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Does the Coalition’s case for nuclear power stack up? We factcheck seven key claims | Energy

PoliticsDoes the Coalition’s case for nuclear power stack up? We factcheck seven key claims | Energy

The Coalition has made a range of claims about what nuclear energy could do for Australia, and why it is better than building solar and wind.

What is the reality? We factcheck the key claims.

Would nuclear power provide cheaper electricity?

No evidence – such as economic modelling – has been produced to back up opposition leader Peter Dutton’s main argument about nuclear energy: that it would make Australians’ electricity bills cheaper than under a renewable energy-run grid and bring down other costs. As things stand, it is a baseless claim.

The CSIRO and the Australian Energy Market Operator (Aemo) have assessed the cost of different electricity sources and found that solar and wind backed by storage energy, new transmission lines and other “firming” – what the country is building now, in other words – were the cheapest option.

They found nuclear generation would be significantly more expensive – the most expensive technology available – for consumers. They suggested Australia’s first large-scale nuclear power plant (1GW capacity) could cost about $17bn, not counting finance costs. If a nuclear industry was established, that might eventually drop to $8.6bn.

Small modular nuclear reactors (SMRs), a developing technology that the Coalition has suggested could be used in South Australia and Western Australia, are likely to be far more expensive again. They do not exist anywhere on a commercial basis. The leading proposal for an SMR in the US was last year cancelled due to rising cost.

Confronted with this, the Coalition argues the nuclear experience in Ontario, Canada, demonstrates that nuclear energy is cheaper than Australian renewable energy.

This is not a relevant comparison. Like France, Ontario runs on nuclear plants built decades ago. Construction costs in the 1980s tell us nothing about the costs in the 2030s and 2040s.

Even then, the claim electricity is cheaper in Ontario is misleading. Wholesale electricity prices – the only part of the bill that is affected by the cost of generation – in Ontario are actually higher than the cost of new firmed renewable energy in Victoria and Queensland.

A more relevant comparison may be the ongoing construction of the large Hinkley C generator in the UK. It was initially expected to open in 2017 and cost about A$34bn. That has now been pushed out to 2031, and up to A$89bn.

Will using more gas until nuclear comes online cut costs?

There is no evidence it will.

Gas is the most expensive form of electricity generation currently used in the National Electricity Market, connecting the five eastern states and the ACT.

The price of gas is set on the international market – what fossil fuel companies can get by selling the gas in Asia. Nearly all Australian gas is exported. Opening a couple of new gas fields is not likely to materially change this.

Currently, gas is used in “peaking” plants that are turned on only when needed, at times of high demand. This is expected to continue for at least the next couple of decades. Gas-fired power provided less than 5% of total generation last year.

The Coalition has not explained how it would get more gas into the electricity grid. Would taxpayers pay to build several new gas power plants? It has also not explained how the resulting power could be as cheap as renewable energy.

Will the Coalition’s plan be ‘cleaner’, as it claims?

No. Using more gas, less renewable energy and extending the life of coal-fired power plants will increase Australia’s greenhouse gas emissions.

The Coalition admits this. It wants to abandon the country’s 2030 emissions target and allow significantly more heat-trapping pollution while arguing it is still committed to net zero by 2050.

Liddell power station in the Hunter Valley
Liddell power station in the Hunter Valley, NSW. Outages at ageing coal power plants have been attributed to increasing wholesale electricity costs in Australia last year. Photograph: Mark Baker/AP

Could Australia have nuclear energy by 2035?

Again, no evidence has been released to explain how this would be possible. The experience in developed democracies internationally is that it would take much longer.

The Coalition says if it decided to build SMRs there could be “two establishment projects” in place by 2035. If it opts for large-scale plants it says first power would be in 2037.

CSIRO found an initial nuclear power plant of any size would not be possible until after 2040. Other analysts, including the pro-nuclear Blueprint Institute, agree.

That’s just the technology challenge. The Coalition would also have to get legislation through both houses of federal parliament to overturn a nuclear energy ban. Labor and most of the crossbench oppose lifting the ban, and the Coalition is 20 seats short of a majority in the lower house and hasn’t had a majority in the Senate since 2007.

It would also need to persuade three states that ban nuclear energy – and remain strongly committed to their current position – to change their laws.

Should Australia go nuclear? Why Peter Dutton’s plan could be an atomic failure – video

Have renewables caused a big increase in power bills?

No. It has a much smaller effect than factors related to fossil fuels.

Tony Wood, the energy and climate change program director for the Grattan Institute, says there was a 20% jump in wholesale electricity costs last year for four reasons: the war in Ukraine pushing up the price of gas; gas shortages; outages at ageing coal power plants reducing competition; and extreme weather causing flooding at coalmines. Prices have since started to come back down.

The renewable energy in the system has a smaller effect on price as the cost of incentive schemes is passed on, but it also helps reduce costs by increasing capacity and competition in the power grid.

The coal-fired power plants in the grid are ageing, increasingly have units offline and need to be replaced. Evidence from government agencies and most independent experts is that renewable energy plus firming is the best path to an affordable, reliable, clean grid.

Is it true that “Labor can’t keep the lights on today”?

No. The lights are still on.

Coalition MPs making this claim were referring to the findings of Aemo’s “electricity statement of opportunities” report, which was portrayed as warning blackouts were imminent.

This misrepresents what the statement does. It is a message to the industry about how much more generation will be needed over time. This year’s statement found there could be reliability gaps in New South Wales, Queensland, South Australia and Victoria unless there was faster deployment of renewable energy and batteries.

This is consistent with other warnings that investment has slowed and needs to accelerate. But Aemo did not say blackouts were inevitable, or that renewable energy would cause them.

Is it true that you can’t run an industrial economy on renewables?

No – again, based on evidence from experts and industry.

The energy and economic transformation is challenging whatever technology is used. But the electrons are the same, regardless of the source.

Industry leaders have repeatedly welcomed renewable energy investment. Rio Tinto this year signed what it called Australia’s largest renewable energy power purchase agreement to run its operations in Gladstone.

BlueScope Steel applauded the creation of an offshore windfarm zone in the Illawarra, saying it had the “potential to supply significant quantities of renewable energy to help underpin BlueScope’s decarbonisation of iron and steelmaking in Australia”.

Aemo has repeatedly found an optimal future power grid, including one that would power new green industries, would run on more than 90% renewable energy.

Other countries, including those with some nuclear power, have similar goals. Both the US and Germany are targeting 80% renewable energy by 2030.

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