Too old, too expensive: Coal can’t wait for nuclear, says energy regulator

Australia’s top independent energy officials are warning the nation’s fleet of coal power plants is too old and costly to keep running until Opposition Leader Peter Dutton’s proposed nuclear reactors are ready to replace them.

A high-stakes parliamentary inquiry began on Thursday with witnesses from national energy agencies and nuclear authorities. It was launched to expose flaws in the opposition’s nuclear policy, but has the potential to backfire as the Coalition challenges the costs of the government’s ambitious renewable energy rollout.

The opposition has dubbed its energy election pitch a “coal-to-nuclear plan”, which would cut short the government’s renewables rollout and establish seven emissions-free nuclear plants across the country from 2035 to help the nation reach net zero by 2050.

However, Australian Energy Regulator chair Clare Savage, who heads the agency that develops the regulations for the electricity market, raised a hurdle for the opposition when she said Australia would only be ready to start building nuclear plants by the time coal plants have all but disappeared.

“We cannot keep the current coal fleet running long enough for nuclear to be here,” Savage told the hearing.

The timeline for a nuclear fleet is a crucial issue because Australia’s coal-fired power plants, which supply upwards of 50 per cent of power in the electricity grid, must be replaced by 2035.

A federal parliamentary inquiry has been staged by the government to attack the opposition’s nuclear policy, but it also poses a risk.Credit: Getty Images/iStockphoto

Coal plants are bringing forward closure dates as ageing equipment becomes less reliable and less competitive against cheaper renewables. The Australian Energy Market Operator expects 90 per cent of them to shut within 10 years.

Under the Albanese government’s plan, renewables will replace coal under its goal to raise the share of electricity from wind, solar and batteries to 82 per cent of the grid by 2030.

The opposition has said that coal plants should not shut “prematurely”, and it plans to start bringing the first nuclear plant online by 2037 and completing its rollout of six more before 2050.

Savage said that based on her experience, it would take eight to 10 years to establish the rules needed to govern nuclear power before construction could begin.

The Australian Nuclear Science and Technology Organisation (ANSTO) said it could take about 10 years to build the first reactor in Australia after industry regulations have been established.

Savage said it had taken four years to develop a more modest set of rules to govern the Underwriting New Generation Investment scheme, created by the former Morrison government and the Australian Energy Market Commission said it had taken six years for rules around electronic smart meters for peoples homes.

Opposition energy spokesman Ted O’Brien said that Australia already had many of the rules needed to govern nuclear energy, which were established with ANSTO.

Gippsland MP Darren Chester, whose electorate has been slated to host a nuclear plant in the Latrobe Valley, questioned Savage’s timeline and argued that “World War Two was fought and won in six years”.

However, nuclear power is currently outlawed in state and federal laws and Savage said it would take many years to overcome this hurdle and establish inter-jurisdictional regimes.

O’Brien, when questioned after the hearings about how long coal plants would need to keep running under the opposition’s nuclear plan, said: “The Coalition believes: one, we should not be closing our base load power stations prematurely; two, we should be pouring more gas into the system, and; three, we need to continue with rolling out renewables.”

O’Brien has said the grid needs a “balanced energy mix” but has not stated how much of the grid would be comprised of each power source under a Coalition government, even as the Nationals call for a halt to the rollout of renewables.

He questioned the Australian Energy Market Operator during the inquiry over its $130 billion forecast for the cost of transforming the grid to a renewables-dominated system by 2050.

The organisation’s chief Daniel Westerman confirmed that this figure did not include a number of major new projects already underway, like the $12 billion Snowy 2.0 pumped hydro project, which could add significant costs to the bill.

“What we need to see is the total system cost. The market operator could not confirm that today but it could confirm that tens of billions of dollars have not been included in their calculation,” O’Brien said.

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