Is Angus Taylor really claiming nuclear power will cut power bills by 44 per cent?

Peter Dutton’s opposition is claiming its nuclear energy plan will lower power bills by 44 per cent despite its policy costings stating there had been no analysis of electricity price impacts and experts warning it would raise power bills by at least $665 a year.

Shadow treasurer Angus Taylor said on Wednesday that it was “economics 101” that the opposition’s plan would provide cheaper power to households and businesses.

Opposition Leader Peter Dutton, Coalition energy spokesman Ted O’Brien (left) and Nationals leader David Littleproud launch their nuclear plan in Brisbane last week. Credit: Glenn Hunt

“It will bring down electricity bills by 44 per cent – there’s no doubt about that,” Taylor said on Wednesday. “Prices paid reflect cost underlying costs.”

He was repeating a claim made by Dutton on Tuesday during a visit to the marginal South Australian electorate of Boothby.

“The work of Frontier says that over time, electricity prices will be 44 per cent cheaper under our policy than Labor’s,” he said.

Frontier Economics produced modelling for the Coalition, released last week, that claimed the government’s policy to boost renewables to nearly 100 per cent of electricity generation by 2050 would cost $595 billion – a figure the government has disputed. Frontier’s cost of the opposition’s nuclear plan was $331 billion.

Dutton and Taylor seized on this finding and claimed that “over time”, the 44 per cent cost difference would be mirrored in the price households pay for electricity.

Taylor made the claim at a press conference responding to the government’s mid-year budget forecast. He was asked multiple times by journalists to detail how power prices would be 44 per cent cheaper under the nuclear plan.

Taylor said the underlying cost of the grid, or the total bill for its construction, was the determining factor for customer’s bills.

“Prices and bills paid by customer will reflect those underlying costs,” he said. “That’s how economics works. It’s pretty straightforward, so there’s nothing confusing about this.”

However, experts have raised significant questions about the opposition’s plan, especially as Frontier’s own report said that it had estimated the cost of setting up the power grid and that “electricity prices are not modelled” in its analysis.

The opposition has said that its first nuclear plant would not be completed until 2037, and admitted on Friday that the policy would not cut power bills in the years before plants were up and running. CSIRO’s GenCost report found that the first nuclear plant was unlikely to be built until the early 2040s.

Further, the Institute for Energy Economics and Financial Analysis found that average power bills in Australia would rise $665 to $1200 a year to fund the typical, real-world construction costs of nuclear reactors built recently in other nations.

Frontier’s costings estimate the nuclear plants could be built in line with the construction costs seen in the United Arab Emirates.

Frontier also relied on nuclear plants running almost continuously (90 per cent of the time) to make them economically viable. If plants are used less, they would recoup their relatively high construction costs more slowly.

Analysis by the Smart Energy Council found the opposition’s nuclear reactors would require those with solar panels to use them 67 per cent less often, which it said would add $888 to an average yearly electricity bill.

The economic costings of Dutton’s nuclear energy policy, released last week, revealed the opposition is banking on an electricity grid that would be up to 40 per cent smaller by 2050 than the government’s plan.

The government itself made questionable claims about its energy policy leading into the 2022 election. Launching its renewables policy, Prime Minister Anthony Albanese claimed power bills would fall by $275 a year by 2025. Since then, power bills have soared by hundreds of dollars across the country.

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