Client Update: SA Nuclear Fuel Cycle Royal Commission's tentative findings
16 February 2016
In brief: The South Australian Nuclear Fuel Cycle Royal Commission has released its tentative findings. The Royal Commission will now embark on a series of meetings, at various locations around South Australia, to discuss these findings with interested stakeholders. Partner Richard Malcolmson (view CV) and Senior Associate Emily Gerrard comment on the findings and the next steps to be taken by the Royal Commission.
As reported in our Client Update in December 2015, the Nuclear Fuel Cycle Royal Commission was established by the South Australian Government in March 2015 to undertake an independent investigation into the potential for increasing South Australia's participation in the nuclear fuel cycle. The Royal Commission has focused on four key areas:
- expanded exploration and mining of minerals;
- further processing of minerals and reprocessing and manufacture of materials containing radioactive and nuclear substances;
- the use of nuclear fuels for electricity; and
- the establishment of facilities for the storage and disposal of radioactive and nuclear waste.
Over the past year, the Commission has conducted hearings and heard evidence from a number of expert witnesses. It has also considered a number of written submissions.
Initial sections of the document contextualise the tentative findings within a discussion of the broader energy sector and its future. Transformation in the energy sector is noted, along with climate change and carbon emissions reduction ambitions. Reference is made to key commitments in the Paris Agreement negotiated in December 2015 and its overall purpose: to hold global average temperatures to a level which is well below 2ºC above pre-industrial levels. The Commission also notes the role of nuclear energy in meeting global greenhouse gas reduction ambitions and a target of zero energy sector emissions by 2050. However, the ability for South Australia to move to nuclear power sources is influenced by the lead times to establish new capacity and technology, as well as the need to overcome political and legislative hurdles to facilitate development. The Commission acknowledges these obstacles and, as noted below, has reached a tentative conclusion which confirms that nuclear power is not a viable option for South Australia in the foreseeable future.
The Commission's key tentative findings include that:
- exploration and mining of uranium is valuable to South Australia, but an expanded industry is not the most significant opportunity for the State. Barriers to expansion of the industry identified include price uncertainty, development costs and the regulatory and approvals regime. South Australia could derive more value from uranium extraction if it were able to process a fuel source for potential 'fuel leasing' (involving the return of used fuel for storage, potentially with some processing of uranium in South Australia);
- the commercial development of uranium processing capabilities in South Australia is not a viable opportunity in the short-term. However, fuel leasing may present a commercially attractive opportunity and allow technology transfer opportunities, as well as add greater value to the uranium exploration and mining industry;
- the management, storage and disposal of nuclear waste can deliver substantial economic benefits to South Australia. Further, the tentative findings indicate that an integrated storage and disposal facility could be commercially viable and operational by the late 2020s; and
- despite a number of potential benefits, the future demand for and anticipated costs of nuclear power (including small modular reactors) mean that it is unlikely to be commercially viable in South Australia in the foreseeable future.
The tentative findings highlight the importance of 'social and community consent' for any new nuclear activities to commence in South Australia. The Commission considers that broad public support for and legislative endorsement of an activity would be necessary to repeal or amend laws that currently prohibit the establishment of nuclear facilities in South Australia. These observations are particularly relevant to opportunities associated with the development of a waste facility. As noted in our March 2015 Focus, legislation enacted by the South Australian Government, following previous attempts to identify suitable locations for a nuclear waste facility, currently precludes the establishment of such a facility in South Australia.
Noting the history of atomic weapons testing at Maralinga in the 1950s and 1960s, and its impacts on Aboriginal people in South Australia, the Commission emphasises the importance of comprehensive engagement with Aboriginal peoples in South Australia. Also, the Commission identifies that new regulatory frameworks would need to be developed for activities beyond current exploration and mining of uranium in the State. The tentative findings include a high level discussion of the types of framework or oversight that may be appropriate for any new nuclear activities.
The tentative findings of the Royal Commission have been released to stimulate discussion and engagement with the community and stakeholders before the Royal Commission completes its final report in May 2016. The Commission is conducting a series of public information meetings this week and is seeking responses to the tentative findings by 5.00pm on 18 March 2016.
- Richard MalcolmsonPartner,
Ph: +61 2 9230 4717
- Ben ZillmannPartner,
Ph: +61 7 3334 3538
- Jodi ReinmuthPartner,
Ph: +61 8 9488 3702
- Chris SchulzConsultant,
Ph: +61 3 9613 8772
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