Swift, Affordable Energy Assets Key to Energy Challenges

"It is welcome that the coalition has put some of their nuclear cards on the table. It is a debate that Australia needs to have. Australia has real energy problems that demand well-considered responses from all sides of politics," Innes Willox, Chief Executive of national employer association Ai Group said today.

"The coalition's vision needs over time to be fleshed out with more detail such as around cost, viability and timelines, especially given the long delays and cost blow-outs in delivering nuclear in other Western economies.

"With no delivery projected until the middle of the next decade, the proposal does not immediately help with short-term emissions reduction or the cost and reliability of energy in the short term.

"The proposition too that the Federal Government own and operate the bulk of electricity generation in Australia raises some red flags. If it effectively renationalises electricity in Australia, there is a risk that private sector investment gets killed off.

"Using public funds for assets that may be uncommercial means more debt, more taxes or more cuts to other spending priorities.

"The Government's vision for a heavily renewable grid backed by gas peakers is right now at face value perhaps a better approach but the problem is delivery. Despite all the effort so far on system planning and finance mechanisms, planning approvals for new energy assets are slow and actual delivery is seriously lagging. The cost of new builds is higher than it should be. Social licence for new development is needed and it is not being sought or earned fast enough.

"If we don't solve this to deliver energy advantage for Australia, we risk passing up huge economic opportunity and losing our existing energy intensive industries.

"As we struggle with delivery of renewables due to construction costs, community opposition and planning, unless we focus on the basics nuclear will have the same issues in becoming a reality.

"Right now, solar and wind are getting cheaper globally, but Australia won't be competitive without a rigorous focus on speeding up approvals, lifting construction sector productivity, cutting financial risk, and ensuring there is enough gas available for peakers to run when needed.

"The Government and the Opposition need to focus on delivering the best options we have today faster and cheaper. That is wind and solar for bulk energy, transmission to connect it up, storage and smart demand to provide flexibility and essential gas peakers for backup. Transmission in particular is the key to unlock new private investment in the cheapest energy sources across Australia.

"And the parties should all leave the door open to future technologies. The nuclear ban has never made sense. Despite the poor economics of current nuclear electricity generation, nuclear is very safe if well engineered and well regulated. Future innovation may change the economics and the law should be ready for that.

"A deal between the major parties to remove the nuclear ban, back new transmission and get on with the pursuit of energy advantage may be hard to imagine as we enter an election year. But it would be ideal for the national interest," Mr Willox said.

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