Not only do experts suspect that the nuclear energy plan by the coalition will cost far more than anticipated by analysis released last week by think tank Climate Energy Finance (CEF) has found that the plan will also “hollow out” the nation with “higher energy costs, unabated carbon pollution and trillions of dollars in lost GDP.”
Coalition leader, Peter Dutton, last year had relied on economic consultants Frontier Economics’ modelling of his plan to build nuclear reactors in Australia, which showed the costs would be $263 billion lower than the Albanese government’s plans for renewables.
The new CEF report finds that the Frontier modelling has failed to account for the damaging flow-on costs to the economy should the coalition’s nuclear plan go ahead.
“Combined with Frontier’s extreme underestimation of the capital costs of building nuclear reactors, these costs accumulate to between $4.3 trillion and $5.2 trillion by 2050, 13-16 times the $331 billion price tag for a nuclear Australia assumed by Frontier Economics,” the report says.
The estimates include:
- $3.5 trillion in cumulative undiscounted lost GDP through to 2050
- $111 to 332 billion in nuclear capital expenditure costs, rather than the $13.5 billion estimated by Frontier, which fails to account for capital investment costs and inevitably expensive retrofits
- $234 billion in higher fossil fuel costs due to slower electrification
- $72-720 billion in economic damage from up to $2 billion additional tonnes of CO2 emissions
- $100 billion in lost export revenue from the aluminium industry alone, as it would likely collapse due to the reduced industrial electricity demand
Tim Buckley, CEF director and a former managing director of investment bank Citigroup, said that Frontier’s report was “riddled with shortcomings”, which “undermines its work of serious energy transition analysis,” relied upon by the opposition.
“The largest share of the Frontier-modelled ‘savings’ in energy transition investment comes at the cost of delivering much weaker outcomes for Australia, including an assumption the Australian economy’s GDP is $300 billion lower annually by 2051. This represents an astonishing $3.5 trillion in cumulative GDP forgone.
“This is as weak as the opposition leader recently declining to accept the settled climate science because he is ‘not a scientist’.”
Buckley added that he was disappointed by the opposition, when the nation “stands on the brink of an immense generational opportunity to remake itself as a global renewables superpower and green energy trade and export leader in a rapidly decarbonising world”