Posted: 2024-12-13 06:00:29

Some of the nation's top energy analysts have criticised the Coalition's nuclear plan, saying it will be more expensive, burn more carbon, result in a smaller economy and be more disruptive than Peter Dutton claims.

As experts began unpacking details of the opposition's nuclear costings, released on Friday morning after months of build-up, doubts emerged about the Coalition's belief in the viability of nuclear energy.

One — Grattan Institute energy guru Tony Woods — described the Coalition's assumptions as "heroic" and in defiance of international experience and reality.

Critics pointed out the Coalition has assumed a future in which the economy is smaller than under Labor's plan, with a smaller energy system and a reduced heavy manufacturing base, while many alternate but unavoidable costs such as ongoing use of petrol and diesel are not taken into account.

They also warn that the Coalition's plan does nothing to bring down energy prices in the near or longer term.

"Economic models are interesting, valuable and some say essential, but they don't tell you what's going to happen until you try and build this kit," Dr Woods said of the nuclear plan.

"We know how difficult it's been to build this stuff in the past 25 years, so how do we assume it's going to be so easy in the next 25 years?"

Comparing two versions of the future

The Coalition claims its plan to build nuclear reactors on up to seven sites around the country would cost about $331 billion over 25 years, according to modelling by Frontier Economics.

They have compared that number to Labor's plan, which includes far greater adoption of renewables, batteries and storage, which it calculates will cost $594 billion.

But analysts say the Coalition has cherrypicked the Frontier Economics analysis by comparing two different versions of the future: one in which Australia meets its climate targets and another, under Mr Dutton, in which emissions remain elevated until well into the 2040s.

Under the government's plan, known among experts as the "step change" model, Australia would meet its 2030 globally promised 43 per cent emissions reduction target.

But if the Coalition stuck to that trajectory — which it has expressly said it would not — while adopting nuclear power, the cost would be $446 billion, Frontier's analysis claims.

The Coalition's numbers are not a comparison of the cost of nuclear versus the cost of firmed renewables, economist Stephen Hamilton says.

"They are the difference in cost between renewables and doing nothing for the next 15 years," he said.

"And obviously, the cost of doing nothing for 15 years is much cheaper than decarbonising for 15 years.

"That's why the numbers are different. And what happens after 15 years' time? Who knows. That's the key difference."

Tristan Edis, a respected and seasoned analyst at Green Markets, said the Coalition's nuclear plan was a "recipe for higher electricity bills".

It will also discourage households from adopting rooftop solar, halving the rate of take-up of the past three years, and leave Australians more dependent on higher-cost petrol and gas to power vehicles and home appliances, he said.

"Households that switch to electricity can be expected to reduce overall energy costs by 70 per cent" under the government plan, he said, citing Australian Energy Market Operator (AEMO) data.

"Yes they spend a few hundred dollars more on electricity, but they save thousands off their petrol and gas bills."

Mr Edis said international evidence also undermined the Coalition's view that Australia could build nuclear reactors "far" cheaper than allied countries have managed.

The opposition assumes "a cost per kilowatt of capacity that is 34 per cent to 64 per cent lower than the cost of nuclear builds that have taken place in Europe and North America over the past 20 years," he said.

"The Coalition won't be able to wait around for the nuclear industry to sort out all its problems with cost overruns if it expects to also deliver nuclear reactors on the timeframe envisaged in its modelling.

"In the end, Australians should be asking — if nuclear is so much cheaper, then why do they as taxpayers have to fund the construction of these power stations?

"Why can't the nuclear companies of Electricity De France, Korea Hydro and Nuclear Power and Westinghouse stump up their own cash to build them and compete against renewable energy and battery companies?"

Voters should take plans with a 'pinch of salt', expert says

Bruce Mountain, head of the Victoria Energy Policy Centre at Victoria University, was scathing about any suggestion such modelling provided any useful information for voters and taxpayers.

"They should take with a pinch of salt claims they hear from anyone about the energy transition and timelines and costs and rates of progress, most particularly for any time in the future more than five years," he said.

"Both the Coalition and the government are pointing to modellers whose answers they like, but really this is not a constructive way to take the debate forward."

Professor Mountain said no other country would fall for this kind of flawed debate.

Much of the future has "everything to do with the local community, social licence and farmers — you only know that when you start to do it", he said.

"This nonsense of hiring a modeller, whether private or government institution, is silly. Leave that for academia, but don't assume this is a useful way to take this forward."

Kenneth Baldwin, one of Australia's leading physicists, says the Coalition's costings raise more questions than they answer, including how a future Dutton government would keep aging coal-fired power stations "open in the face of ongoing maintenance issues, outages during extreme heat events, and in the face of intense competition from solar and wind?"

"By the time the Coalition plans for nuclear power to be operational in the late 2030s, the vast majority of power generation will be solar and wind, which will eat into the business model of both coal and nuclear, particularly in the middle of the day," the Australian National University emeritus professor told the ABC.

"One thing is certain — the very existence of the Coalition's plan will raise the price of electricity simply because it creates policy uncertainty around the type of future investments needed for the energy transition.

"Uncertainty creates risk for investors, and that pushes up the cost of finance for energy projects — which ultimately feeds into higher electricity prices."

Dr Woods said he did not "believe" in either sets of the Coalition's numbers, which compare Labor versus the opposition on both a carbon-compliant future and one in which Australia falls short.

He said the headline difference that the Coalition has turned into media front pages is "due to the fact they've chosen to compare an apple with an orange".

"In their nuclear world, you end up with 8 per cent of nuclear energy in the mix, but it's delivering 38 per cent of production."

"Is that credible? Have we ever seen a nuclear power station run at 90 per cent? Not for very long."

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