Antinuclear

Energy generators poke holes in Dutton’s nuclear plan as questions over costings pile up

‘No one really has the foggiest idea of what it will cost to develop nuclear in Australia,’ one expert says

Peter Hannam Economics correspondent,  Guardian 14th Dec 2024

The Coalition’s nuclear energy plan creates “a significant risk” for the stability of the nation’s grid, according to the peak body representing power generators and retailers.

Responding to the Friday release of modelling by Frontier Economics of the Coalition’s scheme to build seven nuclear power plants from the mid-2030s, the Australian Energy Council warned the estimates assumed a slower build out of renewable energy.

The council’s chief executive, Louisa Kinnear, said they were “particularly concerned about the assumed lack of investment in new and replacement generation over the next 10 years”.

Slowing investment while we assess technologies only available in the future creates a significant risk for the stability of the energy system,” she said.

Frontier Economics, a consultancy, claimed the Coalition’s plan to decarbonise Australia’s main power grid would – at $331bn by 2050 – stand at 44% less than the estimates produced by the Australian Energy Market Operator, thereby saving consumers money. The Albanese government has accepted Aemo’s projections.

“A key issue is the modelling assumes coal remains in the system for longer than asset owners have advised, which could result in reliability issues,” Kinnear said.

“The Coalition’s energy mix and approach would mark a significant departure from the current energy transition trajectory.”

What does Aemo think?

Frontier’s report prompted collective head-scratching in Aemo’s corner.

For one, Aemo’s 2023 June estimates seem to have been converted to 2024 levels using an inflation rate of 8.9%, more than double the 3.8% pace assessed by the Reserve Bank and others.

According to Aemo, there are 45 gigawatts of renewable projects in the pipeline to connect to the national energy market (NEM). By contrast, Frontier only has wind and solar generation capacity rising from 24GW to 46GW by 2051, according to its “nuclear inclusive progressive scenario”.

(Renewables already provide about 40% of the NEM’s power, but according to Frontier’s estimates that share is only projected to increase to 50% by 2051.)

Using Frontier’s progressive scenario, rooftop solar would almost double from about 23GW now to 44.5GW by mid-century. Aemo’s step change scenario, by contrast, had estimated our homes will be accommodating a hefty 110GW of solar by then.

How reliable is economic modelling?

As mortgage-holders can attest, modelling of how soon the Reserve Bank may cut interest rates fluctuates almost on a daily basis. What store to put in numbers for complex energy systems 25 years hence?

Very little. Bruce Mountain, the head of the Victoria Energy Policy Centre, said Frontier’s claims should not “be paid much mind”. Nor, for that matter, should Aemo’s, which provide the present alternative plan supported by the Albanese government.

“No one really has the foggiest idea of what it will cost to develop nuclear in Australia,” Mountain said. “So many things in the production, distribution and consumption of electricity are changing quickly and many of the factors that affect costs and implementation are simply not known.”………………………………………………………

What if companies – or states – say ‘no’?

One challenge for estimating the cost of going nuclear is landing on a price to compensate the companies that own the seven sites chosen by the Coalition to host a reactor.

Six of the seven are private, and none has shown interest in going nuclear, because of the relatively steep cost.

“That implies compulsory acquisition and government coming in over the top of the owners of those sites,” the climate change and energy minister, Chris Bowen, told journalists on Friday, with some relish.

“Robert Menzies should be rolling in his grave at this stuff,” Bowen said. “If the Labor party tried this, the Liberal party would say it’s Venezuelan-style socialism.”

The Australian Energy Council, which represents energy retailers and generators, said the Coalition’s costings “raised questions on the role of the market in an energy system”.

And states that have legislated emissions targets are unlikely to take kindly to a federal government demanding they ignore their own laws………………………………………………………………………………… https://www.theguardian.com/australia-news/2024/dec/14/energy-generators-poke-holes-in-duttons-nuclear-plan-as-questions-over-costings-pile-up

December 26, 2024 - Posted by Christina Macpherson | Uncategorized