Net Zero Australia predicts that the capital costs for the renewable transition in the country will amount to $9 trillion by 2050 and $1.5 trillion by the end of the decade. However, Australian Energy Minister Chris Bowen has criticized these figures, claiming that the cost of implementing nuclear power in Australia would be $387 billion. He argues that the Opposition’s position is not to provide nuclear power for free, but rather to include it in the energy mix and let operators decide whether to build nuclear power stations. Bowen estimates the cost of replacing 21.3 GW with small modular reactors, but this would be an investment repaid by consumers in the form of lower power bills.
There are some issues with Bowen’s figures, as he relies on the government science agency CSIRO’s GenCost report, which has been criticized for its lack of credibility in the energy sector. Bowen uses a capital cost of $18,167 per kW for nuclear power, while the Energy Information Agency in the US estimates a cost of $9,525 per kW for small modular reactors. Additionally, Bowen’s capacity factors for nuclear power are lower than the industry average. The lower capacity factor used in the cost estimates inflates the cost of nuclear electricity.
The situation becomes more complicated when considering the estimates provided by Net Zero Australia, an organization supported by various universities, consultancy firms, and climate change advocacy groups. They predict that the capital costs for achieving net-zero emissions will be $1.5 trillion by the end of the decade and $9 trillion by 2050, excluding the use of nuclear power. Their estimates take into account the necessary storage and redundancies for renewable energy sources, which can be costly. In contrast, CSIRO’s estimates for the Levelised Cost of Electricity (LCOE) of renewables are significantly lower, as the agency downplays certain costs and treats others as sunk costs.
Bowen’s failure to acknowledge alternative estimates and his reliance on questionable figures raises concerns about his understanding of energy economics. This could impact the Labor Party’s chances in future elections, as the electricity supply in Australia faces potential disruption. If there is a close election result and a shift in power in strategic positions, there is a chance for common sense and factual analysis to prevail. If Bowen does not change his approach to energy policies, he may repeat the mistakes that cost his party in the past.