Cracks appear in Dutton’s nuclear plans as more details emerge about cheap power offer

Australia has been promised that two government-funded nuclear power stations will be operating by the mid-2030s, under Opposition Leader Peter Dutton’s ambitious and uncosted plan to build seven plants by the middle of the century.

But cracks in the proposal have already appeared, as state premiers rejected the idea, some Nationals MPs opposed nuclear power in their seats and conceded it was potentially divisive, while major industry players flagged concerns about huge costs, viability and the timeline for delivery.

Under Dutton’s proposal, announced on Wednesday, seven nuclear facilities would be built on the sites of former coal power plants in Lithgow and the Hunter Valley in NSW, Loy Yang in Victoria’s Latrobe Valley, Tarong and Callide in Queensland, Collie in Western Australia and Port Augusta in South Australia. Dutton said they would all be funded and owned by the federal government and operating by 2050.

According to new details obtained by this masthead, integrated economic development zones near the power plants would be introduced to convince people living near the sites to support the policy.

The economic package would give businesses in those zones a separate and direct connection to the power plant, enabling them to receive heavily discounted electricity. Two per cent of each plant’s electricity would be provided at or near cost price to drive the creation of new industrial zones, which could host energy-intensive smelters, high-tech industries such as data centres, or even defence industries.

Several Liberal Party sources, who asked not to be named so they could discuss future policy announcements, said the Coalition would announce additional policies to increase gas use and drive the uptake of household solar and batteries through subsidies or low- or no-cost loans.

These policies are designed to emphasise the Coalition’s “all of the above” approach to energy policy and counter the impression it is against renewables as it approaches the next election.

Dutton’s announcement ended months of speculation about proposed nuclear sites and sharpened the political debate after the opposition reignited the nation’s climate wars by pledging to dump the government’s target to cut greenhouse gas emissions by 43 per cent of 2005 levels by 2030.

On Wednesday, Dutton said the government had a “renewables-only policy which is not fit for purpose”. But he conceded his policy had not yet been costed. “We will have more to say in relation to the cost in due course, and, as you know, we’ve done this in a step-by-step process. The focus today is on the sites,” Dutton said.

Dutton said a future Coalition government would start by building either small modular reactors – which are not yet in commercial production – or a large-scale reactor. He said the small reactors could be operating by 2035, while the larger would produce electricity by 2037.

That contradicts the CSIRO’s timelines, which have previously found the first nuclear reactors could not be built until 2040 and would cost up to $16 billion each to build in Australia. The CSIRO said construction costs could fall to $8.6 billion but noted the first reactor would likely cost double because of the expense of kick-starting the industry from scratch.

Proposal rejected by state premiers, some Nationals MPs, industry players

The premiers of the states, which have their own bans on nuclear that would need to be overturned, were quick to reject the plan. NSW Premier Chris Minns said he would not remove the state’s nuclear ban, although the state opposition said they were open to it. Victorian Premier Jacinta Allan vowed to fight Dutton’s proposal, while Opposition Leader John Pesutto said his party had no plans to introduce it.

Cracks within the Nationals over the policy appeared as Nationals leader David Littleproud was forced to haul his deputy, Perin Davey, into line. Several of the party’s NSW state MPs also vowed to oppose reactors if their communities objected to them.

Davey on Wednesday said the opposition would not impose a nuclear reactor against a community’s wishes and declared there were no plans to seek alternative sites beyond the seven already identified. “If a community is absolutely adamant, then we will not proceed, but we won’t look beyond these seven sites,” she said.

But Littleproud told the ABC that comment was “not correct, and we made this very clear”. “Peter Dutton and David Littleproud, as part of a Coalition government, are prepared to make the tough decisions in the national interest,” he said.

NSW Bathurst MP Paul Toole said he would campaign against the proposal for a plant at the Mount Piper coal plant in Lithgow. “The announcement lacks detail and raises more questions than answers. I’ll be backing the views of my community 100 per cent.”

NSW Nationals Upper Hunter MP Dave Layzell similarly told the Daily Telegraph he rejected the plan to build a reactor on the Liddell coal plant in his electorate. “I do not accept a federal government decision to lob a facility onto the community of the Upper Hunter,” he said.

In a separate interview, Liberal Senator Jane Hume could not name which of the two Loy Yang power stations would be the site of Victoria’s new plant, and suggested either could be considered when they retire.

Victorian Nationals MP Darren Chester, whose seat of Gippsland includes the Latrobe Valley coal-fired power stations, said the area had some strategic advantages because of existing transmission infrastructure and a skilled workforce. But he cautioned, “more detailed investigations will be required in the years ahead”.

Peter Dutton’s nuclear power plants will be built at seven sites around the country.Credit: Monique Westermann

“I will be listening to locals, consulting the experts, and putting the needs of Gippsland and Latrobe Valley first, and endeavouring to act in the national interest at all times,” he said.

But South Australian Liberal MP Rowan Ramsey, whose seat of Grey includes the town of Port Augusta, welcomed the policy because there would be “a lot of jobs in the build, probably hundreds of jobs over the life of the reactor”.

“There will be an economic zone, and a portion of that power from the reactor will be allocated to the economic zone, and it will be up to [the] community to decide how they use it to attract new industries or businesses,” he said.

The owners of some of the coal plant sites targeted for nuclear development, including AGL, Origin, EnergyAustralia and Alinta, have previously said they have no plans to develop nuclear energy in Australia.

Origin Energy, the largest Australian power and gas supplier, warned that time and cost would be massive issues, while the Australian Industry Group also flagged concerns about cost and the increase in government debt. AGL, the owner of two of the locations earmarked for nuclear reactors, reiterated its warning that the debate risked derailing critical investment in the clean energy transition.

Labor says Dutton’s plan is ‘economic madness’

Prime Minister Anthony Albanese described the Coalition’s nuclear policy as a “fantasy” that markets would not fund because it was 15 years away. “This is a recipe for higher energy prices, for less energy security, less job creation. This is economic madness,” he said on ABC Melbourne.

Energy Minister Chris Bowen accused the opposition of formulating a nuclear policy to boost the life of fossil fuels. “They say they want to pause renewable energy, and that is what this policy is designed to do – to slow or stop renewable energy, to rely on coal for longer as we wait for this nuclear fantasy to come about,” he said.

Illustration: Matt Golding

“The Australian people now have a very clear choice: stick with the plan, or go with this uncosted, un-modelled fantasy that Mr Dutton is proposing today.”

Dutton last week said the Coalition remained committed to net zero emissions by 2050 but would not reveal its interim climate targets until after the federal election, due by May next year.

The opposition leader has mounted a campaign against the Albanese government’s renewable energy plans by arguing that they will drive up power bills and destabilise the grid. On Wednesday, Dutton made an unsubstantiated claim that the federal government’s plans to supercharge renewable energy would cost more than $1 trillion and said nuclear energy would “cost a fraction of that.”

The renewable energy industry rejected Dutton’s claims about the technology, including his assertions that boosting the share of renewables in the grid would increase power prices and the risk of blackouts.

“Australia has no nuclear power industry, so building new reactors would take at least 20 years and cost six times more,” Clean Energy Council chief executive Kane Thornton said. “The Coalition’s nuclear policy is a recipe for delay and skyrocketing energy bills.”

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