Two reports have laid out the challenge for Peter Dutton to convince Australia to turn nuclear, spelling out the risk of supply shortfalls and increases of hundreds of dollars to power bills to do so.
The Coalition continues to campaign on a proposal to build seven nuclear power sites in the coming decades instead of ramping up solar, wind or hydrogen power as its solution to cutting carbon emissions to net zero by 2050.
It is yet to detail that policy, but Mr Dutton has promised to release costings either before the end of this year or before the federal election.
In the absence of those details, a United-States think tank has become the first to attempt to put a dollar figure on the cost to people’s power bills for Australia to adopt the Coalition’s nuclear proposal.
The Institute for Energy Economics and Financial Analysis says power bills would have to rise by about $665 per year on average to meet the cost of building seven nuclear plants.
Meanwhile, the federal government has capitalised on the information void left by the Coalition, releasing Energy Department analysis that has concluded without additional action the Coalition’s nuclear policy would fall well short of energy demands.
The department said demand for electricity was expected to be 1.5 times greater by 2035, and to meet that demand Australia must replace any exiting generation like retiring coal plants, as well as add an extra 67 gigawatts for a total 153.5 gigawatts of supply.
It said assuming the life of coal plants was not extended and the Coalition did not build any new utility-scale renewable projects beyond what was already committed, it would leave as much as half of Australia’s energy needs unserved.
If those retiring coal plants had their lives extended beyond 2040, it would still result in almost a fifth of demand being unmet, leading to widespread blackouts, the department determined.
Energy Minister Chris Bowen said the government’s analysis showed the Coalition’s plan was “a dud”.
“The question Mr Dutton has to answer is: where will the electricity come from? Where will he get the power from?” he challenged.
“They would rely more on coal-fired power stations, remembering we haven’t had a day, not a single day in the last year in which we haven’t had an unexpected outage from a coal-fired power station.”
Chris Bowen questioned how the Coalition would generate enough electricity before its proposed nuclear plants come online. (
ABC News: Matt Roberts
)
Mr Bowen called upon the Coalition to provide the details of its energy plan now.
Speaking on Nine this morning, the opposition leader rebuffed the criticisms of his nuclear plan, saying the federal government’s energy policy had done no better in bringing down prices.
“We need to deal with reality here, and this is Chris Bowen, who promised before the election that power prices would come down by $275. They’ve gone up by $1,000,” Mr Dutton said.
“He’s predicting now that in 2037, your electricity bill will go up by $650 [under a nuclear policy]. I mean, is that credible? Does anyone believe what Chris Bowen has to say? I suspect not.”
Shadow Energy Minister Ted O’Brien told ABC News Radio this morning that the Coalition’s costings would “certainly” be released by the end of this year.
He said the Coalition supported a “balanced” energy mix that would include renewables, gas and nuclear power to replace coal as it exited the system.
Ted O’Brien committed to the Coalition releasing its costings by the end of the year. (ABC News: Nick Haggarty)
Dollar figure placed on seven nuclear plants
In May the national science agency CSIRO estimated nuclear power would cost roughly double the price of other renewables, and it would take at least 15 years for the first nuclear plant to be delivered.
CSIRO found the cost per megawatt hour for nuclear would be roughly the same as coal and gas, but even at its cheapest would cost more than solar and wind power, at roughly $155 per MWh compared to $134 for solar power. Commercially unproven small modular reactors were estimated to be even more expensive, costing at least $387 per MWh.
Its GenCost report is a comprehensive assessment of pricing for new power generation that is conducted in Australia and informs the market regulator, though the Coalition at the time rejected those cost estimates.
The Institute for Energy Economics and Financial Analysis modelled several nuclear scenarios and found it would cost 1.5 to 3.8 times more than the current cost of electricity to add nuclear to the nation’s energy mix, based on the costs of six recent projects in countries comparable to Australia.
It says if those plants could be built at the cost anticipated for a new plant in Czechia, power bill increases could be kept to a $260 average increase, but that would rise to about $1,259 based on the costs of the United Kingdom’s Hinkley Point C plant under construction.
However several assumptions have been baked into those estimates, including that taxpayer subsidies would be ruled out, investments would receive a commercial return, that the seven plants would operate at full capacity almost all of the time and therefore “power prices would need to average out at the level a nuclear plant needs to be commercially viable – to recover their costs – almost all of the time”.
Mr O’Brien said the report had cherry-picked projects where costs had blown out, and had not contacted the Coalition to request to model its policy.
Shadow Treasurer Angus Taylor flatly rejected the energy department’s and IEEFA’s assessments.
“I don’t know what policy they’ve modelled, but it sure as hell isn’t ours,” he said.
