Dutton defends nuclear costings as opponents warn of power bill hit

Opposition Leader Peter Dutton has claimed his nuclear energy policy would cut power bills by 44 per cent, but analysis by the renewables sector warns it could actually drive up electricity costs by more than $1000 a year for millions of Australians with rooftop solar panels.

Ahead of an election that will be dominated by cost-of-living issues, Dutton said while it would take time for energy prices to fall under his $331 billion plan to build seven government nuclear plants, they would ultimately drive down costs for consumers and business owners.

Peter Dutton says nuclear power will bring down prices by 44 per cent, but new analysis argues it could add more than $1000 to the power bills of people with rooftop solar.Credit: AP

Modelling commissioned by the Coalition for its plan to build the reactors by the mid-2040s asserts total costs will be 44 per cent lower compared to the mass rollout of renewables. The same modelling did not estimate a reduction in retail power prices.

But Dutton told the ABC’s Insiders program on Sunday it was “economics” that lower construction and production costs would lead to a large drop in prices paid by consumers.

“That’s the economics of it. All other variables being equal, if you have a 44 per cent reduction in the overall cost to deliver that model, that is going to translate into that price reduction for households and for businesses, and that’s what we must do,” he said.

“You would expect a 44 per cent reduction or of that order being passed through in energy bill relief.”

The modelling, however, has come under fire for its underlying assumptions, including an effective lid on the amount of renewable energy. Renewable energy under the Coalition’s modelling reaches 54 per cent of the total power market by 2050. By the end of last year, it had already hit 46 per cent.

Research to be released on Monday by the Smart Energy Council warns that millions of rooftop solar systems would have to shut off every day to allow the baseload power generated by nuclear reactors to fit into the grid.

It found that non-solar households could pay an extra $665 a year in power prices, while for those with rooftop solar, the bill shock could be more than $1000. Rooftop solar households were forecast to pay an extra $1262 a year in NSW, $1108 in Victoria and $1419 in south-east Queensland.

The higher costs to the more than 4 million rooftop solar households were in part because they would be blocked from feeding power into the energy market, the council said. As nuclear needed to be run constantly, if there was too much energy in the market, the first to be turned off would be rooftop solar, which was the easiest to prevent competing against nuclear.

Smart Energy Council chief executive John Grimes said every person who had invested in rooftop solar would pay far more for their energy if expensive nuclear power was forced into the grid.

“Peter Dutton wants to force millions of Australians to switch off the solar they bought, make them pay for more expensive nuclear power, and use their taxes to build nuclear reactors,” he said.

“We know that power bills are going to soar for all Australians because Peter Dutton wants to cap cheap, clean renewable energy and substitute it with expensive, unreliable, polluting coal and gas, while we wait a couple of decades to build their nuclear fantasies.”

The battle over electricity prices is part of a broader debate over the size of government, with Dutton accusing Prime Minister Anthony Albanese of overseeing a $347 billion increase in spending and a 36,000 lift in public servants.

Smart Energy Council chief John Grimes says millions of people would be worse off under the Coalition’s nuclear policy plan.Credit: Alex Ellinghausen

By the end of this financial year, government spending is expected to be $101.5 billion higher than was forecast in the March 2022-23 federal budget.

Dutton said there was “a correlation between a bloated public service and a lack of productivity”, adding that he would not allow the bureaucracy to balloon further.

Pressed on where he would cut spending, Dutton ruled out an audit but signalled that voters would have to wait until after the election to get final details.

“We need to sit down and look through an ERC [expenditure review committee] process, which would be the normal course of things. We’ll do that in government,” he said.

Treasurer Jim Chalmers said part of the increase in spending and public servants included the indexation of the aged pension and extra resources to the Veterans’ Affairs Department, Medicare and to lift housing construction.

He accused Dutton of trying to hide his planned cuts because he knew people would not support them.

“It is extraordinary that he’s saying to the Australian people he wants to cut $350 billion, but they will have to wait until after the election before he would tell them what that is,” he said.

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