You’ll not be surprised to learn that the Switkowski report supports an expansion of the uranium mining industry, regardless of the International Atomic Energy Agency acknowledgement of serious flaws in the safeguards system.
No news there, but the report does manage to surprise by pouring buckets of cold water on the Howard government’s enthusiasm for establishing a uranium enrichment industry in Australia.
The report states that: “The enrichment market is very concentrated, structured around a small number of suppliers in the United States, Europe and Russia. It is characterised by high barriers to entry, including limited and costly access to technology, trade restrictions, uncertainty around the future of secondary supply and proliferation concerns.”
The report finally decides that “there may be little real opportunity for Australian companies to extend profitably” into enrichment and that “given the new investment and expansion plans under way around the world, the market looks to be reasonably well balanced in the medium term.”
Howard likes to compare uranium enrichment to value-adding in the wool industry, which ignores the weapons proliferation protential of uranium enrichment. As the Switkowski report notes: “The greatest proliferation risk arises from undeclared centrifuge enrichment plants capable of producing highly enriched uranium for use in weapons.”
On the “con” side, the report states that nuclear power would be 20-50% more expensive than coal or gas-fired power, and that nuclear and renewable energy sources will only become economically competitive in Australia “in a system where the costs of greenhouse gas emissions are explicitly recognised.” Unpack that and there’s a significant economic challenge for the government.
Further, Switkowski seems to be using the most optimistic estimates of the cost of nuclear power. A recent Victorian Department of Infrastructure report found that coal-fired power stations produce power for $35 per megawatt-hour, while nuclear power would cost between $60-80 per megawatt-hour.
Unfortunately, Switkowski chose to leave out any mention of the numerous studies which find that energy efficiency is 2-7 times more cost-effective than nuclear power in reducing greenhouse emissions.
The EnergyScience Coalition has produced a set of briefing papers and will be responding to the Switkowski report later this week.