“Catastrophic:” Coalition plan to stop renewables and push nuclear will result in massive supply gaps

Federal energy minister Chris Bowen has launched a new attack against the federal Coalition’s nuclear power policy, saying its plan to stop renewables and potentially “sweat” the remaining coal assets could lead to “catastrophic” supply gaps in the electricity market.

The federal government released new modelling on Friday, the same day as another independent report pointed to a $1,000 a year bill hike to consumers from a nuclear power policy, and just days before Coalition leader Peter Dutton is expected to outline more details at a Sydney event.

The Coalition has been vague about its nuclear power plans to date, identifying only seven potential sites for large scale nuclear or small modular reactors, but has said it intends to stop new wind, solar and battery projects, cease the rollout of new transmission lines, and boost coal and gas output.

In response, the federal department of energy has modelled several different scenarios, and both point to massive supply gaps in the future if the Coalition holds firm on its promise to stop renewable, and even “tear up” as some contracts, as National leader David Littleproud has threatened.

The department estimates that the Coalition’s energy plan will leave a “gaping black hole” of between 18 per cent to 49 per cent of unserved energy, ie the gap between supply and demand.

The biggest gap is created on the assumption that private coal operators do close their ageing coal fired generators between now and 2035, and that the Coalition does not build any new utility scale renewables beyond what’s currently committed, and does not support new transmission builds.

On that scenario, the department modelling estimates a shortfall of around 156 terawatt hours (TWh) between demand for energy (around 316 TWh) and available supply (arround 160 TWh).

The second scenario assumes that all coal plants are extended beyond 2040, to allow time for the Coalition to begin construction of its promised nuclear power plant, but that still results in a shortfall of 18 per cent if the Coalition delivers on its promise to stop the rollout of large scale renewables.

“These scenarios are so catastrophic for the economy, for ordinary Australians, and for Australia’s place as an advanced country they seem implausible,” the department report says.

“But that will be the result of the Coalition’s nuclear scheme.”

It’s ironic because the Coalition is pitching its nuclear scheme on three assumptions: That it is lower cost, that it is more reliable, and that it is compatible on a net zero strategy.

But analysis shows that it would fail on all three counts. Multiple reports have highlighted the higher cost of nuclear, and although the Coalition insists there higher costs affect only investors and not consumers (without ever explaining why), the new analysis from IEEFA points to a blow out in retail bills.

The Coalition insists that a reliance on wind and solar will lead to the destruction of industry, but that is proved a nonsense by South Australia, already at more than 70 per cent wind and solar and aiming for net 100 per cent by 2027, and its inability to explain what will be meeting growing demand needs.

“The fact of the matter is that Mr Dutton and Mr Littleproud and Mr O’Brien wander around the country saying that they will pause renewable energy investments,” Bowen told journalists on Friday.

“Even under their own scheme, they admit that we would not have any nuclear power in Australia until 2035 at the earliest, and that is wildly optimistic.

“Now the question that Mr Dutton has to answer is, where will the electricity come from? If we stop building renewables now and nuclear takes so long, as Australia’s electricity needs are increasing every day, where will he get the power from?

“He wanders around making outrageous accusations about black‑outs under this government, when in fact it’s his own scheme which is the biggest risk to reliability in Australia.”

The department report is just one of three released this week that undermines the Coalition’s case for nuclear in Australia. One is the IEEFA report on the impact on bills, and the World Nuclear Industry Status Report on nuclear that shows an industry that is barely advancing, despite the Dutton rhetoric.

And the problem around reliability is further highlighted by issues at Vogtle, the first nuclear power plant to be built in the US for more than three decades. (And despite Coalition claims of a nuclear renaissance, no other nuclear power projects are being built or committed).

One of the two units at Plant Vogtle, a plant that ran way over budget and time in the country with the biggest nuclear fleet of any, was shut down in July, and again in September, due to various valve issues in what critics note is the most expensive power plant on the planet.

The Coalition has been selling nuclear as reliable and “always on”, but like any generation source it can face hiccups, and the bigger the generation unit – the Westinghouse AP1000s at Vogtle (cited as a potential technology choice by the Coalition) have a capacity of 1,117 MW – the more back-up that is required.

And it is these unexpected interruptions, as opposed to the entirely predictable setting of the sun each day, that creates the biggest problems for the market operator.

“I’ve never said the shift to a clean, cheap, renewable energy system would be easy. But it is achievable, and our plan is working,” Bowen wrote in an op-ed in The Australian.

“Supporting new investment in generation and batteries, bringing on offshore wind projects, and underwriting crucial transmission lines through Rewiring the Nation are real policy solutions underway now.

“Last month AEMO confirmed on time delivery of federal, state and territory programs as planned and legislated, will be sufficient to meet demand out to 2035, within the stringent reliability standard.

“Contrast that with the Coalition’s ideological pursuit of its anti-renewable nuclear scheme that leave almost half Australia’s energy needs unserved in the same period.”

The challenge for Labor, however, is not to convince the Australian or even international energy industry of this. The industry understands just how unsuitable the nuclear option is.

But the Coalition, with the often uncritical and sometime active support of mainstream media and most conservative “think tanks”, is seeking only to win a public debate on this, and the public care little about the details.

“They are treating the Australian people like mugs, arrogantly holding the details of their costings, of the modelling, of the impact of their policies on Australians from the Australian people,” Bowen said.