[Theme Music Starts]

RUBY:

From Schwartz Media I’m Ruby Jones, this is 7am.

The Liberal Party says it wants the next election to be a referendum on energy.

After months of waiting, Opposition Leader Peter Dutton finally released the cost of his nuclear proposal.

Proof, Dutton says, that nuclear power would be cheaper than renewables and save all Australians money on their energy bills.

But his modelling stands in sharp contrast to that of Australia’s top scientists and the energy industry.

Today, national correspondent for The Saturday Paper Mike Seccombe, on how the numbers stack up and whether that matters to voters eager for lower power bills.

It’s Monday, December 16.

[Theme Music Ends]

[Advertisement]

RUBY:

Mike, on Friday Opposition Leader Peter Dutton announced the long awaited costings for his party's nuclear policy plan. So tell me what he said.

MIKE:

Well first observation, about time. We've been waiting for this for months and months and months. You know, it was all very optimistic modelling, right?

What happened was on Friday morning, Peter Dutton stood up at a press conference in Brisbane. Beside him were the Shadow Treasurer, Angus Taylor, the Shadow Climate Change and Energy Minister, Ted O'Brien, and the Leader of the Nationals, David Littleproud.

Audio excerpt — Peter Dutton:

“This is a plan which will underpin the economic success of our country for the next century.”

MIKE:

And they presented this final piece of the Coalition's vision for a nuclear future. You know, the economic modelling that they claim shows that their policy is actually financially viable. In fact they argue that it will come in substantially cheaper than Labor's path to net zero.

Audio excerpt — Peter Dutton:

“This will make electricity reliable. It'll make it more consistent, it'll make it cheaper for Australians and it will help us decarbonise as a trading economy as we must.”

MIKE:

So under their plan, nuclear energy would account for about 38 per cent of the Australian energy mix by 2050, which is when we're supposed to get to net zero. Of course, renewables would cover 54 per cent and the rest of it, which is about 8 per cent, would come mostly from gas and from a bit of storage.

They had previously announced a plan to build seven nuclear reactors around the country, which will be publicly owned. The first of these reactors would be operating by 2035 or thereabouts, so 10 or 11 years away. And according to their modelling, their plan would cost $331 billion over the 25 years out to 2050. And that is $263 billion, they claim, or 44 per cent cheaper than their estimate. And that's important to say, their estimate of what Labor's path to net zero would cost.

Audio excerpt — Ted O’Brien:

“That's around $10 billion every single year.”

MIKE:

And the Shadow Energy Minister, Ted O'Brien simply said that prices ultimately reflect costs over time. So you know their pitch is it will cost a great deal less to build a system and as a result, power will be cheaper for everyone.

RUBY:

Right, so tell me how Peter Dutton came to these figures.

MIKE:

Well, it's down to economic modelling, of course, which, you know, depends entirely on the assumptions you put into the model. And this, I have to say, includes some rather dubious and occasionally troubling assumptions.

For one, it's assumed that Australia's geriatric I think you could safely call them very breakdown prone coal fired power stations, most of which will be shuttered within a decade, and all of which are currently scheduled to be closed by 2038, will continue to operate for some years longer. It's not entirely clear how many years longer, but, you know, somewhere in the 3 to 5 years range.

Another assumption is that they will get the first new nuclear power station up and running 11 years from now in 2036. They've also assumed that Australia's electricity demand will rise by considerably less between now and 2050 than it is currently forecast to. And in part that's based on things like they expect that Australia's uptake of electric vehicles will be much slower than current forecasts. So all of these things indicate that we're going to continue to pump out greenhouse gases at a greater rate than we would otherwise.

The other big assumption is that nuclear generation will cost far less than the CSIRO and others say.

Their other claim is that there will be savings from not building unnecessary infrastructure by which they mean mostly transmission. So they're saying that they will be able to plug nuclear power stations into already existing transmission lines rather than having to build new transmission as is the case with renewables, which tend to be, you know, located in sunny and windy places away from a lot of infrastructure.

So all of this is based on modelling from this bunch of climate consultants called Frontier Economics, which is run by a guy called Danny Price.

RUBY:

Right, and who is Danny Price?

MIKE:

Well, he's an energy economist and a consultant, and he's worked for both sides of politics. He actually has a pretty strong track record, I have to say. He's worked for Labor as well as the Coalition most recently, I believe, for the Labor Government in South Australia. The other thing that is notable about Danny Price is that he seems to have fallen out with just about anyone who's anyone in the energy space, you know, the former chief scientist, Alan Finkel. Former Prime Minister Malcolm Turnbull, the former head of the Australian Energy Market Operator, Audrey Zibelman. He said that her agency should simply be abolished.

I actually spoke to Price last week and he expected that he would be criticised for this. He wears it as a badge of pride, quite frankly. He's always up for a stoush.

And like I said, the view of various policy experts that I spoke to was that he was a competent economist, but also someone with very strong opinions and a tendency to respond forcefully to those with whom he disagrees. And the other thing to say about him is that he has a way of getting headlines for the work he produces. For example, he came up with a figure for costing the current government's renewables plan that was $500 billion higher than the Australian Energy Market Operator estimates it will cost.

Bottom line, his modelling is not without controversy. And it also stands in pretty stark contrast to the work of a lot of other experts and agencies like the CSIRO. It would suggest, you know, he's a bit outside the mainstream in his views and perhaps a bit of a contrarian.

RUBY:

After the break, the science that contradicts the coalition’s claims.

[Advertisement]

RUBY:

So Mike, on Friday, the Coalition released its numbers for its nuclear policy and that was based on its modelling from Frontier Economics, run by Danny Price. Around the same time, though, the CSIRO actually also released a report into nuclear power. So how did the two compare?

MIKE:

The CSIRO, Australia's premier scientific organisations in association with the Australian Energy Market Operator and stakeholders in the energy business dropped their latest annual GenCost report, which sets out to work out the relative costs of different ways of generating electricity.

Audio excerpt — Unidentified woman:

“The CSIRO has found once again that nuclear power is about 50 per cent more expensive than renewables. So in other words, would cost twice as much to build.”

MIKE:

And what the CSIRO report found again for the seventh year in a row was that by far the lowest cost means of generating electricity was renewables, wind and solar. Even when you include, you know, firming with batteries and all the rest of it. Not only are renewables cheaper but they continue to get cheaper, so large scale solar and battery storage are two areas with huge price drops. Solar has dropped 8 per cent in the past year and it dropped 8 per cent in the year before that. Battery storage dropped 20 per cent in the past year alone, so the alternatives to nuclear are coming down dramatically in price.

The other thing about GenCost is, of course, that it reckons that we can't build nuclear in the time frames that Danny Price and the opposition is suggesting it's at least 15 years away. And the problem with that, of course, is that, you know, the coal power is scheduled to be shut down within less time than that. So in the meantime, we will extend the life of coal, but the coalition also says that we will rely more heavily on gas generation while we wait for nuclear. And GenCost says that the gas generation is, if you include carbon capture and storage, which would be necessary if we're to make it carbon neutral, would be around the same cost as nuclear. So, there's pretty big differences there, I think you'd say, between what GenCost and the CSIRO are telling us and what the Opposition modelling is telling us.

RUBY:

And so how is Peter Dutton responding to criticism of his nuclear plan and the reports that contradict his costings?

MIKE:

Well, I wouldn't say that CSIRO was specifically criticising his nuclear plan, but you're right, they come up with vastly different costs and really Dutton’s response was simply to shoot the messenger.

Audio excerpt — Peter Dutton:

“It just looks to me like there's a heavy hand of Chris Bowen in all of this. And I don't think people want to see that. I think what they know from Chris Bowen at the moment is that he's wrecking the energy system and that's wrecking the economy.”

MIKE:

You know, he immediately came out and said that the government had meddled and that CSRIO was not politically independent and that Chris Bowen, the energy minister, essentially had his thumb on the scales.

Audio excerpt — Chris Bowen:

“Peter Dutton wants you to believe that he can introduce the most expensive form of energy and somehow that will reduce power prices. AEMO and the CSIRO say nuclear is expensive.”

MIKE:

And Chris Bowen, in contrast, came out and said that Danny Price was a Liberal Party operative and that and that his modelling was also politicised.

Audio excerpt — Chris Bowen:

“In a choice between Peter Dutton and the CSIRO, I go with the CSIRO.”

RUBY:

So we've got both sides attacking the impartiality of the experts that the other side is relying upon.

The real test here is probably whether it matters to voters and whom the voters decide to believe.

RUBY:

So what do you think that voters will make of Peter Dutton's plan, Mike? Because, you know, he said that he wants this coming election to be a referendum on energy. So do you think that voters are going to support this particular vision?

MIKE:

Look, frankly, I have no idea. I think voters are mostly concerned with cost of living. So Peter Dutton has pitched this very much as a cost of living measure. We'll have to wait, I mean, they have dropped this enormous report from Danny Price. It's just dazzles you with economic jargon and numbers and calculations. I can only assume that every other economic modeller in the country is now going through it with a fine tooth comb and we'll see how it holds up. I have to say, previous modelling done for previous iterations of Coalition climate policy, not done by Danny Price but done by other people engaged by them, have not held up well in retrospect. And nor, for that matter, has some of the modelling that was done by Labor. You'll remember that Labor relied on economic modelling to say that power prices would decrease under them and they haven't. They've gone up. So, you know, modelling is very vulnerable to the assumptions that go into it and it's also vulnerable to changes in circumstance. I mean in the case of Labor's modelling, the change in circumstances was the Ukraine war that drove up power prices all around the world. So we're talking about something that has to foresee what might happen over the next 25 years and that's a very hard ask.

RUBY:

And as you say, Mike, so much of the messaging around this energy plan is about cost and you can see why. But what about the climate crisis? What does Peter Dutton's plan mean for emissions compared to Labor's?

MIKE:

Well, I think in a nutshell what the Opposition is saying is, okay, we will run more coal for longer. We will run more gas for longer. And then in due course, somewhere down the track they will come in with all this nuclear that will get us to net zero by 2050. Frankly, the thing that matters here is our overall emissions, what they call the carbon budget. And I haven't done the calculations, but it's hard to see how this will not put a big hole in our carbon budget.

The other thing is there's a political consideration here, of course, for Dutton and the opposition, which is that there are still within the ranks of the Coalition parties, particularly in the National Party, a bunch of people who don't even believe that climate change is a thing. And there's a bunch more who are very reluctant to take the kinds of steps that are necessary. So as far as the politics of it is concerned, this is a very convenient thing for Peter Dutton because for those inner city Liberals who realise their constituencies want something serious done about climate change, well they can say we will, but it will take a little while. And for those Nationals in the regions and others, they will say, yeah well, you know, we've kicked the can down the road by 10 or 15 years. And they can give a wink and a nod to their constituents.

So it's a very neat political way of papering over divisions within the Coalition. And I think to a substantial extent, that was always its intent.

RUBY:

Mike, thank you so much for your time.

MIKE:

Thank you for yours.

[Theme Music Starts]

RUBY:

Also in the news today …

A severe heatwave is set to continue across much of Australia until the middle of the week, with the Bureau of Meteorology issuing heatwave warnings for all states and territories on the mainland.

The heatwave will hit Victoria and New South Wales today, where some inland areas may exceed 45 degrees.

And

Kevin Andrews is being remembered as a conservative warrior and loyal colleague, after he died on Friday, following a year-long battle with cancer.

MPs across the political spectrum have shared statements of condolences for Andrews, who represented the seat of Menzies in Melbourne for over three decades and served at various times as minister for defence, social services, immigration, and workplace relations.

I’m Ruby Jones, this is 7am. See you tomorrow.

[Theme Music Ends]