Lies, damned lies and Coalition energy economics: Dutton’s latest nuclear claim slammed

Blink and you might have missed it, but Peter Dutton delivered another toe-curling example of energy policy hokum on Sunday morning, as the first guest of the first episode of the ABC’s Insiders program for 2025.

In amongst other well-spun lies – such as the claim Labor’s energy policy requires 28,000km of new transmission to be built – the leader of the federal opposition appeared to say that electricity bills would be 44 per cent cheaper under a Coalition government than under Labor.

How so?

“[Frontier Economics] look[d] at our energy policy compared to Labor’s, they judge[d] that it’s 44 per cent cheaper than Labor’s,” Dutton says.

When Insiders host David Speers points out that the 44% figure – itself hotly contested, as is Frontier’s Economics’ entire approach to modelling nuclear costs for Australia – relates to the cost of building nuclear between now and 2050 and not the power price impact, Dutton fudges further.

“If you’re delivering a model that’s 44% cheaper, that translates into cheaper power prices,” he says.

Pushed on this point, Dutton says, “If you apply the economics, so if there’s a 44% reduction in the model of delivering an energy system, you would expect a 44% reduction, or of that order, being passed through in energy bill relief.”

Pushing once more, Speers says: “But Frontier didn’t tell you that that number, you’re just, you’re just drawing that assumption yourself.”

Dutton: “Again, David, I mean, that’s that’s the economics of it. …All other variables being equal, if you have a 44% reduction in the overall cost to deliver that model, that is going to translate into that price reduction for households and for businesses, and that’s what we must do.”

Happily for Dutton, the discussion switches away from energy at this point, leaving his highly questionable application of “the economics of it” more or less unchallenged.

Unhappily for Dutton, certain energy market experts and actual economists are not having it.

The Smart Energy Council has responded on Monday by publishing the findings of its own analysis and calculations, using – it says – the same assumptions put forward by the federal Coalition and the nuclear policy costings of Frontier Economics. It also uses modelling from the Institute of Energy Economics and Analysis (IEEFA).

This analysis finds that for Australia’s 4 million (and counting) solar homes, power bills would go up more than $1,100 a year under Dutton’s nuclear policy. For non-solar homes, power bills would increase by an average $665 a year – a 30% jump.

The SEC says the hike in energy costs for solar homes of between $1,181 to $2,468 a year would come from lost energy savings, with “always on” nuclear likely to knock out rooftop solar for an average 67% of the year, forcing consumers on to higher nuclear power prices.

For both solar and non-solar homes, part of the jump in energy bills would come from the fact that nuclear power is a more expensive form of generation – as shown in IEEFA’s report, Nuclear in Australia would increase power bills.

The IEEFA report finds that for a nuclear plant with similar costs to those reported for Sizewell C in the UK to be commercially viable in Australia, wholesale energy prices would need to rise by $98 to $168 per megawatt-hour, relative to 2023-24 levels, to enable cost recovery.

This equates to a 74% to 127% rise in wholesale prices, which would see average household power bills across the states in the National Electricity Market increase by between $561 and $961 (with GST), assuming electricity retailers don’t add a margin on top.

“The latest reported cost blow-out for the UK’s proposed Sizewell C nuclear plant further underlines that the Coalition’s proposal to bring nuclear power to Australia is unrealistic,” say the report’s authors, Tristan Edis and Johanna Bowyer.

“Sizewell C’s revised capital cost estimate is about 2.5 times the capital cost used in the Coalition’s modelling.”

And then there are the other, other costs to Dutton’s nuclear policy plan – including the further cost to taxpayers of propping up old coal plants and relying more heavily on expensive gas.

As SEC chief John Grimes put it in a joint press conference with federal energy minister Chris Bowen on Monday, Dutton’s plan to build nuclear is more accurately – for the next decade, at least – a coal keeper, gas booster and renewables stopper program.

“Billions of dollars to go into coal to keep it in the system for as long as possible… [and] a massive scaling up of the amount of fossil gas, the most expensive fuel in the energy system. And a solar stopper program, a cap of 54 percent on renewable energy, solar and wind, by 2050,” Grimes said on Monday.

“Peter Dutton, he has a plan that will double power bills for ordinary Australians. We think that that is outrageous. We’re here today to call it out.

“Mr Dutton is either dangerously ill‑informed or he is lying to the Australian public.

“We know that his plan… will effectively transfer wealth from homeowners to the big fossil fuel companies. Peter Dutton’s plan delivers for his rich fossil fuel mates. But his plan, his power plan, is a big stop in the road, a stop for solar, a stop for wind, a stop for batteries, a stop for EVs, a stop for ordinary Australians slashing their power bills with solar,” Grimes said.

“A stop for the effective transition of our economy and the massive environmental benefits that that delivers, and economic benefits as well.”