Nuclear Power at Center of Australia’s Election Showdown

The BGA Australia Team, led by Managing Director Michael “Mick” McNeill, wrote an update to clients on Australia’s nuclear power issue.

Context

• Australian opposition leader Peter Dutton has announced that a Liberal-Nationals coalition government would build seven government-owned zero-emissions nuclear power plants in response to what he described as the Labor government’s “expensive renewables-only approach.” The last Liberal-Nationals government had tentatively considered nuclear power, and Dutton declared last year that the coalition would look at options to include nuclear in Australia’s energy mix.

• The nuclear power issue has set up a showdown with the Anthony Albanese Labor government, unions, the renewable energy lobby and Labor state governments. The coalition has yet to provide cost projections but is projecting confidence that it would be a better deal for taxpayers than the Albanese government’s renewable energy policies. With the government’s popularity declining, the cost of living a major concern for middle Australia, energy security in the headlines and polls showing growing support for nuclear power, Dutton has judged that the time is right to unveil his politically high-risk signature policy. “I’m not interested in lining the pockets of rich green millionaires, I want to bring down the price of electricity for average mums and dads.”

Significance

• The public is increasingly skeptical about Australia’s ability to reach its 2030 emissions targets and whether the rollout of renewables will keep pace with the projected retirement of all coal-fired powered stations over the next 15 years. Nevertheless, Labor and the Liberal-Nationals agree that gas will be a critical transition fuel for at least the next decade.
• A Liberal-Nationals government would initially develop two establishment projects using either small modular rectors or larger scale plants. It would start producing electricity by 2035 (with small modular reactors) or 2037 (if larger plants are found to be the best option). The government would own these assets but form partnerships with nuclear companies to build and operate them.

Implications

• Companies can expect support from The Business Council of Australia in lifting the nuclear ban and a “technology-agnostic approach to the transition to net-zero emissions” that would leave it open to the community and the private sector to consider. The Minerals Council of Australia said nuclear energy offered industry “a crucial pathway … to reduce emissions cost-effectively while maintaining access to reliable baseload power.” Some observers envisage potential benefits in terms of operating the proposed AUKUS (Australia-United Kingdom-United States) nuclear powered submarines — an initiative agreed under the last Liberal-Nationals government and supported by the Albanese government.
• Businesses should watch out for opposition to the proposal. Prime Minister Albanese said the plan risked “economic catastrophe,” and the lack of details meant that “no investor, no financier will go near this with a barge pole as it doesn’t stack up.” The Australian Industry Group said “the proposal does not immediately help with short-term emissions reduction or the cost and reliability of energy in the short term … If it effectively renationalizes electricity in Australia, there is a risk that private sector investment gets killed off.” The Clean Energy Council said “building new reactors would take at least 20 years and cost six times more” than renewables.

We will continue to keep you updated on developments in Australia as they occur. If you have any comments or questions, please contact BGA Australia Managing Director Michael “Mick” McNeill at mmcneill@bowergroupasia.com or BGA Energy, Climate and Resources Senior Director Bradford Simmons at bsimmons@bowergroupasia.com.

Best regards,

BGA Australia Team

Michael McNeill

Managing Director

Mick is a highly-experienced government relations expert and trusted advisor on consensus building, conflict resolution and legislative developments. He has played an integral role in helping parties achieve desired outcomes in areas of national security, health policy, foreign policy and reputational crisis management, as well as media relations, communications campaigns, immigration and human rights. Mick has two decades’ experience working with government as a media analyst, political adviser and NGO advocacy manager. After a stint serving as an adviser to an Australian senator, Mick took on the role of the locally engaged senior political specialist at the U.S. Embassy in ... Read More