Published in Business Spectator (Melbourne), 8 July 2010

http://www.businessspectator.com.au/bs.nsf/Article/nuclear-power-atomic-energy-europe-renewables-pd20100707-75DVG?opendocument

If there had ever been a competition for world improvement, Sweden would have won hands-down. Even among their fellow European do-gooders, the Swedes have always strived to be more social, more peaceful, and more environmentally friendly than the rest. As if Abba, smörgåsbords and Ikea furniture hadn’t delivered a sufficient contribution to the greater good of humankind.

It was in this spirit that the Swedes led the way to end the age of nuclear power. In a referendum back in 1980 they were one of the first countries to vote for a nuclear phase-out. In fact, the option to continue with the construction of new nuclear power reactors was not even on the ballot paper. It was only a question of how fast the country should say goodbye to atomic energy.

Given this background, it is all the more remarkable that Sweden is now leading the phase-out of the phase-out. In a landmark decision, the Swedish parliament recently reversed the country’s decades-long anti-nuclear policy.

Sweden is not alone. In many European countries nuclear technology is experiencing an unexpected renaissance. It is likely that nuclear power will play a significant role in Europe’s energy mix for decades to come. As a supplier of uranium, Australia will obviously profit from this development. But will we also learn the lessons of Europe’s failed energy policies?

When the Swedes delivered their verdict on nuclear power in 1980, the public mood was also firmly against it. The Three Mile Island accident just a year earlier was taken as evidence of the inherent safety risks of the technology, although it actually demonstrated how well such accidents can be contained. When a Soviet reactor in Chernobyl then blew up in 1986, it seemed to sound the death knell for the industry. Other countries also designed national phase-out programs; among them Italy, Germany, Belgium and Austria.

The plans for a world without nuclear power were undoubtedly ambitious. Realistic, they were not. Although the Swedes had originally voted for a switch from nuclear power to renewable energies, they were unable to deliver on the promise they had made to themselves. Water, solar and wind energy never succeeded in replacing nuclear power, which still accounts for almost half the electricity generated in Sweden today.

It has been a long and painful process of realising that alternative energies are still not capable of meeting the needs of an energy-hungry industrial country like Sweden. Although the Swedes managed to decommission two of their reactors in 2005, the remaining ten nuclear power stations were modernised at high cost. After these investments, it looked unlikely that the original phase-out plan would remain in place.

Public opinion on the issue had also changed, with nuclear power enjoying the support of four out of five Swedes. Parliament’s decision to lift the ban on the construction of new power stations was only the formal recognition of a policy reversal that had begun years earlier.

Now other European countries have come to similar conclusions. The UK wants to replace its ageing nuclear reactors with a new generation, although progress on these plans has been slow. In Finland, work is already underway to build the world’s largest nuclear plant with a capacity of 1,600 megawatt at Olkiluoto. At an investment volume of about €5.5 billion ($A8.2 billion) it is also the biggest ever Finnish industrial project. Last week, Finland’s parliament approved two further nuclear plants with widespread, cross-party support. Surprisingly, a majority of the social-democrat opposition also voted in favour.

There is no doubt that public opinion on nuclear power has changed since Three Mile Island and Chernobyl. Even in Germany, with its strong environmental lobby, opinion polls show that two thirds of the population support the continuation of nuclear power, as long as renewables are unable to replace it. However, the reversal of German phase-out plans is still a hotly contested issue – not least because Chancellor Merkel’s government has discovered the potential to turn the country’s nuclear U-turn into a revenue raiser.

In a debate reminiscent of Australia’s RSPT, the German government is arguing that extending the lifespan of existing power stations would amount to a windfall for the utilities operating them. Spotting these alleged windfalls, the government has announced plans for a new nuclear fuel tax, effectively syphoning the energy industry’s profits, which otherwise could have been invested in renewable energies. In any case, it is a strange idea to tax an industry for the privilege of not being shut down by law.

Europe’s nuclear volte-face is welcome news to uranium miners like BHP Billiton and Rio Tinto, and Australia will benefit from it. Beyond this, there is an obvious lesson to learn. Decades of political rhetoric and efforts to move away from conventional energy generation have not been sufficient to herald the age of renewable energy. Instead, one after the other, European countries are going back to once unpopular nuclear power for their baseload electricity needs.

Australian politicians should keep this experience in mind when they are considering our future energy mix. And, given the time it takes to build up nuclear capacity, it would be sensible to re-open the debate about nuclear power in Australia now.

The Swedes, meanwhile, continue to occupy the role of the world’s foremost do-gooders. But being good still requires a lot of energy.