$62bn black hole in Labor energy plan

A $60bn black hole in Chris Bowen’s energy plan has been exposed by energy experts and the Coalition

Climate Change and Energy Minister Chris Bowen has hosed down claims of a $60bn energy blackhole, accusing opposition energy spokesman Ted O’Brien of thinking he is a ‘better energy analyst than AEMO and CSIRO’. Picture: Martin Ollman / NCA NewsWire

A vast black hole in the federal government’s energy plan has been exposed by industry experts and the Coalition, who say Labor’s renewables blueprint fails to ­account for more than $60bn in mega energy projects it has committed to build by 2030.

According to new analysis conducted by Australian Resources Development executive director David Carland, Labor has failed to bake in $62bn in budgetary spending required to lift renewables from 20 per cent of the nation’s energy production to the government’s stated 56 per cent target.

The new figure comes after Mr Carland wrote to both Energy Minister Chris Bowen and the CSIRO GenCost review – which underpins the government’s renewable energy targets – raising questions over the cost to integrate Australia’s energy system by 2030, including transmission, batteries and gas peaking plants.

Mr Carland’s figures estimate that a range of projects – including Snowy 2.0, Tasmania’s “battery of the nation” plan and various transmission expansion projects — would be significantly more expensive if they were costed correctly, taking into account annual government subsidies and projected cost escalations and delays.

The analysis comes as Anthony Albanese comes under ­significant pressure to reach his 82 per cent renewables target by 2030 despite a number of major energy projects being delayed, including Snowy 2.0 and the Kurri Kurri gas plant.

Opposition energy spokesman Ted O’Brien used the analysis to attack Mr Bowen for misrepresenting the GenCost review, which the Energy Minister has used to support his claim of renewables being the cheapest form of energy.

“Labor is either wilfully lying to the Australian people about the true cost of its transition or it has absolutely no idea how Australia’s energy system operates. It’s time for an honest debate about the true cost of Labor’s radical energy experiment,” Mr O’Brien said.

“Renowned energy experts have revealed that Chris Bowen has purposefully buried a $60bn black hole in its energy plan that … Australians will ultimately pay for through higher energy bills.

“The network costs associated with connecting Australian homes with the solar, wind or gas generators does not simply vanish because Labor wants it to.”

Coalition analysis obtained by The Australian suggests the failure to account for $62bn in necessary spending equates to about $5626 in extra costs per household.

But Mr Bowen hosed down the new figures, telling The Australian “Mr O’Brien may think he is a better energy analyst than AEMO and the CSIRO, but he isn’t.”

In a submission to Treasury earlier this year, Mr Carland warned the GenCost report failed to take into account the cost of ­integrating renewables above the 56 per cent renewable share of generation by 2030 assumed in CSIRO’s model. He said the report relied on the flawed assumption firming had already taken place, treating future spending on renewables as a sunk cost even ­before spending had occurred.

The energy economist argued CSIRO’s analysis excluded this expenditure from the total cost of renewables, allowing Mr Bowen to claim that renewables are the cheapest form of energy.

He told The Australian the government had failed to take into ­account an additional $62bn of capital required to lift renewables’ share of energy generation from its current level of about 20 per cent to 56 per cent by 2030.

His estimates suggest the costs would be much higher.