Dutton’s nuclear plan stops decarbonisation, punishes consumers and hurts the economy

Achieving net zero by 2050 is non-negotiable. Australia and our global partners have agreed to targets that limit warming and maximise the chance to avoid the worst impacts of climate change, such as more natural disasters, rising sea levels, and species and habitat loss.

But the pathway to decarbonisation matters too. Cutting greenhouse gas emissions as far and fast as possible now can reduce the amount of temperature rise experienced in the years ahead and help curb the risks to our economy, communities and way of life.

Liberal leader Peter Dutton wants nuclear power to be part of Australia’s energy mix.Credit: Monique Westermann

That’s one reason why accelerating work to create a new electricity network built on renewables such as wind and solar – backed by storage, firming and peaking gas – is essential.

It’s the biggest abatement opportunity available in the short term and the most cost-effective form of new energy generation needed to underpin progress on decarbonisation across the rest of the economy. And the race to pull forward investment in renewable energy generation is on because the owners of existing coal-fired power stations have begun to close them.

The first shutdown occurred at Lake Munmorah, NSW, in 2012, and more have since exited the system. It’s now expected that 90 per cent of the existing coal-fired generation capacity will depart the system by 2035.

Against this backdrop, the Climate Change Authority will undertake analysis of the Coalition’s
nuclear proposal. We want to give the Australian people an economic and science-based
understanding of the impacts on the grid, the climate and their energy bills. But at first glance,
Peter Dutton’s nuclear policy stops decarbonisation, blows the carbon budget, punishes
consumers and harms the economy.

Under any scenario contemplated, Australia will be more dependent on coal-fired power stations for longer. The CSIRO says the best case for delivery of a single new nuclear facility in Australia is 15 years. And that assumes the legislative, regulatory, workforce and other issues can be resolved – and the cost blowouts and time delays witnessed overseas aren’t repeated.

Yet to replace all of Australia’s confirmed retiring generation capacity with nuclear as a zero-emission alternative would require deploying at least 15 to 17 large-scale nuclear facilities, or more than 50 proposed small modular reactors, by 2040. In the meantime, Australia will need to depend on coal-fired power that is increasingly unreliable and the cause of price spikes and blackouts. It would be strange to subsidise the ongoing operation of plants that can’t be guaranteed to actually keep the lights on.

It also compounds the challenge of reducing our emissions in the short and long term. Relying primarily on electricity from fossil fuels for longer would also delay necessary and achievable cuts to emissions in other sectors such as transport and industry, which depend on the availability of zero emission energy for their own decarbonisation pathways

The authority has calculated that for every percentage point that Australia falls short of achieving 82 per cent by renewables by 2030, about 2 million tonnes of harmful emissions will be added to the atmosphere.

The other element the authority will consider is cost – to the economy, taxpayers and consumers. For example, the proposal doesn’t just appear to slow decarbonisation, but the economy too. Some initial forecasts have already suggested it assumes an economy 40 per cent smaller than the alternative.

Assuming there will be far less demand for electricity means assuming far fewer Australians take up EVs or electrify their homes. It means assuming fewer industrial and manufacturing businesses switch to efficient, electric production processes.

The sensitivities are heightened given the proposal involves taxpayers funding nuclear power stations, which risks sending private investment now attracted to renewables offshore in pursuit of better returns.

The CSIRO, AEMO and the authority have all also made the point – a system built on renewables will lead to lower power prices for households and businesses compared with nuclear. It would take an astonishing leap of faith to suggest otherwise, but the modelling published last week in support of nuclear seemed to take that path.

The debate over Australia’s energy transition should be based on sober analysis, rooted in economics and engineering. It’s why markets, scientists and experts keep defaulting to a system based on renewables.

Alternatives that place faith in a technology that does not exist in Australia, risks slowing our economy, undermining energy security and stalling our bid to reduce emissions deserve scrutiny. That’s what the Climate Change Authority will do.

Matt Kean is chair of the Climate Change Authority. He previously served as a NSW minister for energy.

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