Nuclear energy ranks last on the list of climate technologies that big institutional investors want exposure to, according to a survey of climate conscious investors with $37tn under management.
Fewer than one in 10 investors were exploring new investments in nuclear technology in the survey of the Investor Group on Climate Change, whose 100 members include super funds and asset managers looking after the funds of 15 million Australians.
The survey found a rebound in confidence in Australia’s climate policy but a growing appetite for clear timelines for the phase-out of coal, oil and gas.
The opposition, led by Peter Dutton, plans to propose locating nuclear power plants on the site of retiring coal power plants, claiming that this would save having to build new transmission infrastructure for renewables.
But the plan has been widely panned. The energy department has estimated it would cost $387bn to go nuclear, and Dutton faces opposition from his own state colleagues.
Australia’s big private electricity generators have dismissed nuclear energy as a viable source of power for their customers for at least another decade, and likely more.
In the yearly survey by the Investor Group on Climate Change investors were asked which energy and climate solutions they believed had good long-term returns. Nuclear energy was ranked last of 14 possible responses, along with sustainable oceans.
“This is due to nuclear energy’s very high cost, and the lack of maturity and deployment in next generation technologies,” a policy brief on the survey said, citing the CSIRO’s gencost report.
The five most popular options were: renewable energy (backed by 47% of respondents); nature solutions, including biodiversity or nature capital (34%); energy storage (32%); low carbon transport (32%); and industry/materials, including critical minerals (32%).
In 2021 about 70% of investors cited policy and regulatory uncertainty as a barrier to investing in climate solutions, a figure that dropped to 40% in the 2023 data released on Monday.
Asked to nominate the policies they wanted the government to prioritise, most investors (56%) called for sector-by-sector decarbonisation plans to keep global heating under the 1.5C threshold.
There was also majority support for improved carbon pricing through the safeguard mechanism (54%), funding support for new technology (53%), and phasing out fossil fuel subsidies (51%).
The policy brief said “emerging priorities” included mandatory climate-related disclosures, timelines for the phase-out of coal, oil and gas, and clear policies to build resilience and adapt to the physical damages of climate change.
Erwin Jackson, Investor Group on Climate Change’s managing director of policy, said: “Investors have given the government a pretty good report card.
“They’re also sending the message that credible, investible and durable policy frameworks put in place today will support strong investor and beneficiary returns into the future, enhance Australia’s economic competitiveness, and help attract international capital.
“We must have a fair and fast transition to net zero emissions, but we must also adapt.
“Investors look forward to working with governments on initiatives that can incentivise and remove barriers for private sector investment in adaptation across the economy.”
In the 2023 budget the Albanese government gave $2bn to help establish Australia’s hydrogen industry and a further $1bn for households.
In February Anthony Albanese raised expectations of another major energy package in this year’s budget, telling the Hunter Nexus dinner that Australia “must be prepared to think big” to help regions diversify their economies and achieve the energy transition.
Albanese said that “every nation needs to decarbonise and electrify” and this was “a race that Australia can win”.
“No nation is better placed than Australia to achieve this transition here at home – and power it in the world,” he said. “This is a task that traverses far more than energy policy, or industry policy.
“This is a whole-of-nation opportunity and it demands a whole-of-economy approach.”
