Winter blackout fears focus attention on energy policy

The depth of Australia’s energy crisis is hitting home, on two fronts. After years of bad gas policy in Victoria, the state’s Lochard Energy Iona gas storage facility could run out of supply before the end of winter, with more than two months to go. Blackout fears have arisen after supply disruptions and a winter cold snap triggered a run on reserves. And one of the nation’s biggest manufacturers and gas users, Orica, a major supplier of explosives to the mining industry, has warned that uncertainty over gas supplies and prices could force it to cut production and jobs at a major plant.

The company faces a decision over cutting production and jobs at its Newcastle plant unless the domestic gas market improves. Orica has said it may be forced to switch to an import model for its Kooragang Island manufacturing plant in Newcastle in 2026 if not enough supplies of affordable gas are available. Power generated by wind turbines is reportedly at a five-year low.

Beyond the immediate concerns, as the political battle rages over the Coalition’s nuclear energy policy and the Albanese government’s renewables plan, more facts are emerging. Australians’ future economy five, 10 and 25 years from now will largely depend on what is decided in the next year.

Figures are emerging about the cost of nuclear power versus renewables, or both, supplemented by gas. On Sunday, the Coalition did not dismiss Environment Minister Tanya Plibersek’s estimate that the opposition’s plan to build seven nuclear reactors would cost $387bn, a figure previously given by Energy Minister Chris Bowen. Nationals leader David Littleproud said the figure given by Labor would be “a fraction of what their plan by 2030 of 82 per cent renewables would cost, it’s $1.5 trillion, and that’s Net Zero Australia, who’s articulating those numbers”, he said. Beyond 2030, the cost of renewables would run to $7 trillion to $9 trillion by 2060. “We want to leave a legacy that just doesn’t last for 15 to 20 years, which is what a turbine or solar panel might last, or even a battery,” Mr Littleproud said. “We want something to last 80 to 100 years … that will build baseload power into our grid.” The weakness of that argument is that the seven nuclear reactors proposed by the Coalition, to power the grid from 2037, would also require a heavy investment in renewables. Perry Williams reports that according to the Smart Energy Council, the Coalition’s nuclear plan would supply only 3.7 per cent of Australia’s energy mix in 2050. Building seven reactors would cost at least $116bn based on CSIRO data and the Australian Energy Market Operator’s Integrated System Plan, and possibly $600bn, the council said.

The Smart Energy Council styles itself as the independent body for the smart energy industry – from the sun, wind, oceans and waste; players with much to lose if nuclear power became a big part of the mix.

Opposition energy spokesman Ted O’Brien said on Sunday that the Coalition would go to the election without detailing the exact generation capacity, down to the gigawatt, of the seven nuclear power plants it plans across five states but, he emphasised, each of those sites could host multiple reactors, lowering the cost. “One of the lessons we learned from overseas, in order to get prices down, you need multi-unit sites,” he told the ABC. “When you talk about a nuclear plant, these are modularised compartments. You can add another 300 megawatt reactors.”

In addition to cost, the likely impact of solar panels, wind turbines and high-voltage towers connecting energy across renewable energy zones such as New England and the Illawarra, set out by Christine Middap on Saturday, must be scrutinised. Likewise the issue of how and where they will be disposed of after their use-by dates. Mr Bowen has forecast that 40 wind turbines need installing every month for the next six years, and 22,000 solar panels every day. Too many serious issues are at stake to treat the debate as a sledging match. Voters expect mature, intelligent insights.