Dutton’s nuclear plan a “con job” and a recipe for blackouts, says Bowen

Federal energy and climate minister Chris Bowen has lambasted the federal Coalition’s nuclear power plans, describing them as a recipe for blackouts and a “con job”, and has expressed astonishment at Peter Dutton’s assumption of a grid that will use 40 per cent less power than forecast.

Dutton’s nuclear costings – revealed last Friday – and some of its major assumptions have been widely dismissed, even mocked, by the energy industry, although the proposal has garnered support from some with strong connections to the fossil fuel industry.

The reason for that is the Coalition’s focus on extending the life of the country’s ageing coal fired power generators, increasing the dependence on gas, and the implications for renewables, which will largely be stopped in their tracks, and climate targets, which will be ripped up and ignored.

The Coalition says it can get the first nuclear power plant running by the mid 2030s – a target most in the industry find laughable. But its own modelling confirms that most of the planned 14 GW will not be delivered until the mid 2040s, which means it must run ageing coal generators for another two decades.

“This is a recipe for blackouts and unreliability,” Bowen says in the latest episode of Renew Economy’s weekly Energy Insiders podcast. “Sweating the coal assets for longer, I mean, these coal fired power stations are not getting younger. None of us are.

“Just this week, we’ve had 3.4 gigawatts of coal out in the NEM (National Electricity Market, the main grid) and three gigawatts of that was unplanned, ie breakdowns, unexpected breakdowns, three gigawatts out this week.

“Now, the grid’s coped okay, even though it’s been very hot, but you’d still rather not have three gigawatts out, and that’s only going to get worse the longer you rely on coal.”

Indeed, the Australian Energy Market Operator has made it abundantly clear, and even the coal plant owners agree, that the biggest threat to reliability on the grid is the unplanned and sudden losses of big fossil fuel generators, particularly coal.

Over the last two weeks, AEMO has managed the heatwaves and the multiple outages and has turned to more demand and supply flexibility to help manage the situation, including putting several big batteries on standby – a protocol it is now using when the grid faces demand highs, and demand lows.

It is this focus on flexibility that is undermining the case for existing, let alone new even larger “always on” baseload power stations.

Many analysts say there is simply not enough room in the grid. In a submission released this week, Tesla said there was room for barely 1 GW of “baseload” without severe curtailment of household solar.

The Coalition, however, says it is determined to power on, but its costings have also come under heavy criticism – both on the assumed price and timeline of building new nuclear from a standing start, but also its assumption that electricity demand would fall more than 40 per cent below forecasts.

In the energy world, it is generally assumed that less primary energy will be used in an electrified world. But that’s because inefficient fossil fuel engines and generators (in cars, homes and on the grid) are replaced by more efficient inverter based technologies – wind, solar and battery storage.

That means less energy is needed overall (because around two thirds of energy from fossil fuels is lost as waste heat), but more electricity will produced on the world’s grids. The Coalition modelling shuts its eyes to that evolution, and assumes that electrification does not happen and fossil fuels are still burned in huge quantities.

“I spent a fair bit of time thinking about how they (the Coalition) might try and make nuclear look cheaper, and I’ve got a confession to make,” Bowen tells Energy Insiders.

“Not in my wildest dreams did I suspect that they would just assume we need less electricity. So they’ve said we’re going to need 40% less electricity than AEMO’s Step Change scenario.

“And guess what? Who knew if you make 40% less electricity, it’s roughly 40% cheaper. I mean, who would have figured? I mean, what a con job. We all know that nuclear is the most expensive. They had to find a way of pretending it isn’t.”

On Labor’s own policies, Bowen says that the Capacity Investment Scheme, which released the winners of the first major generation tender last week, is working better than expected, with 6.4 GW of capacity awarded rather than the planned 6 GW, and all representing new projects that have not begun construction.

“It’s working better than I thought it would,” Bowen says.

“And that’s a very encouraging thing. The value and the quality of the projects we’re having coming forward means that we can award more than we were intending.

“No, I won’t be giving tenderers an opportunity to know what our reserve price is. That’s not how an auction works, but (the result) meant that I could also announce for the next round that we’re going to target, in effect, 10 gigawatts, four gigawatts of dispatchable and six gigawatts of generation for tenders three and four.

“That’s huge, and that really means that those projects will get into the planning system faster and the emos connection process faster and help us get to our target.

“The only disappointing thing about this round, from my point of view, was the lack of projects that we could award in Tasmania.

“I want to see more Tasmanian projects come forward, and … we have provided feedback to Tasmanian bidders about that …. we’ve got to ensure that we might get more Tasmanian projects into the future.”

However, Bowen says there is more to do, and he is hopeful – should Labor be re-elected and he remains in the portfolio – to make more reforms.

“We’ve made good progress in the first three years, but not yet good enough, in my view, and you really need a good long stretch in a job like this to, you know, bed down the reforms and make them work properly, and keep the momentum growing going and and learn as you go,” he says.

“Obviously, you know, you just get, you just get more proficient on things like the CIS, etc, as you build the experience collectively in the department.

“I would say the next term … should we get one, as I hope and expect we will, is that it’s a combination of consolidation, so a whole bunch of things that are well underway just need to be bedded down and consolidated, including the CIS, including the new vehicle efficiency standards that … have been in the too hard basket for so long, but don’t actually come in until the first of January.

“So they haven’t had any impact yet, to be honest, but they will. Same with the safeguards reforms, again, big and huge and difficult to do, but it has got to be bedded down and continued with and so there’s so much at stake.

“And then there’s the what’s next? And of course, we’ll go through the process of the 2035 target, the climate change authority advice to sector plans. All that process is underway, but I really see it now as a bit of a continuum.

“Having made good progress in the first two and a half to three years, got to build on it, bed it down, continue it. And it’s just unthinkable to me that we would, you know, having made this good progress, then stop, rip some of it up and go backwards, as the alternative would suggest.”

To hear more from Bowen on those plans and more, you can listen to the full episode here once its published later today.