(Bloomberg) -- Australia should consider lifting a ban on nuclear power as it rushes to replace retiring coal plants with clean energy, according to Origin Energy Ltd., a utility set to be acquired by Canada’s Brookfield Asset Management in a multibillion-dollar deal.
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Investment in renewables isn’t happening fast enough to meet government targets and nuclear, along with natural gas, should be “part of the debate,” Origin Chief Executive Officer Frank Calabria said Thursday in an interview.
“There has been quite a bit of development in small modular reactor technology, and they look encouraging,” Calabria said, adding that community concerns about safety would need to be addressed.
Origin joins a chorus of voices — ranging from BHP Group Ltd. and mining magnate Gina Rinehart to the center-right Liberal-National opposition — calling for a lifting of the moratorium that’s been in place since the 1990s. The Labor government has called the push a “rather large attempted distraction” as it seeks to shift the coal-dominated power sector to 82% renewables by the end of the decade.
Read More: Mining Giant BHP Wants Australia to Scrap Nuclear Power Ban
The rapid proliferation of cheap renewables over the last decade — particularly rooftop solar — has damaged the profitability of coal plants, forcing utilities including Origin to bring forward closure dates. The government’s 82% target is “challenging” and would require building transmission and renewables “at a pace that’s faster than we’ve ever gone before,” Calabria said.
Energy Minister Chris Bowen this week blasted the calls for atomic power, especially small nuclear reactors, and pointed to studies showing them as the most expensive form of generation with renewables the cheapest.
The government seeks “to capitalize on Australia’s potential as a renewable energy powerhouse,” he said in a speech on Tuesday. “I’ll say it simply: nuclear power for Australia doesn’t stack up.”
Calabria also called on the government to subsidize back-up gas generators to ensure supply at times of weak wind and sun and very high demand — including in the evening and during cold winters and extreme heat waves.
Brookfield and consortium partner EIG Global Energy Partners agreed to acquire Origin for A$18.7 billion ($11.9 billion) in March, and seek to complete the deal early next year. Brookfield will take the utility business and EIG the natural gas production unit. Brookfield has said it intends to invest at least another A$20 billion in Origin’s clean energy portfolio by 2030.
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