Mike Jonas,
Climate fear is fading quickly, but repairing the damage it has caused could take a long time and cost a lot of money.
How to Cut the Electricity Price in Australia showed how a day-ahead market could stabilize the electricity grid and reduce the price of electricity. In order for the price to fall further in the future, political courage is needed, because mass protests against new coal or nuclear power plants are not too difficult to imagine.
What’s the best that can be expected for the future of Australia’s electricity supply?
Australia already has extensive wind and solar installations. Last quarter, renewable energy (including rooftop solar) accounted for 42.7% of total supply. This won’t go away anytime soon, but as wind and solar systems age and need to be replaced, plants will close when lower-cost sources of supply are allowed to compete. The media tells us that we are facing rapidly growing demand from AI, which will require lots of cheap, reliable electricity. Well, that’s true, of course, but why have they been silent for so long about the fact that people need a lot of cheap and reliable electricity?
How might Australia’s electricity supply change with an efficient market and no subsidies, targets or regulations? I asked Grok, who replied that…
“…streamlined approvals (e.g., one-stop shop for federal approvals, no state bans), $50 billion to $100 billion in public-private financing, and workforce training. No protest/lawsuit delays.”
- Short term (2026-2030: 5 years): Renew/expand coal (2-3 years/construction); Build 5-10 GW of gas (1-2 years). AER [Variable Renewable Energy] Closings begin (1-2 year completion). By 2028, prices will fall by 30%. Achievable: Similar to gas expansions in Queensland.
- Medium term (2031-2035: 7-10 years in total): First nuclear power (1-2 GW SMRs) online by 2035 (reducing lead time of more than 15 years through modular factory in Australia). Complete coal/gas optimum by 2030.
- Long term (2036-2040: 10-15 years in total): 10-20 GW nuclear power plant park (parallel construction); Coal peaks, then plateaus. Full Transition: 12 years to 80% shippable mix.
Risks: Supply chain (nuclear fuel plant) or labor shortage could add two to three years to the time, but political will can mitigate this through imports/training. That’s better than the coalition [the opposition in parliament] Forecasts (2037 first plant) through fast tracking regs.”
A lot of the cost and delay (“12 years to 80% dispatchable mix”) is simply because we went very expensively in the wrong direction – we should have had 80% dispatchability all along. To put a 30% price drop in five years into context, the price is up 37% in the last year alone. Compared to Australia’s current performance, a 30% price drop would seem like a miracle.
“$50 billion to $100 billion in public-private financing.” That’s a lot, but it’s similar to the current rate of spending on renewable energy. As I said, it could take a long time and a lot of money to repair the damage caused by the climate crisis.
P.S. “modular factory in Australia” – it’s tempting to be cynical, but hey! Why not???
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