17,359
Speaker 2: would then get passed through to customers. So that's where

40
00:02:17,400 --> 00:02:19,880
Speaker 2: that six hundred and sixty five dollars comes from, by

41
00:02:19,919 --> 00:02:22,760
Speaker 2: the way, on the fin Land and it's very interesting

42
00:02:22,840 --> 00:02:24,680
Speaker 2: what ended up happening is the people who paid for

43
00:02:24,720 --> 00:02:29,240
Speaker 2: that were French taxpayers. How was that was because so

44
00:02:29,400 --> 00:02:33,480
Speaker 2: what happened was Arriva was the company responsible for building

45
00:02:33,520 --> 00:02:37,440
Speaker 2: that project. They did it under a fixed price contract

46
00:02:38,240 --> 00:02:43,960
Speaker 2: with the Finish utility, and in the end they had

47
00:02:44,520 --> 00:02:49,360
Speaker 2: huge problems. It was more than I think seven years

48
00:02:49,440 --> 00:02:54,519
Speaker 2: past the original time, over three times over budget. And

49
00:02:54,680 --> 00:02:58,760
Speaker 2: what happened was the Finish utility said sorry, I'm not

50
00:02:58,800 --> 00:03:02,840
Speaker 2: paying any extra because this is a fixed price contract.

51
00:03:02,880 --> 00:03:06,200
Speaker 2: And then Areva ultimately ended up going pretty much bankrupt

52
00:03:06,200 --> 00:03:09,160
Speaker 2: and was bailed out by the French government. They forced

53
00:03:09,160 --> 00:03:11,800
Speaker 2: them into a merger with electricity to France.

54
00:03:12,440 --> 00:03:15,480
Speaker 1: Okay, so the French people have paid for Finland's power plants,

55
00:03:15,520 --> 00:03:17,840
Speaker 1: so they're not paying for it. Well, somebody has to

56
00:03:17,880 --> 00:03:20,400
Speaker 1: pay somewhere. So if it's not passed on an electricity cost,

57
00:03:20,639 --> 00:03:22,520
Speaker 1: somebody is paid. I would have assumed it would have

58
00:03:22,520 --> 00:03:25,080
Speaker 1: been a different tax or you know, taxes have risen

59
00:03:25,120 --> 00:03:25,679
Speaker 1: in Finland.

60
00:03:26,120 --> 00:03:28,600
Speaker 2: That's what happened in That's what happened in Ontario. So

61
00:03:28,760 --> 00:03:34,720
Speaker 2: in Ontario, the public utility there, Ontario Hydro. What they

62
00:03:34,800 --> 00:03:36,960
Speaker 2: ended up was they ended up clocking up a thirty

63
00:03:37,000 --> 00:03:41,440
Speaker 2: eight billion Canadian in debt in the nineties through their

64
00:03:41,800 --> 00:03:45,560
Speaker 2: problems with their nuclear construction program. Now in today's dollars terms,

65
00:03:46,520 --> 00:03:49,600
Speaker 2: at equates to about seventy billion dollars with debt, and

66
00:03:49,640 --> 00:03:53,680
Speaker 2: they ended up having to basically restructure that entity, take

67
00:03:53,760 --> 00:03:58,160
Speaker 2: that debt and put it in essentially a purpose built

68
00:03:58,280 --> 00:04:03,120
Speaker 2: government agency. And then Ontario people have been we're paying

69
00:04:03,160 --> 00:04:06,000
Speaker 2: for that over it. It took them about sixteen years of

70
00:04:06,240 --> 00:04:09,280
Speaker 2: extra payments on their bills. They're not on their bills anymore.

71
00:04:09,320 --> 00:04:13,120
Speaker 2: So when Ted O'Brien often likes to reference Ontario prices,

72
00:04:13,440 --> 00:04:17,120
Speaker 2: what he's missing is that huge debt that was accumulated

73
00:04:18,120 --> 00:04:20,960
Speaker 2: that the Ontario consumers had to pay. They've now paid

74
00:04:20,960 --> 00:04:22,760
Speaker 2: that off, so it's not on their bills anymore. But

75
00:04:22,839 --> 00:04:24,680
Speaker 2: I'll tell you what it was for sixteen years.

76
00:04:24,760 --> 00:04:27,080
Speaker 1: Yeah yeah, Well see this is the thing too, and

77
00:04:27,080 --> 00:04:30,600
Speaker 1: this is what makes it hard for voters, ordinary consumers

78
00:04:30,640 --> 00:04:33,640
Speaker 1: of electricity to understand, let alone the whole pricing network

79
00:04:33,640 --> 00:04:37,600
Speaker 1: of electricity full stop. But you get politicians quoting different things,

80
00:04:37,640 --> 00:04:40,960
Speaker 1: and Chris Bowen, for instance, in his suggestion that three

81
00:04:41,080 --> 00:04:43,320
Speaker 1: hundred and seventy billion was the figure that he came

82
00:04:43,400 --> 00:04:46,320
Speaker 1: up with to build nuclear plants around Australia we've got

83
00:04:46,320 --> 00:04:49,600
Speaker 1: yours suggest you know, I'm sure all reasoned out properly

84
00:04:49,640 --> 00:04:53,320
Speaker 1: and using whatever data is available, but ultimately with and

85
00:04:53,320 --> 00:04:55,640
Speaker 1: I'm not suggesting this for your information, but some you

86
00:04:55,680 --> 00:04:56,960
Speaker 1: can certainly drive trucks through.

87
00:04:58,000 --> 00:05:00,960
Speaker 2: Yeah, So for us, that's why we when you've got

88
00:05:01,000 --> 00:05:07,480
Speaker 2: to use real world project experience. There are one projection

89
00:05:07,600 --> 00:05:10,120
Speaker 2: after another about what the cost might be. I call

90
00:05:10,160 --> 00:05:12,320
Speaker 2: it that could have, would have, should have cost. And

91
00:05:12,640 --> 00:05:15,720
Speaker 2: the nuclear industry is just being rice with this because

92
00:05:16,800 --> 00:05:19,600
Speaker 2: in the end they've they've had a number of optimistic

93
00:05:19,640 --> 00:05:21,760
Speaker 2: forecasts of what they thought their cost would be, and

94
00:05:22,000 --> 00:05:24,640
Speaker 2: you know, they're based on some detailed engineering analysis. But

95
00:05:24,680 --> 00:05:27,520
Speaker 2: then when it gets down to the construction site, these

96
00:05:27,520 --> 00:05:30,640
Speaker 2: are really complex projects and it's a bit like snowy

97
00:05:30,640 --> 00:05:32,640
Speaker 2: two point oh. You know snowy two point oh. You know,

98
00:05:32,680 --> 00:05:35,000
Speaker 2: they would have done a whole heap of analysis. You know,

99
00:05:35,000 --> 00:05:37,800
Speaker 2: they got a six price contract for five billion dollars

100
00:05:38,120 --> 00:05:41,040
Speaker 2: and now they're up for ten billion dollars, right because

101
00:05:41,920 --> 00:05:44,800
Speaker 2: in the end, the construction company that gave them a

102
00:05:44,800 --> 00:05:48,120
Speaker 2: six price contract win bankrupt and then they go, well,

103
00:05:48,279 --> 00:05:50,800
Speaker 2: do we abandon this project after spending a whole heap

104
00:05:50,839 --> 00:05:53,159
Speaker 2: of money or do we just take it on the

105
00:05:53,240 --> 00:05:56,400
Speaker 2: chin and proceed through And it turns out the rocks

106
00:05:56,400 --> 00:05:58,080
Speaker 2: a little bit harder than what we thought it was.

107
00:05:58,320 --> 00:06:00,680
Speaker 2: We didn't drill enough hold of the sorts of things

108
00:06:00,720 --> 00:06:06,200
Speaker 2: that happened, and so we use real world examples Czech Republic, US, Finland,

109
00:06:06,480 --> 00:06:09,880
Speaker 2: UK and France. And these guys are experienced in the

110
00:06:09,960 --> 00:06:14,000
Speaker 2: nuclear industry. It's not like we're talking about inexperienced people

111
00:06:14,000 --> 00:06:16,560
Speaker 2: that were involved in building these projects. But in the

112
00:06:16,640 --> 00:06:19,279
Speaker 2: end they generally went about three times over budget. And

113
00:06:20,400 --> 00:06:22,839
Speaker 2: so you know, the cost impact, I mean it's the

114
00:06:22,920 --> 00:06:25,960
Speaker 2: medium impact with six hundred and sixty five dollars, but

115
00:06:26,000 --> 00:06:28,880
Speaker 2: the medium is not you know a lot of households,

116
00:06:28,880 --> 00:06:32,799
Speaker 2: for example, a mum, dad and two kids. That household

117
00:06:32,800 --> 00:06:36,000
Speaker 2: would consume more than the average and the cost impact

118
00:06:36,080 --> 00:06:39,200
Speaker 2: on a household of four would be around one thousand

119
00:06:39,240 --> 00:06:42,599
Speaker 2: dollars extra on their electricity bill, which is absolutely staggering.

120
00:06:42,640 --> 00:06:45,080
Speaker 2: And I think the problem we've got here is we've

121
00:06:45,080 --> 00:06:48,359
Speaker 2: got a bunch of politicians making decisions. They made that

122
00:06:48,480 --> 00:06:50,479
Speaker 2: they made the mistake with snow two point zero, and

123
00:06:50,480 --> 00:06:53,440
Speaker 2: they let their ego get in the way instead of

124
00:06:53,440 --> 00:06:56,400
Speaker 2: doing the detailed studies to really thoroughly understand the geology.

125
00:06:56,960 --> 00:07:00,160
Speaker 2: And we see the same thing happening with nuclear power.

126
00:07:00,279 --> 00:07:04,599
Speaker 2: And the people that end up copying this is the

127
00:07:04,640 --> 00:07:07,440
Speaker 2: politicians are spending other people's money. They're not spending their money,

128
00:07:07,960 --> 00:07:11,320
Speaker 2: and so you end up paying the bill, you know,

129
00:07:11,360 --> 00:07:13,800
Speaker 2: and the households are going to end up paying way

130
00:07:13,880 --> 00:07:16,760
Speaker 2: more than what they currently pay. So I think we've

131
00:07:16,760 --> 00:07:19,600
Speaker 2: got to be really careful about politicians doing this. And

132
00:07:19,640 --> 00:07:22,160
Speaker 2: that's why, I mean, really, that's why a private sector

133
00:07:22,160 --> 00:07:25,320
Speaker 2: won't go and new these projects. All of these are

134
00:07:25,360 --> 00:07:29,080
Speaker 2: being driven by government agencies or they're being driven by

135
00:07:30,360 --> 00:07:34,760
Speaker 2: essentially regulated monopolies that know that they can pass the

136
00:07:34,840 --> 00:07:36,280
Speaker 2: cost on too in consumers.

137
00:07:36,440 --> 00:07:37,920
Speaker 1: There we go, Chris, you have to leave it. They

138
00:07:37,960 --> 00:07:39,160
Speaker 1: appreciate your time this morning.

139
00:07:39,160 --> 00:07:40,640
Speaker 2: Thank you as Thank you very much.

140
00:07:40,720 --> 00:07:44,760
Speaker 1: Christ Anita's report co author and director at Green Energy Markets,

141
00:07:44,800 --> 00:07:50,240
Speaker 1: finding based on overseas experience and figures and translating them

142
00:07:50,280 --> 00:07:53,760
Speaker 1: to Australian dollars and all the rest, your typical electricity

143
00:07:53,800 --> 00:07:57,520
Speaker 1: bill could increase by six hundred and sixty five dollars

144
00:07:57,560 --> 00:08:01,720
Speaker 1: a year on average. Now that's before we know how

145
00:08:01,800 --> 00:08:06,480
Speaker 1: the coalition plans to pay and structure the cost of

146
00:08:06,840 --> 00:08:10,280
Speaker 1: going nuclear. They haven't released all the details, just the sites.

147
00:08:11,280 --> 00:08:14,360
Speaker 1: But chief Finland's interesting because, yes, I've said before how

148
00:08:14,360 --> 00:08:17,520
Speaker 1: they've been over budget and over price. I just assume

149
00:08:17,560 --> 00:08:19,600
Speaker 1: their taxpayers would be picking up the cost of it.

150
00:08:19,640 --> 00:08:23,720
Speaker 1: I didn't realize France paid for it inadvertently. How about that?

151
00:08:23,760 --> 00:08:26,160
Speaker 1: And then we've paid France for not buying their subs.

152
00:08:26,240 --> 00:08:29,040
Speaker 1: I'm sure for them it's revenue neutral. We're just the

153
00:08:29,080 --> 00:08:33,640
Speaker 1: bunnies in that sort of inadvertently paid for Finland's nuclear

154
00:08:33,760 --> 00:08:35,440
Speaker 1: project out of Australian dollars