Biggest losers from Coalition’s nuclear plan will be Australia’s 4 million solar households, industry says

Introducing nuclear power into Australia’s energy mix would be a disaster for the climate and for electricity prices and for renewable energy investors – but the biggest loser would likely be Australia’s four million-and-counting solar households.

Reactions to the release of the Coalition’s long awaited nuclear power policy costings have flooded Renew Economy’s inbox on Friday, ranging from disbelief and astonishment to anger, frustration and dismay.

“Promising Australians a doubling of their power bills in a cost of living crisis is the worst Christmas present ever,” Smart Energy Council chief John Grimes said.

“In the lead up to Christmas, the Liberal and National Parties are threatening to cancel an industry that employs over 40,000 Australians,” he said.

“Mr Dutton is proposing to slam the brakes on solar and renewables by halting clean energy generation at 54 per cent of our power mix, even though we’re already at 40%, and will be at 50% within two years.”

Grimes’ biggest concern is for the renewable energy installed on household rooftops, with recent analysis from the Smart Energy Council suggesting Dutton’s plan to push 6.6 gigawatts of “always on” nuclear energy into the grid would displace the equivalent solar generation of between 1.8 – 2.9 million homes.

“To create space for inflexible nuclear power plants ramming energy into the grid, millions of household solar systems will be the first casualty,” Grimes said in September when the analysis was released, noting that solar is already being switched off in South Australia when it exceeds demand.

“Nuclear reactors cannot be switched off, meaning they continue forcing power into the grid even when solar is literally producing free electricity for 4 million Australians,” he added on Friday.

“Nuclear and solar do not mix, and it will be Australians who have to pay the price for that.”

The Smart Energy Council has also slammed the Coalition’s costings of its nuclear plans, describing every single line as contestable.

“The renewable energy transition will cost a fraction of the real world cost of nuclear, is largely being paid for by private capital, and is forming the cheapest, cleanest and most reliable power grid,” Grimes says.

“The renewable energy transition will cost a fraction of the real world cost of nuclear, is largely being paid for by private capital, and is forming the cheapest, cleanest and most reliable power grid.”

It’s a common criticism.

“Peter Dutton’s nuclear numbers have more holes than Swiss cheese, leaving out big ticket items like the costs of dealing with radioactive waste,” says the Climate Council CEO Amanda McKenzie.

Nicki Hutley, Climate Councillor and esteemed economist, said on Friday that it was “shocking” to see the the LNP “knowingly mislead Australians on the true costs of nuclear.”

“If we’re going to debate the economics of energy it must be based on real-world evidence–not dodgy modelling that obscures the real price tag.”

“Nuclear doesn’t add up for Australia. …International experience has proven that nuclear is a financial black hole, with the average project costing more than double its original estimate, and projects like the UK’s Hinkley Point C costing triple. We’re already seeing renewables deliver power faster and at lower cost today.”

Clean Energy Council chief Kane Thornton says Dutton’s plan will cap renewable energy at 54 per cent by 2050, despite the nation being on track to hit 48 per cent by the end of next year.

“This new target would represent a dramatic slowdown in the installation and investment of renewable energy across Australia and will be a massive shock and concern to investors who have invested $40 billion into large-sale renewable energy in Australia since 2020,” Thornton said on Friday.

“A nuclear-powered energy grid would also be a disaster for the four million Australian homes that have already installed a rooftop solar system as a way to lower their power bills. These systems would have to be switched off regularly if Australia was to move to inflexible nuclear power.”

“This would be absurd, forcing the cheapest form of generation on people’s homes to turn off so that the most expensive could continue to operate around the clock,” Thornton said.

Guillame Roger, an Associate Professor of Economics at Monash University, says the Coalition’s plan “objectively hovers between fantasy and hopeful naivete.”

“First, SMR do NOT exist today. There is not even a prototype of them. So we have absolutely no idea what they really cost. Second, the cost figures are hopelessly understated.

“The last nuclear plant built in the Western world today (Flamanville 3 in France) is 10 billion Euros over budget (at 13.2 billion euros, so A$20 billion total) and 12 years behind schedule; construction started in 2007.

“There is no mention of the maintenance costs of these nuclear plants. The refurbishment cost of the nuclear fleet in France (58 units) is estimated to cost 50 billion Euros over a decade (over A$75 billion), and is likely an understatement.

“Last, there is no actual model of the interaction of nuclear baseload and renewables in the wholesale market. Nuclear is even more rigid in its operation than coal.

“Today we routinely see negative prices in the NEM when renewables produce. Old coal-fired power plants that are already written off eat these intraday losses. But how will nuclear pay for itself then?,” Roger asks.

John Quiggan, a professor of economics at the University of Queensland, says the nuclear part of Dutton’s energy strategy is just a distraction, and will probably never be built.

“What matters is the disastrous decision to abandon our Paris commitments, keep coal going as long as possible and then rely on gas. A Dutton government can and will take immediate steps to implement this decision,” Quiggan says.

Associate Professor Roger Dargaville from Monash University says the biggest flaw in the coalition’s is that it completely fails in the primary objective to reduce carbon emissions quickly.

“For nuclear to be part of the mix, coal-fired generators need to be kept going well beyond their current scheduled shut down timetable, resulting in carbon emissions for the electricity sector way above the target set by the current government (i.e. 82% renewables by 2030),” Dargaville said on Friday.

“To meet Australia’s UNFCCC Paris commitments, the electricity sector must do most of the heavy lifting in the next decade while transport and industry will take longer to decarbonise.

“The plan presented by the coalition fails to acknowledge this simple fact, and therefore any costings which it comes up with are not a relevant or useful comparison.”

The Queensland Conservation Council says its concern is the impact on industry, regional communities and solar households in the state.

“Queensland industry is already turning to renewable energy backed by storage to remain globally competitive. Rio Tinto is tendering for firmed renewables to power their Gladstone smelter,” said QCC deputy director Anthony Gough.

“This nuclear fantasy is designed to delay the renewable roll out, and in doing so it could devastate regional communities if industry closes shop because they can’t access the affordable clean energy they need now. 

“Our research found that just building one nuclear power plant in Queensland would mean we have to switch off 45,000 rooftop solar systems every day to make room in the grid.”