Nuclear future worth $17 billion a year to Australia

15 May 2008

Australia's minister for resources and energy, Martin Ferguson, has launched a major new economic analysis of the potential for Australian uranium supply to meet world needs to 2030. Carbon prices to fight climate change would boost the Australian economy via uranium exports.


Olympic Dam (Image: Macmahon) 

Mining at South Australia's Olympic Dam,
where copper, gold, silver and uranium
are sourced 
(Image: Macmahon)

The report, Outlook for the Uranium Industry, considers two world scenarios beyond the base case: moderate action to address climate change so as to stabilise atmospheric carbon dioxide (CO2) concentration at 550 parts per million (ppm) by 2050, and aggressive action to cut CO2 emissions by 60% as recommended by many scientific commentators.


The first scenario, dubbed Climate Action, involves projecting 960 GWe of nuclear capacity operating by 2030, compared with 372 GWe today. This is in line with the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report projection based on a price of $50 per tonne of CO2.


The second scenario, Climate Crisis, projects 1634 GWe nuclear operating by then. This level is consistent with limiting the average rise in global temperatures to about two degrees Centigrade by stabilising CO2 concentrations at 450 ppm CO2 by 2050.  It would require at least $100 per tonne CO2 carbon cost.


The first outcome is is considered the most likely, though a 550 ppm CO2 level is far higher than 385 ppm today.


With Australia supplying 25% and 30% respectively of world uranium demand in the two scenarios, Australian exports would total 31,400 tonnes and 64,500 tonnes of uranium respectively in 2030, assuming present domestic political constraints disappear. 


The considerable economic benefits to Australia are quantified, as are the world benefits in reduction of carbon dioxide emissions. Michael Angwin, executive director of the Australian Uranium Associsation said: "Even in the more conservative scenarios in this research, expanding Australia's uranium industry to its potential would increase Australian GDP by between A$14.2 billion and A$17.4 billion ($13.3-16.3 billion) in net present value terms to 2030."


"Under those same scenarios, the expansion of uranium exports would enable between about 11 billion tonnes and 15 billion tonnes of greenhouse gas emissions to be avoided globally up to 2030. These scenarios are based on moderate global action to address climate change. If deeper action were required, the Australian uranium industry could play a larger role with more substantial economic benefits for Australia," Angwin said.


The report was commissioned last year by the AUA, since no such study had been done for 15 years. It was undertaken by a Deloitte - Insight Economics team using a well-established economic model.