Dutton to claim nuclear rollout will end up cheaper than renewables

Peter Dutton will claim the Coalition’s nuclear-backed grid will cost less to deliver than Labor’s renewables-led approach, escalating a war over the key cost-of-living issue ahead of next year’s federal election.

The opposition leader will reveal his costings for seven government-backed nuclear plants as soon as next week. This masthead has confirmed the Coalition will claim its energy grid plan – including renewables, gas and nuclear – would cost less than Labor’s.

“It will be significantly less than Labor,” one top Liberal said of the tightly held nuclear costings. Another opposition source suggested the total cost of the Coalition’s energy system rollout would be about $500 billion. The opposition claims Labor’s plan would cost $642 billion.

The opposition has sparred with the CSIRO over the national science agency’s findings that nuclear energy costs more than renewable energy.Credit: iStock

Labor went to the 2022 election with independent modelling showing its energy plan would reduce household power bills by $275 a year by 2025, neutralising Coalition attacks over the cost of renewables. But power bills have gone up by $475 since the last election amid a global inflation crisis, according to the Australian Energy Market Operator, raising questions about the reliability of modelling used by political parties.

Labor is relying on a model from the AEMO, an independent federal agency, saying that it will cost $122 billion to decarbonise the Australian economy by 2050. The Coalition is using a company called Frontier Economics for its figures.

Last month Frontier released calculations arguing Labor was inappropriately using the $122 billion figure, calculated on the present-day value of the energy grid rollout using a standard “discounting” method, to describe the cost of the energy transition over decades.

Frontier and the opposition say the government should be using the $642 billion figure, which the consultancy claims is the real cost over time.

The Coalition has described the difference between these two figures as a black hole.

Climate Change Minister Chris Bowen and Climate Change Authority chairman Matt Kean, a former NSW Liberal treasurer, launched a pre-emptive strike on Thursday to discredit Frontier, whose managing director, Danny Price, has consulted for Coalition figures including Angus Taylor.

“[Coalition energy spokesman] Ted O’Brien might as well have just written the costings himself,” said Kean, pointing out Price’s link to policies such as former prime minister Tony Abbott’s direct action plan, which replaced carbon taxes with financial incentives to reduce emissions.

Price, who is not being paid by the Coalition for the work, hit back at Bowen and Kean, saying their personal attacks “said more about them than me”. He has previously done work for the South Australian Labor government.

“It doesn’t worry me what they think about me and how they want to portray me personally,” he said.

The Coalition’s shadow cabinet has not yet been briefed on the costings, but party sources, who declined to be named in order to speak freely about the tightly held policy, confirmed they would come in below $642 billion. O’Brien’s office declined to comment.

Bowen said the opposition’s “black hole” claim represented an unsubstantiated figure “cooked up for them by Danny Price”.

Credit: Matt Golding

“It’s not a surprise Liberal consultants, who wrote Tony Abbott’s climate policies, have cooked up a different number [to $122 billion],” he said.

The opposition has sparred with the CSIRO over the national science agency’s findings that nuclear energy costs more than renewable energy. Dutton and O’Brien are expected to face a fresh round of questioning once their modelling is released about the Coalition’s ambitions to have nuclear plants up and running by next decade.

Bruce Mountain, director of the Victoria Energy Policy Centre, said AEMO was fairly criticised for using only present-day dollar calculations, which he said could be “twisted” to make the long-term cost of the transition look smaller.

“The cost being paid in the economy is the cost going out the door when it goes out the door,” he said.

“By not properly stating the real cashflows going out the door, they haven’t given the media and public the freedom to properly understand the real cost.”

However, Mountain noted that Frontier was “perceived in some quarters to be partisan”.

O’Brien said on Thursday: “Chris Bowen has told the Australian people it will cost $122 billion. In fact, it’s going to cost $642 billion … Why have [Prime Minister] Anthony Albanese and Chris Bowen been lying to the Australian people for over 2½ years?”

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