The inclusion of nuclear power in Australia’s energy mix will provide a cheaper means of delivering clean and reliable energy over the long-term future, a new report prepared for the Federal Opposition suggests.

The Opposition Liberal National Coalition has released modelling which it commissioned from economic research firm Frontier Economics.

The modelling claims that the cost of the Coalition’s nuclear energy plan will be cheaper compared with the current approach favoured by the Government based around renewable energy firmed by storage.

In particular, according to the report:

• Under a ‘step change’ scenario as defined by the Australian Energy Market Operator, the inclusion of nuclear energy in the mix will deliver cost savings of 25 percent compared with using renewable energy and storage alone.
• Under a ‘progressive’ scenario, the discount offered by nuclear increases to 44 percent.

The latest report comes as the nation’s energy transition is expected to be a key issue in the Federal Election early next year.

The current Labor Government is pursing a strategy which is geared around an aggressive rollout of new solar and wind energy generation supported by storage (batteries/pumped hydro) and additional transmission to connect new renewable assets to the grid.

The Opposition Liberal/National Coalition, by contrast, is planning for renewables to be supported by seven nuclear power plants that would be constructed on the site of current or former coal power plants. These would deliver 38 percent of Australia’s energy (with renewables delivering a further 54 percent) by 2050.

The latest report contradicts the findings of the latest of the GenCost report published by the nation’s science agency, the CSIRO.

According to that earlier report, renewable energy remains the lowest cost energy generation source for Australia even when costs associated with storage and additional transmission are considered.

Nuclear, it suggests, is the most expensive form of generation.

The CSIRO also indicated that the nation’s first large-scale nuclear plant would take at least fifteen years to complete and would not be ready until at least 2040.

This contradicts Coalition claims that it could have its first plant ready within a decade by 2035 if it wins the election.

This difference is important as the Australian Energy Market Operator expects all of the nation’s coal plants to close by 2038.

In its report, Frontier Economics says that comparisons of generation sources which are commonly undertaken suffer from several drawbacks.

In particular, it says that many commentators simply and erroneously compare the cost of a renewable generator (wind or solar) plus that of back-up generation to the capacity and operating costs of a nuclear power station.

This, it says, does not account for several costs which are associated with renewable energy.

These include:

• the fact that much more renewable capacity is required to produce the same amount of electricity compared to a nuclear power station
• the requirement to store surplus electricity from renewable sources as well as the back-up generation – an important point as an enormous amount of investment required to connect renewable generators located in areas where there is presently no or inadequate transmission network capacity.
• costs associated with additional transmission which is needed to connect new renewable energy assets to the energy grid (note: transmission costs have been included in the CSIRO report referred to above).

“You can’t compare renewable energy and nuclear power generation and costs like apples to apples,” Danny Price, managing director of Frontier Economics says.

“We’ve done the modelling in these AEMO scenarios with a wider, and more detailed, lens on how the two options compare in real life, and the data speaks for itself. In both scenarios, including nuclear power in our energy mix is cheaper – by up to 44% – for Australians in the medium-term future.”

Others, however, have questioned the Frontier Economics approach and claim that it lacks detail on important matters.

Writing in The Conversation, Thomas Longden, Senior Researcher at the Urban Transformations Research Centre in Western Sydney University, said that in his preliminary analysis of the modelling, he had found ‘found key assumptions that differ from other similar analyses, including that from Australia’s premier science organisation, CSIRO’.

Furthermore, Longden noted that the analysis was ‘lacking crucial information about how the figures were calculated’.

This, he said, prevented researchers and the public from understanding the full implications of the Coalition’s policy.

Not surprisingly, the Coalition and Labor differ in their responses to the latest report.

In a statement released last week, the Coalition claimed that Australians would be better off with nuclear energy.

“Frontier Economics’ analysis leaves no doubt: Australians will be better off under our plan,” the statement read.

“We will avoid hidden costs, reduce unnecessary infrastructure expenses, and lead to lower energy prices.

“Labor’s chaotic plan burdens Australians with a system that costs five times more than they were promised. The Coalition’s plan ensures Australians are not overburdened by unnecessary expenses or reckless policies.

“Nuclear energy is at the heart of our plan, providing the “always-on” power needed to back up renewables, stabilise the grid, and keep energy affordable. Advanced economies worldwide are expanding nuclear programs to meet their energy and emissions goals, and Australia must not be left behind.

“Only the Coalition’s energy plan delivers a cheaper, cleaner, and consistent future for Australian households and businesses while protecting our environment and securing the energy Australians rely on.”

Talking on ABC Radio last week, however, Prime Minister Anthony Albanese rubbished the claims about nuclear being cheaper.

“Well, I had a look at some of the fiction that’s out there saying that somehow it would not be the most ridiculously expensive plan ever, will increase bills by twelve hundred dollars,” Albanese said.

“And he’s out there saying that the CSIRO and AEMO, the people who actually run the energy grid, don’t know what they’re talking about.

“We know this is a plan for the 2040s. And in the meantime, I’m not quite sure what he thinks will happen with energy security.

“The truth is that renewables are the cheapest form of new energy. Everyone knows that that’s the case. The science tells us that that’s the case. The economists tell us that that’s the case.”

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