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24 APRIL 2025

COALITION'S NUCLEAR BOMBSHELL WOULD COST ECONOMY $4.3 TRILLION BY 2050 

Our new analysis, released today, of the economic implications of the nuclear pathway modelled by Frontier Economics for Australia’s energy transition – modelling cited extensively by the Federal Coalition to defend its nuclear plan. It reveals a massive hollowing out of Australian industry, permanently higher total energy costs, uncosted unabated carbon pollution, and assumes trillions of dollars in lost GDP. 

Our report exposes damaging flow-on costs to the economy for which the Frontier modelling fails to account.

Combined with Frontier’s extreme underestimation of the capital costs of building nuclear reactors, these costs accumulate to $4.3 - 5.2 trillion by 2050, 13-16 times the $331bn price tag for a nuclear Australia assumed by Frontier Economics.

These costs include an estimated:

• $3.5 trillion in cumulative undiscounted lost GDP through 2050. 

• $111-332bn in unaccounted for nuclear capex costs, of which the Frontier modelling erases all but $13.5bn by failing to both amortise nuclear’s capital investment costs incurred after 2050 and account for inevitable expensive retrofits;

• $234bn in higher fuel costs due to slower electrification meaning consumers and businesses are forced to rely on higher cost fossil fuels for longer;

• $72-720bn in economic damage from 1.4-2.0bn of additional tonnes of CO2 emissions;

• $100bn in lost export revenue from the aluminium industry alone, likely to collapse under the drastically reduced industrial electricity demand in the nuclear scenario. 

Report author CEF director Tim Buckley said:

“It strains credulity that the Frontier Economics nuclear report is riddled with shortcomings which completely undermine its credibility as a work of serious energy transition analysis, given this is the central modelling being relied upon by the Opposition for its key energy and climate policy offering of the 2025 Federal election. 

“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 $300bn 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’. 

“It beggars belief that this is the best the party representing itself as alternative federal government can come up with, as the nation stands on the brink of an immense generational opportunity to remake itself as a global renewables superpower and green energy export leader in a rapidly decarbonising world.”

>>> Read the full report here.

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COALITION NUCLEAR POLICY PUTS ALUMINIUM INDUSTRY & 13,500 JOBS AT RISK  

A new report by our colleagues and partners at Renew Australia for All finds that delaying energy transition in favour of nuclear reactors in Australia risks the viability of the country’s four aluminium smelters and 13,500 related jobs, as the sector would face high energy prices and a collapse in electricity usage across eastern states by 2035.

The RAFA analysis shows that in the modelling the Federal Opposition is relying on to inform its nuclear policy, industrial electricity usage would halve by as early as 2035, down from 45.4TWh pa currently to 22.8TWh. 

A collapse in energy usage of this magnitude is equivalent to the closure of Australia’s four aluminium smelters, which currently use 23.5TWh of electricity pa.

This risk of collapse is further exacerbated by increasing energy costs and a timeframe for deployment far too slow to meet the decarbonisation trajectory dictated by the climate science and outlined by industry.

Australia’s aluminium industry supports 7,594 direct and 5,886 jobs indirectly. We need to ensure the sector’s viability by continuing to invest in the pathway we are already on: repowering the smelters with lowest-cost, firmed renewables.

CEF supports RAFA’s call for all sides of government to accelerate our pathway to a re-industrialised Australia powered by secure, affordable, abundant firmed renewables – the key to our potential to capture the green premium on decarbonised products such as green aluminium and green iron in which Australia has a huge, time-critical opportunity to lead globally.

>>> Read the report.

>>>See media on the report, including an AAP story syndicated in The Newcastle Herald and elsewhere.

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FEDERAL HOME BATTERY BOOST A GAMECHANGER FOR SLASHING POWER BILLS 

On 6 April, Prime Minister Albanese announced a $2.3bn program to subsidise the purchase of household batteries, delivering a 30% rebate on the price of battery systems from 1 July 2025, with small business and community facilities also eligible. 

This is just what we need to see: ambitious policy and investment in incentives to accelerate the rollout of distributed batteries across the residential and SME sectors, driving real, permanent cost of living solutions for consumers and reducing energy costs for small business.

Analysis by the Department of Climate Change, Energy, the Environment and Water calculates a household with solar and a battery system could save up to $2,300 annually, equivalent to 90% of a typical family’s electricity bill.

The program will provide Australian consumers enhanced access to distributed energy resources, with increased uptake of residential batteries supporting even more rooftop solar – in addition to the four million rooftops already solarised –  as well as ground heat pumps and solar heated water tank deployments. This enables a progressive but accelerated ‘electrification of everything’, starting with households, that leverages the existing grid transmission and distribution structure, and can be deployed fast – in days, rather than decades. By contrast, the Coalition's nuclear Australia con, even if it were viable, would not see reactors in place before 2040 and result in massive permanent upward pressure on energy bills. 

The Cheaper Home Batteries program reflects policy proposals from community independents such as Allegra Spender's Permanent Energy Bill Relief Plan, and community campaigns including Renew Australia for All.

Another key part of the picture we need to see is investment in targetted relief for those who need it most, but to date have limited access to bill-slashing consumer energy resources. Policies to improve energy efficiency, and to support electric appliances and solar for renters, low-income households, social housing and First Nations communities should be an immediate priority for the federal government, to ensure the benefits of our energy revolution are evenly distributed across the community, and that those otherwise excluded by disadvantage have equity of access to a just clean energy future.

>>> Read our op ed on the Cheaper Home Batteries program in PV Magazine.

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QLD BEATS A CATASTROPHIC RETREAT ON CLEAN ENERGY TRANSITION 

8 April saw Queensland LNP Treasurer and Minister for Energy David Janetzki announce plans to extend the life of state-owned coal power clunker Callide B three years beyond its scheduled closure in 2028, with extensions also planned for the other coal power generators. 

This damaging policy reverses QLD’s national leadership under the previous government’s $62bn Energy and Jobs Plan in building out large-scale renewables and storage, and the record uptake of rooftop solar, just as the climate emergency and cost of living crisis driven by skyrocketing fossil fuel energy bills escalates. 

An October 2024 report by Queensland Conservation Council revealed keeping Callide B open could cost taxpayers up to $420m a year, driving up electricity prices, crowding-out new renewables investment and damaging grid reliability. The decision is essentially ‘coalkeeper 3.0’, a la ‘coalkeeper 2.0’ in which the NSW Labor Government committed to pay Origin Energy up to $225m pa to extend the life of Australia’s largest coal-fired power station, Eraring, to 2027.

Just days prior to Janetzki’s announcement it was revealed the troubled Callide C suffered another major explosion that will shut down a unit for at least two months. This follows a structural failure in October 2022 that took 17 months to restore, and an explosion in May 2021 which saw a unit offline for more than 3 years, with a cumulative $400m reconstruction bill. 

Janetzi also announced plans to release an energy ‘roadmap’ centred on continued dependence on coal infrastructure – confirming “coal generation will continue to play a central role in Queensland’s grid” – and the construction of new gas capacity. 

This translates to multibillion dollar taxpayer funded subsidies for new gas infrastructure, which will take years to approve and build, and lock in high-emissions, expensive fossil fuels for decades to come. Final costs for the Kurri Kurri gas white elephant in NSW, for example, are expected to exceed $2bn – a 230% cost blowout – with completion delayed at least 1.5 years to mid 2025, delivering only continued reliance on end-of-life coal capacity. 

Clearly, the Crisafulli Government is committed to maintaining QLD’s legacy fossil fuel energy system – a catastrophic setback to the huge progress that had been made on transforming the resources heartland of QLD to a zero-emissions energy, exports and investment superpower. 

>>>Read CEF’s full analysis of the announcements in Renew Economy. 

FIRST YEAR OF SAFEGUARD DATA SHOWS FEDERAL GOVERNMENT MOVING INDUSTRIAL EMISSIONS REDUCTION IN RIGHT DIRECTION

On 15 April, the Clean Energy Regulator (CER) published data for the first Safeguard Mechanism (SGM) compliance period (2023-24) with reduced emissions baselines, i.e., reduced limits set by the government on greenhouse gas emissions from industrial facilities. 

The Albanese Labor Government’s reforms to the SGM have resulted in a significant trajectory shift, amending loopholes that undermined the effectiveness of the SGM as originally designed by the Turnbull LNP government, which saw rising emissions in the six years prior to the reforms (and CEF endorses the Government’s work to further improve the SGM, as reported in the AFR this week).

Notably, the data shows:

• 219 of Australia’s largest emitting facilities were covered under the SGM, with gross CO2 equivalent (CO2-e) emissions dropping from 138.7 million tonnes (Mt) to 136Mt. 

• The government’s updated emissions intensity determinations removed nearly all “headroom” from facility baselines – the difference between total emissions and the baseline, which allows facilities to increase emissions without exceeding their individual baselines, diminishing the scheme’s effectiveness in reducing emissions. This is a significant improvement from the 30Mt surplus in baselines recorded in 2022-23. 

• The reforms saw the number of Australian Carbon Credit Units (ACCUs) required to be surrendered to the government by safeguard facilities to meet their obligations skyrocket to 7.1 million, up 479% from 2022-23.

• 62 facilities reported emissions below their baselines, generating 8.3 million Safeguard Mechanism Credits (SMCs). However, over 74% of SMCs in 2023-24 were issued to coal mining and oil and gas extraction facilities. There is still a significant buffer between facility emissions and emission baselines for much of the fossil fuel sector. 

• 5 of Rio Tinto’s 8 iron ore mining facilities exceeded their baselines by more than 30%, requiring it to surrender almost 436,000 ACCUs to meet its obligations. 

• 17 facilities, including Rio’s Bell Bay and Boyne aluminium smelters, multiple Rio and Alcoa alumina refineries  and the Port Kembla and Whyalla Steelworks were provided with trade-exposed, baseline-adjustment (TEBA) concessions, which limits the annual reduction in baselines built into the SGM framework from 4.9% to just 1%, relieving the pressure on these facilities to more rapidly reduce emissions. 

>>>CEF’s forthcoming report by Matt Pollard looks at the critical need for a regulated, progressively rising price on carbon in the trade of industrial products in Asia, e.g. iron and steel, aluminium and cement, to properly value their decarbonisation and complement domestic carbon pricing schemes such as the SGM.

AND THE WINNER IS… CHINA:
MONTHLY ENERGY UPDATE APRIL 2025

China just keeps on winning the global renewables race. In the first quarter of 2025, China added 76.5GW of renewable power capacity, up 21% yoy. Solar power made up 70% of new added capacity, more than six times the share of thermal power, confirming the trend of China’s solar-centric energy transition. 

Overall electricity demand grew +3.4% yoy in 1QCY2025, lower than the +5.4% GDP growth. Thermal power generation declined 4.1% yoy to 1,494TWh whilst renewable energy generation rose 26.7% yoy to 561TWh. New zero emissions generation not only covered increased electricity demand, but ate into coal generation's existing position. Only one quarter, but a definitely strong start, showing a peak then plateau in coal use in China is entirely achievable.

Key highlights: 

• Renewables made up 89% of new power capacity added in the first quarter of 2025

• Solar and wind power generation increased 27% compared with the previous year

• Grid modernisation investment hit US$13 billion, up 25% year-on-year

• China’s coal imports drop amid trade uncertainties

• 7+ countries strengthen renewable energy cooperation with China as Trump’s reconfiguration of the global order takes the US out of contention

• China's GDP and exports growth rate shows an upward trend in the first quarter, despite Trump's tariffs. 

China is also pushing ahead with ambitious policy initiatives to accelerate its energy transformation, advancing the development of virtual power plants, green certificates, vehicle-to-grid technologies, and low-carbon advanced technologies.

IF AUSTRALIA IS SERIOUS ABOUT BECOMING A RENEWABLE ENERGY SUPERPOWER, CHINA MUST BE PART OF THE ANSWER

As Deputy Prime Minister Richard Marles rebuffed Chinese ambassador Xiao Qian's invitation this month that Australia "join hands" with Beijing to resist Donald Trump's tariffs, CEF China analyst Caroline Wang reflects on our exceptional opportunities to partner with the global decarbonisation leader:

Australia and China share strong complementarities in green energy driven by Australia’s abundant natural resources and China’s dominance in manufacturing, technology, and investment. There is huge potential for Australia-China collaboration in areas of mutual interest, such as solar R&D, green iron, and battery recycling.

The last three years has seen Australia-China relations stabilise since the 2020 fallout, however the overall trust deficit has not recovered. The government has maintained a high level of securitisation in its approach to China. By not engaging, Australia is losing out on opportunities to ensure the country’s long-term economic security and prosperity. 

These opportunities are instead going to other countries, keen to partner with leading Chinese cleantech companies to strengthen their economic competitiveness in the global green transition. In just the last two months, more than 7 countries have strengthened green energy cooperation with China.

If Future Made in Australia is to succeed, the government needs to create an enabling environment to attract investment and technology from world-leading Chinese companies. Establishing an Australia-China green energy MOU to build upon the climate change cooperation MOU would be a good start. Otherwise, they will – already are – going elsewhere where they find a more welcoming environment. Australia risks falling further behind as the world accelerates towards renewable energy and advanced technologies.

>>> Read CEF China analyst Caroline Wang’s full op ed, to go live in the Lowy Interpreter today.

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AJ for the CEF team.

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