Government control is needed rather than investment industry control

There are four important benefits that come from the underpinning of nuclear energy investment by Government.

Firstly, cost savings occur through uniformity of systems, rather than through a piecemeal approach driven by different investor groups.

Secondly, there are important long term geopolitical considerations in choosing a reactor supplier for Australia. For instance, the Government may consider Russian and Chinese reactors to be too high a risk, if there is the chance of any trade dispute with either country.

Thirdly, institutional investors are looking at returns on investments over a period of 20 years or less. They don’t typically have an appetite for the longer term of 80 to 100 years. This doesn’t align with the long term energy needs of Australia.

Finally, institutional investors look at short term risks such as project delays that are less of a concern to the government when the investment is amortized over the overall life of the project, being 80 to 100 years.