Dutton’s ‘brave’ nuclear bet relies on coal plants. Their owners are concerned

Owners of Australia’s coal power plants say they cannot keep their ageing fossil-fuel electricity generators running long enough for Opposition Leader Peter Dutton to build his planned fleet of nuclear reactors.

The Coalition’s energy policy hinges on the construction of seven nuclear plants on the sites of coal plants located across the country. The first expected would be expected to be switched on by 2037 and the whole fleet completed before 2050.

Mount Piper Power Station near Lithgow would host one of Peter Dutton’s nuclear reactors.Credit: James Brickwood

Long-awaited costings of the policy, released this month, showed that to complete the nuclear plan, the opposition would rely on the nation’s 15 coal-fired power plants staying in operation until nuclear could replace them.

The Australian Energy Council, which represents the nation’s biggest energy companies and coal owners, including AGL, Origin and EnergyAustralia, said the fossil fuel plants were too costly to run and maintain for the decades required by the opposition.

“To assume that a nuclear plant can replace whatever plans members have in place now is a brave [assumption],” said the council’s chief executive Louisa Kinnear.

“There would be some coal plants that could run longer than others into the future, but there is a large proportion that really are going to struggle to get beyond that 2035 date.”

The opposition has declared that baseload power from either a coal or nuclear plant is a crucial part of a “balanced energy mix”, that would also include renewables, batteries and gas.

“You need to maintain a form of always-on, 24/7 baseload power. If it’s not coal, it’s got to be nuclear,” opposition energy spokesman Ted O’Brien said alongside Dutton on December 13 while revealing the policy costings.

The Australian Energy Market Operator, an independent statutory authority, expects 90 per cent of coal plants to be shut down by their owners by 2035.

That is because cheaper electricity from wind and solar farms is undercutting the business model of coal plants, whose owners are responding by bringing forward closure dates to halt their losses.

Coal plant owners – many of them among the nation’s biggest investors in renewables – say “they are certainly not opposed” to nuclear energy in Australia. However, they are worried that the opposition has not announced any measures to ensure coal plants remain economically viable between now and 2035, when Dutton’s first nuclear plant is scheduled to start.

“The assumption that investment can wait until nuclear can enter is quite concerning,” said the Australian Energy Council’s Louisa Kinnear.

“Those coal-fired power stations are likely to come out of the system some time in the mid-2030s, so you really want to ensure that you’ve got capacity in the next five to 10 years … And you can’t wait for a decision on nuclear to do that.”

The opposition’s stance is a contrast to the Albanese government’s plan, which follows the modelling of AEMO and assumes the grid will be 94 per cent renewables by 2050, and includes tens of billions of dollars in public underwriting for clean energy, which it argues is the cheapest form of new electricity supply.

O’Brien emphasises the role of government policy in driving coal plants out of business, arguing that under this scenario “the lights go out and the prices go up”.

While it has committed to keep either coal or nuclear power plants in operation to supply baseload power, the opposition has not detailed how it would prevent their owners from shutting them down.

When asked repeatedly at the costings launch about the AEMO forecast that 90 per cent of coal plants would shut by 2035, O’Brien emphasised his claim that coal or nuclear is needed to lower power bills.

“We are putting the people at the centre and the priority is to get prices down, and that means you cannot close coal plants prematurely,” O’Brien said on October 13.

Clare Savage, chairwoman of the Australian Energy Regulator, another statutory authority, told federal parliament’s nuclear energy inquiry in October that coal plants would not remain viable long enough to build nuclear plants as a replacement.

Savage pointed out that as she spoke, on October 24, 26 per cent of the coal plant was down for maintenance, with more than 10 per cent of the entire fleet shut down due to mechanical failures.

“Coal can’t last until you’d have nuclear power available,” she said.

While the opposition believes it can build its first nuclear reactor by 2037, including a two-year planning window following the federal election that is due by May next year, the CSIRO has said it could not be built before 2040.

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