Across Australia and to Paris - Recent developments in the nuclear fuel cycle

In brief

Partner Richard Malcolmson, Senior Associate Emily Gerrard and Associate Emily Johnstone report on recent developments in the Australian nuclear fuel cycle debate, including: the recent shortlisting of potential sites by the Australian Government for a radioactive waste management facility; the conclusion of the uranium export deal between Australia and India; and potential implications for nuclear energy following the 'COP21' climate change negotiations in Paris. 

Shortlist for national radioactive waste facility announced

The Australian Government recently released its shortlist of six sites being considered for a national nuclear waste disposal facility.¹ The Government has indicated that it will buy appropriate sites at four times their market value, and will offer local communities near the final site $10 million to spend on local projects and infrastructure.² The shortlist includes three sites in South Australia, at Cortlinye, Pinkawillinie and Barnidoota, one in the Northern Territory at Hale, one in New South Wales at Sally's Flat and one site in Queensland at Oman Ama. The Australian Government is seeking comments from members of the public with rights or interests in the sites, as well as from members of local communities, until May 2016.³

The release of the shortlist has yielded mixed responses. Traditional owners living on Mpwelarre Land Trust land, seven kilometres from the proposed Hale site, and members from the nearby Ltyentye Apurte (Santa Teresa) and Titjikala communities have opposed the Northern Territory proposal during consultation meetings run by the Government throughout December.⁴ By contrast, councillors from the Shire of Leonora in Western Australia's goldfields have voted to engage a geological consultant to assess suitable waste sites, despite the Australian Government excluding Leonora from its shortlist.⁵ The Council believes it is 'fair' for a waste site to be located in the area since the region will host a number of uranium mines in the coming years.⁶

The Commonwealth Minister for Resources, Energy and Northern Australia, Josh Frydenberg, has indicated that the national facility would be limited to the management and storage of domestic waste.⁷ However, Prime Minister Malcolm Turnbull has described Australian involvement in the global nuclear fuel cycle as a business opportunity 'worth looking at closely'.⁸

Despite the inclusion of sites on the shortlist from South Australia, the South Australian Premier Jay Weatherill has indicated that South Australia will not agree to host a facility until the South Australian Royal Commission has released its findings next year. However, the Premier has described a nuclear waste disposal facility as a 'potential opportunity' that might exist for the State.⁹ Mr Weatherill commented that his government is willing to reconsider South Australia's strong opposition to a 1998 Howard government proposal to construct low and high-level nuclear waste facilities in South Australia.¹⁰

Existing facilities storing Australia's low-level radioactive waste are reaching capacity.¹¹ Radioactive waste is currently stored at more than 100 sites across Australia which are licensed to store waste on a temporary basis, with most stored at the Lucas Heights reactor in New South Wales and a facility at Woomera in South Australia. In addition, the Australian Nuclear Science and Technology Organisation has recently announced that fuel sent overseas is to be sent back to Australia, with an initial shipment arriving at Port Kembla in New South Wales on 5 December.¹² This returned waste will be temporarily stored at Lucas Heights, but according to Minister Josh Frydenberg, more permanent and increased storage capacity is needed.¹³

Nuclear Fuel Cycle Royal Commission

South Australia is in the middle of public hearings for its Royal Commission into the Nuclear Fuel Cycle, headed by former South Australian Governor Kevin Scarce. The inquiry is essentially an investigation into opportunities and risks associated with the mining, enrichment, energy generation and storage of nuclear material in South Australia.¹⁴

Submissions received by the Royal Commission confirm the broad range of views held about Australia's role in the global nuclear industry. Some submissions have emphasised the significant economic benefits, while others have focused on health concerns, issues associated with nuclear waste sites being located on Aboriginal land and on the inherent risks associated with exporting fuel rods overseas.

A submission made by South Australia's Economic Development Board contends that there is a highly profitable opportunity in waste treatment for South Australia.¹⁵ It estimates that the economic benefits from spent fuel custody revenues, and the electricity revenues from new-generation recycling and reactor technology, could range from $15-35 billion.¹⁶

The Australian Government's submission also identified an opportunity for market entry into storage, management and disposal of nuclear and radioactive waste, noting Australia's comparatively stable geology which makes it suitable for the underground disposal of long-lived high-activity waste.¹⁷ This submission also noted that:

• while the National Electricity Market is unlikely to require new generation capacity before 2023-24, market conditions could change during the time it would take to establish a nuclear power program, and there may be opportunities in the meantime to install off-grid generators;¹⁸ and
• early consideration of the ‘relative merits’ of nuclear electricity generation is necessary to inform investment decisions and regulatory arrangements.¹⁹

Other recent developments

• In other developments, the Australian and Indian prime ministers announced from the sidelines of the recent G20 summit in Turkey that the bilateral uranium export deal (read our earlier Client Update on the bilateral agreement) between the two countries can now commence, following the completion of necessary domestic procedures.²⁰ The India Australia Civil Nuclear Cooperation Agreement was signed in September 2014 after the two countries reached agreement on safeguards to ensure peaceful power generation.²¹
• Toro Energy's plans to expand its Wiluna Uranium Project with two new deposits have progressed following the release of a Public Environmental Report.²² The project already has two deposits, known as Centipede and Lake Way, which were approved by the Western Australian Environment Protection Authority in 2012. At this stage, the company has not commenced mining at any of its deposits.²³ Public consultation on the two new deposits and a proposed haul road is open until February 2016.
• Finally, announcements before and during the recent United Nations Framework Convention on Climate Change COP21 negotiations in Paris signal potential further developments in nuclear energy:
  • The Obama Administration recently recognised the importance of nuclear energy in meeting international and domestic greenhouse gas emissions reduction targets. President Obama's announcement confirms commitments to ensure that nuclear energy remains a key part of the United States' clean energy strategy into the future.²⁴
  • The Paris Agreement and COP21 decision establish a framework for developing economies to transition to clean energy and to aid technology transfer and capability building. Director General of the World Nuclear Association, Agneta Rising, said that the nuclear industry 'stands ready' to help achieve the goals of the Paris Agreement, which 'should lead to a more positive outlook for nuclear investments'.²⁵
  • The World Nuclear Association has asserted that there should be '1000 GWe of nuclear new build by 2050 as part of a balanced low-carbon future energy mix', which will require the adoption of harmonised global nuclear regulation and ongoing investment in new generation nuclear technology.²⁶ Similarly, the Deputy Director General of the International Atomic Energy Agency, Mikhail Chudakov, emphasised the role that the Agency can play in assisting member states to meet their climate mitigation goals in their energy and infrastructure planning, by improving their understanding of nuclear technology and its compatibility with sustainability goals.²⁷

With the South Australian Royal Commission due to report on 6 May 2016 (and due to release initial 'Tentative Findings' on 15 February 2016), there are likely to be further developments in the Australian nuclear energy debate in 2016 and  in the medium term. We will continue to monitor developments in both the international and domestic energy discussion over the coming months.