Australia’s Electricity Future – Watts Up With That?

Mike Jonas,

The climate scare is failing fast, but the damage it has done could take a long time and a lot of money to fix.

In How to Cut the Electricity Price in Australia, it was shown how a day-ahead market could stabilise the electricity grid, and start to bring down the price of electricity. For the price to come down more in future, there needs to be political courage, because it is not too hard to imagine mass protests against new coal-fired or nuclear power stations.

Looking into the future for Australia’s electricity supply, what is the best that could be expected?

Australia already has a lot of wind and solar supply in place. In the latest quarter, renewables (including rooftop solar) provided 42.7% of total supply. That isn’t going to go away quickly, but as the wind and solar equipment ages and needs replacement, facilities will close if more cost-effective sources of supply are allowed to compete. The media tell us that we face rapidly growing demand from AI, which will need a lot of cheap reliable electricity. Well, that’s true of course, but why have they kept so quiet for so long about the need for humans to have a lot of cheap reliable electricity?

With an efficient market, and with no subsidies, targets or mandates, how could Australia’s electricity supply change? I asked Grok, which replied that with …

“… streamlined approvals (e.g., one-stop federal permitting, no state bans), $50-100B public-private funding, and workforce training. No delays from protests/lawsuits.

• Short-term (2026-2030: 5 years): Repower/extend coal (2-3 years/construction); build 5-10 GW gas (1-2 years). VRE [Variable Renewable Energy] closures begin (1-2 years wind-down). Prices fall 30% by 2028. Achievable: Similar to QLD’s gas expansions.
• Medium-term (2031-2035: 7-10 years total): First nuclear (1-2 GW SMRs) online by 2035 (lead time cut from 15+ years via modular fab in Australia). Full coal/gas optimum by 2030.
• Long-term (2036-2040: 10-15 years total): 10-20 GW nuclear fleet (parallel builds); coal peaks then plateaus. Full transition: 12 years to 80% dispatchable mix.

Risks: Supply chain (nuclear fuel fab) or labor shortages could add 2-3 years, but political will mitigates this via imports/training. This beats Coalition [the opposition in parliament] projections (2037 first plant) by fast-tracking regs.“.

A lot of the expense and delay (“12 years to 80% dispatchable mix“) is simply because we have been going very expensively in the wrong direction – we should have been at 80%+ dispatchable all the time. To put a 30% price fall in 5 years into context, the price is up 37% in just the last year. Compared with where Australia is heading right now, a 30% price fall would feel like a miracle.

“$50-100B public-private funding”. That is a lot, but it’s similar to the current rate of spending on renewables.Like I said, the damage that the climate scare has done could take a long time and a lot of money to fix.

PS. “modular fab in Australia” – it’s tempting to be cynical, but hey!, why not???