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Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

Australian Safeguards and Non-Proliferation Office

Annual Report 1999-2000

The Nuclear Industry - Some Current Issues

In view of Australia's position as a major uranium exporter and holder of the world's largest uranium reserves, clearly future developments in the nuclear industry are of considerable interest to Australia. It is essential that nuclear developments, in our region and globally, proceed in a way that enhances non-proliferation objectives. Another area of major importance is the impact of future energy programs on the environment, in particular climate change, and the role of nuclear energy in this context.


It is a common perception that nuclear energy is an industry that has peaked and is facing decline. In recent years there have been no new power reactors built in North America and few in Western Europe, some governments are resolutely against nuclear energy, and one or two governments have adopted a policy of phasing out nuclear energy. The only growth areas appear to be in Asia, but even here some uncertainty has been expressed about the future of the region's largest program, in Japan.

This general impression is misleading. For a start, nuclear energy contributes a very substantial share of world electricity supply16% globally, an average of 25% in OECD countries. Some 32 countries have nuclear power programs (see Table 8 on page 83). In over half these countries nuclear energy contributes more than 25% of electricity supply, in some as much as 70-80%. A number of other countries import significant amounts of electricity generated by nuclear programs.

In addition to electricity supply, both direct and indirect, there is another way in which nuclear power is importantthrough the reduction of greenhouse gas emissions. Global CO2 emissions from electricity generation would increase by 25-30% if existing nuclear power generation were replaced by coal-fired stations.

Increasing electricity demand There is no doubt that global electricity demand will grow very substantially this century, particularly as living standards in developing countries improve. For example, the World Energy Council has estimated[7] that annual world electricity consumption will at least double or even triple over the next 50 years:

Table 6 Electricity projections (figures in terawatt/hours (TWh))

Table 6 Electricity projections (figures in terawatt/hours (TWh))







Conservative middle growth scenario:



High growth scenario:



Electricity consumption could be higher still if opportunities for fuel substitution are maximised, e.g. replacing petroleum through large-scale use of electricity in transportation, both directly and through production of hydrogen fuel. Substitution offers very substantial environmental benefitsbut only if supplied by non-fossil sources.

Clearly if a two to three-fold expansion in electrical production were based on fossil fuels the environmental consequenceslocal and globalwould be very serious. Environmental impact has to be a key consideration in making energy choices. Other essential factors will be economics and security of supply. As an illustration, natural gasthe fuel of choice for new power stations in many countriesfaces a number of uncertainties in the future: there are predictions that world natural gas production will plateau in 30-35 years, reflected in escalating prices well before then; much of the world's supply comes from, or through, areas of uncertain political stability; and of course use of natural gas releases major greenhouse gases, CO2 and methane.

Energy choices Governments will choose an energy mix depending on particular national circumstances, e.g. availability of energy resources, including the feasibility of renewables, opportunities for energy conservation and fuel substitution, and so on. Of the various non-fossil sources, only hydropower and nuclear have a demonstrated ability to generate large-scale baseload electricity. Hydro-electrical schemes are not without environmental (including greenhouse) consequences and political difficulties, and in OECD countries few suitable sites remain. The ability of nuclear energy to significantly mitigate the environmental and climate change consequences of using fossil fuels can be expected to become increasingly relevant to decisions about national energy mixes.

Factors affecting the status of nuclear energy In current circumstances there are several factors that work to the disadvantage of nuclear energy:

  • the high capital costs of a new plant;
  • liberalisation of the electricity industry is encouraging short-term profit horizons;
  • comparatively low prices currently for alternative fuels, especially natural gas;
  • whole-of-cycle costs for nuclear are internalised in electricity tariffs, while the indirect costs of other fuels are not;
  • public and political concerns about radioactive waste disposal, safety, and nuclear proliferation.

On the other hand, over the medium to longer term there are important factors which can be expected to lead to a re-evaluation of nuclear energy:

  • increasing public and political concern about the impact of fossil fuels on global climatelikely to be reflected in emission limits and possibly taxation regimes;
  • associated with this, increasing recognition of the internalisation issue, i.e. that electricity tariffs should reflect the true costs of different energy sources;
  • while most power generation is sensitive to rises in fuel pricesincluding taxationwith nuclear capital costs predominate and substantial increases in the price of uranium would have little impact;
  • security of supply considerations.

Issues of waste disposal and safety are beyond the scope of this Reportthese are predominantly issues of public confidence, not technical inadequacies, and there is no doubt greater efforts are required towards improving public understanding. As to nuclear proliferation, there is a robust non-proliferation regime, centred on the NPT and IAEA safeguards, which is outlined elsewhere in this Report.

Seeing nuclear energy in context Overall, there is a need to view nuclear energy in context, not in isolation, with any discussion of nuclear's pros and cons being set against the consequences of other energy sources. The perceived risks of nuclear need to be compared to the certaintiesmany of them adverseassociated with the use of other fuels.

Developments in technology

ASNO maintains a close interest in developments in nuclear technologyfrom two perspectives: the potential for establishment of, and growth in, nuclear programs; and potential implications for the non-proliferation regime and for the application of safeguards.

In the short to medium term there are two broad trends in power reactor technologythe development of reactors incorporating enhanced safety features, such as advanced pressurised reactors (APWRs) and advanced boiling water reactors (ABWRs), and the development of new reactor types which are more economically competitive than those currently available. These two trends are not mutually exclusive:

  • as far as light water reactors (LWRs) are concerned, while there is some concern that APWRs and ABWRs are more expensive than established modelsat a time when the capital costs of nuclear are seen as a disadvantage and there is pressure to reduce costsit is possible that standardisation on say two or three models that could be manufactured on an assembly-line basis might bring about offsetting savings;
  • on the other hand, cost considerations have led to considerable attention being given to an entirely different reactor concept, the modular high temperature gas-cooled reactor (MHTGCR), which happens to also offer major safety advantages.

Currently there are two MHTGCRs at an advanced stage of development, the pebble-bed design of South Africa's ESKOM, and a design from a US/Russian/French/Japanese group led by the US company General Atomics (GA). Both designs are graphite-moderated and cooled by helium which drives a turbine for electrical generation directly (i.e. there is no steam cycle). Both feature emergency passive cooling, i.e. safety does not depend on forced circulation of the coolant. Both are designed to be installed in modules, the ESKOM unit having a capacity of 114 MWe and the GA unit 284 MWe. The small size suits smaller grids, while the modular approach allows capacity at a particular site to be increased progressively by installation of more units. The ESKOM reactor is designed to operate on fuel of around 7-10% enrichment. The GA reactor could operate on a variety of fuels, but is being looked at particularly for the consumption of plutonium released from the Russian weapons program.

Both reactors are designed to operate on a once-through cycle, i.e. the fuel would not be reprocessed, and in fact reprocessing would be complicated due to the presence of graphite. If these reactors live up to expectations they will be substantially cheaper to build than LWRsin the case of the ESKOM design around half current LWR costs. A number of experts are predicting that the MHTGCR will be the next generation of reactor, likely to be chosen for many new nuclear power plants over the period 2010-2030.

On current information the MHTGCR appears to offer advantages from the non-proliferation/safeguards perspective. ASNO will be following the development of this technology with considerable interest.

Plutonium recycle and fast reactors

The thermal fuel cycletypified by the LWR (the MHTGCR is also a thermal reactor)is an extremely inefficient use of uranium resources, generating energy primarily from the fissile uranium isotope U-235 which comprises only 1/140th of natural uranium[8]. At current rates of consumption, existing and estimated uranium reserves recoverable at up to $US80/kg (compared with current spot prices around $US20/kg) are sufficient for only about 50-60 yearsgrowth in the nuclear industry will reduce this period. Of course, further uranium discoveries can be expected, and very substantial higher cost uranium resources exist (e.g. seawater offers a virtually unlimited supply, albeit at about 10 times current prices). Higher costs, however, will make inefficient resource use even less sustainable.

The most efficient use of uranium resources will come from the use of the fast neutron fuel cycle. The basis of this fuel cycle is the use of fast (unmoderated) neutrons to convert the predominant uranium isotope U-238 to plutonium, and the use of that plutonium as reactor fuel. The development of fast neutron reactors is generally on hold at present, mainly for economic reasons (particularly depressed uranium prices), but also because of engineering complications, and public concerns about safety following incidents at Super-Phnix (France) and Monju (Japan). Nonetheless, the advantages of the fast neutron fuel cycle頗in energy terms and also for high level waste management (see the article on partitioning and transmutation on page 70)are such that it may well come into widespread use in the future.

It should be noted that plutonium plays a significant part even in the current thermal cyclee.g. towards the end of a fuelling cycle about half the energy in an LWR comes from the fissioning of plutonium produced in the fuel. However, thermal reactors are inefficient users of plutonium: very little of the non-fissile[9] plutonium isotopes can be fissioned in a thermal reactor, and only a small fraction of the potential energy from plutonium can be realised. Use of MOX fuel in LWRs can be viewed as a fill-in measure pending establishment of the fast neutron fuel cycle.

Conventional fast breeder reactors (FBRs), such as Super-Phnix and Monju, use MOX (uranium/plutonium oxide) fuel with a relatively high proportion (20-30%) of plutonium. The fuel is surrounded by a uranium 頑blanket in which neutrons are captured to produce further plutonium. The blanket can be made from depleted uranium, thus providing a use for the millions of tonnes of tails left over from the uranium enrichment process which currently are essentially a waste material. The plutonium produced in the blanket is recovered by reprocessing, and made into fresh fuel. An issue from the non-proliferation perspective however is that plutonium produced in FBR blankets has a very high proportion of the isotope Pu-239, making it highly suited to nuclear weapons.

While on the face of it greater use of plutonium recycle, and the introduction of the fast neutron fuel cycle, will present the non-proliferation regime with new challenges, it is possible for these developments to be pursued in ways which will actually enhance non-proliferation objectives. This is the subject of the following article, on non-proliferation issues.


Despite the popular perception of an uncertain future, there are a number of developments that are likely to lead to a re-evaluation of nuclear energy, especially increasing recognition of the global effects of different energy choices, and the changing economics of various energy sources. This century a massive expansion in electricity supply will be essential for rising living standards, and nuclear energy can make a major contribution to mitigating the impact of greatly increased fossil fuel use. Within the nuclear industry there are developments, such as the emergence of new reactor types, aimed at enhancing the competitiveness of nuclear energy. It is essential that an expansion of nuclear programs occurs in a way that enhances non-proliferation objectives. As a major uranium supplier and a key supporter of the non-proliferation regime, Australia is well placed to exercise a constructive influence on these developments, and it is clearly in our national interest to do so. This is an important aspect of ASNO's work.

[7]. WEC/IIASA (International Institute for Applied Systems Analysis), Global Energy Perspectives, 1998.

[8]. Allowing for U-235 remaining after enrichment in depleted uranium tails, in fact the proportion of uranium unused in the thermal cycle is even greater, around 99.5%.

[9]. The fissile plutonium isotopes are odd-numbered, e.g. Pu-239 and Pu-241. Typically they comprise about 70% of the total plutonium in LWR fuel.

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