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The Age
4 days ago
- Business
- The Age
‘Fork in the road': How a failed nuclear plot locked in Australia's renewable future
When Australians went to the polls and voted Anthony Albanese back as prime minister, they also voted for something that will outlive the next election: the power industry's guaranteed switch from coal to renewable energy. What they didn't vote for were state-owned nuclear reactors, forced delays of coal-fired power station closures and a slew of other Coalition promises widely viewed as threats to the country's era-defining challenge of cutting harmful emissions while keeping electricity supply and prices steady. Although times remain testing in the energy sector, a feeling of relief is clear. 'The nuclear conversation is dead and buried for the foreseeable future,' said an executive at one of Australia's biggest power suppliers, who asked not to be named. Even as the Nationals keep arguing for a nuclear future, any genuine suggestion that atomic facilities could still be built in time to replace retiring coal plants after the next election rolls around was now downright 'ridiculous', said another, adding that renewable energy was on track to surpass 60 per cent of the grid by 2028. 'That's great for the energy sector – it simplifies the path forward,' they said. Make no mistake, a seismic shift across the grid has been well under way for years now. Australia's coal-fired power stations – the backbone of the system for half a century – have been breaking down often and closing down earlier, with most remaining plants slated to shut within a decade. At the same time, power station owners including AGL, Origin Energy and EnergyAustralia are joining a rush of other investors in piling billions of dollars into large-scale renewables and batteries to expand the share of their power that comes from the sun, wind and water. The federal government has an ambitious target for renewable energy to make up 82 per cent of the grid by 2030. 'There won't be a renewable energy industry in 2030; it will just be the energy industry.' Andrew Richards, Energy Users Association of Australia The task of balancing a system dominated by less-predictable renewables becomes much more challenging, and requires the multibillion-dollar pipeline of private investment in the transition to continue. But ousted opposition leader Peter Dutton, before losing the May 3 federal election and his own seat, hatched a plan to change that course dramatically. A grid powered mainly by renewables would never be able to 'keep the lights on', Dutton insisted. Instead, he declared, a Coalition government would tear up Australia's legislated 2030 emissions-reduction commitments, cut short the rollout of renewables, force the extensions of coal-fired generators beyond their owners' retirement plans and eventually replace them with seven nuclear-powered generators, built at the taxpayer's expense, sometime before 2050. For Australians who wanted to see urgent action to tackle climate change – and investors at the forefront of the shift to cleaner power – the campaign to dump near-term climate targets in favour of nuclear energy came at the worst possible time. Some likened it to a 'near-death experience' for the momentum of the shift to a cleaner, modern energy system that would have wiped out investor confidence and killed off billions of dollars of future renewable projects. 'When you reflect on the significance of energy in the campaign, it's reasonable to say this was a fork in the road,' said Kane Thornton, outgoing chief executive of the Clean Energy Council. Loading The Coalition was convinced it was onto a winner. The government had been on the nose in the polls, cost-of-living stresses were everywhere, and Australians were more worried about the size of their electricity bills than where their electrons were coming from. Dutton argued for months that nuclear plants would be the best way to keep prices down, even though almost no one agreed with him. 'I'm very happy for the election to be a referendum on energy – on nuclear,' he said. In the end, the idea proved too toxic for voters. It delivered big swings against Dutton's candidates in electorates chosen to host reactors, while support for Labor grew in many of the places selected to develop massive offshore wind farms, which the Coalition had planned to scrap. The decisive election result 'locks in' the government's ambitious push for an electricity grid almost entirely powered by renewables, said Leonard Quong, the head of Australian research at BloombergNEF. 'The Labor Party's landslide victory … is a win for climate, clean energy and the country's decarbonisation trajectory,' he said. Loading The Albanese government's plan to transform the grid as more coal-fired plants exit is backed up by modelling from the Australian Energy Market Operator. It includes accelerating the build-out of renewables, backed up by thousands of kilometres of extra power lines, storage assets such as batteries and pumped hydroelectric dams to stash clean energy for when it's not sunny or windy, and a small but essential fleet of gas-fired power stations. Over the coming decade, the government's flagship renewable energy policy, known as the Capacity Investment Scheme (CIS), is expected to underwrite the financing of enough new wind and solar farms to double Australia's renewable energy generation capacity, according to BloombergNEF, plus a seven-fold increase in storage. As things stand, Australia is on track to fall shy of its target for renewables to supply 82 per cent of the grid by 2030. But even if it does, a massive increase is still inevitable. The renewables build-out hit record speed last year, said global consultancy Rystad Energy, putting renewable sources on course to surge from 40 per cent to 65 per cent of the grid by the end of the decade. The government's ambitious targets were 'driving significant change', said Andrew Richards of the Energy Users Association of Australia, representing major manufacturers. 'There won't be a renewable energy industry in 2030 – it will just be the energy industry,' he said. Still, there are some who work in the energy sector who think the door should not be closed on nuclear power permanently. Although nuclear is not seen as a viable option for the 2030s or even 2040s (CSIRO calculates the first reactor would take at least 16 years to build), EnergyAustralia chief Mark Collette thinks the technology is at least 'worth considering' as part of a much-longer-horizon energy mix – for instance, when the next generation of large-scale wind farms retires in 20 to 25 years. There are also questions about whether there will be enough renewable energy, supported by gas, to meet ballooning demand in the 2050s and beyond, especially if the rise of electrification, electric vehicles, artificial intelligence and energy-hungry data centres overshoots current forecasts. 'The gap left by coal will be filled by renewables, but what if we've got demand [forecasts] wrong?' said Matt Rennie, co-chief executive of energy consultancy Rennie Advisory. 'This is where the long-term future for nuclear energy becomes interesting – it makes sense to have the conversation.' For now, sidelining the nuclear debate will empower the sector to double down on the investment boom into wind, solar and storage projects to get ready for a fast-approaching future without coal, energy companies say. Loading There are also hopes that it will recast the focus on big challenges that still stand in the way of a smooth transition. These include the soaring cost of building high-voltage power lines needed to connect far-flung renewable energy zones to major cities, resistance among communities asked to host new energy infrastructure, and an impending domestic shortfall of natural gas that will be needed to power a renewed fleet of gas-fired turbines. Shannon Hyde, local boss of French energy giant Engie, said policy certainty was 'good for business and investment confidence' as the company sought to progress plans for more large-scale renewable generation and storage projects in Australia. 'But local challenges remain,' he said. 'We know the energy transition will depend on a partnered approach with ambitious and purposeful governments.' For Kane Thornton, who steps down as head of the Clean Energy Council in August after 10 years, every minute spent talking about nuclear energy was a minute that could have been spent addressing matters that were 'real and important'. 'I think we will look back on this and shake our heads at it as another distraction and another chapter of the quite silly energy policy that we've debated in this country for the past decade,' Thornton said.
Sydney Morning Herald
4 days ago
- Business
- Sydney Morning Herald
‘Fork in the road': How a failed nuclear plot locked in Australia's renewable future
When Australians went to the polls and voted Anthony Albanese back as prime minister, they also voted for something that will outlive the next election: the power industry's guaranteed switch from coal to renewable energy. What they didn't vote for were state-owned nuclear reactors, forced delays of coal-fired power station closures and a slew of other Coalition promises widely viewed as threats to the country's era-defining challenge of cutting harmful emissions while keeping electricity supply and prices steady. Although times remain testing in the energy sector, a feeling of relief is clear. 'The nuclear conversation is dead and buried for the foreseeable future,' said an executive at one of Australia's biggest power suppliers, who asked not to be named. Even as the Nationals keep arguing for a nuclear future, any genuine suggestion that atomic facilities could still be built in time to replace retiring coal plants after the next election rolls around was now downright 'ridiculous', said another, adding that renewable energy was on track to surpass 60 per cent of the grid by 2028. 'That's great for the energy sector – it simplifies the path forward,' they said. Make no mistake, a seismic shift across the grid has been well under way for years now. Australia's coal-fired power stations – the backbone of the system for half a century – have been breaking down often and closing down earlier, with most remaining plants slated to shut within a decade. At the same time, power station owners including AGL, Origin Energy and EnergyAustralia are joining a rush of other investors in piling billions of dollars into large-scale renewables and batteries to expand the share of their power that comes from the sun, wind and water. The federal government has an ambitious target for renewable energy to make up 82 per cent of the grid by 2030. 'There won't be a renewable energy industry in 2030; it will just be the energy industry.' Andrew Richards, Energy Users Association of Australia The task of balancing a system dominated by less-predictable renewables becomes much more challenging, and requires the multibillion-dollar pipeline of private investment in the transition to continue. But ousted opposition leader Peter Dutton, before losing the May 3 federal election and his own seat, hatched a plan to change that course dramatically. A grid powered mainly by renewables would never be able to 'keep the lights on', Dutton insisted. Instead, he declared, a Coalition government would tear up Australia's legislated 2030 emissions-reduction commitments, cut short the rollout of renewables, force the extensions of coal-fired generators beyond their owners' retirement plans and eventually replace them with seven nuclear-powered generators, built at the taxpayer's expense, sometime before 2050. For Australians who wanted to see urgent action to tackle climate change – and investors at the forefront of the shift to cleaner power – the campaign to dump near-term climate targets in favour of nuclear energy came at the worst possible time. Some likened it to a 'near-death experience' for the momentum of the shift to a cleaner, modern energy system that would have wiped out investor confidence and killed off billions of dollars of future renewable projects. 'When you reflect on the significance of energy in the campaign, it's reasonable to say this was a fork in the road,' said Kane Thornton, outgoing chief executive of the Clean Energy Council. Loading The Coalition was convinced it was onto a winner. The government had been on the nose in the polls, cost-of-living stresses were everywhere, and Australians were more worried about the size of their electricity bills than where their electrons were coming from. Dutton argued for months that nuclear plants would be the best way to keep prices down, even though almost no one agreed with him. 'I'm very happy for the election to be a referendum on energy – on nuclear,' he said. In the end, the idea proved too toxic for voters. It delivered big swings against Dutton's candidates in electorates chosen to host reactors, while support for Labor grew in many of the places selected to develop massive offshore wind farms, which the Coalition had planned to scrap. The decisive election result 'locks in' the government's ambitious push for an electricity grid almost entirely powered by renewables, said Leonard Quong, the head of Australian research at BloombergNEF. 'The Labor Party's landslide victory … is a win for climate, clean energy and the country's decarbonisation trajectory,' he said. Loading The Albanese government's plan to transform the grid as more coal-fired plants exit is backed up by modelling from the Australian Energy Market Operator. It includes accelerating the build-out of renewables, backed up by thousands of kilometres of extra power lines, storage assets such as batteries and pumped hydroelectric dams to stash clean energy for when it's not sunny or windy, and a small but essential fleet of gas-fired power stations. Over the coming decade, the government's flagship renewable energy policy, known as the Capacity Investment Scheme (CIS), is expected to underwrite the financing of enough new wind and solar farms to double Australia's renewable energy generation capacity, according to BloombergNEF, plus a seven-fold increase in storage. As things stand, Australia is on track to fall shy of its target for renewables to supply 82 per cent of the grid by 2030. But even if it does, a massive increase is still inevitable. The renewables build-out hit record speed last year, said global consultancy Rystad Energy, putting renewable sources on course to surge from 40 per cent to 65 per cent of the grid by the end of the decade. The government's ambitious targets were 'driving significant change', said Andrew Richards of the Energy Users Association of Australia, representing major manufacturers. 'There won't be a renewable energy industry in 2030 – it will just be the energy industry,' he said. Still, there are some who work in the energy sector who think the door should not be closed on nuclear power permanently. Although nuclear is not seen as a viable option for the 2030s or even 2040s (CSIRO calculates the first reactor would take at least 16 years to build), EnergyAustralia chief Mark Collette thinks the technology is at least 'worth considering' as part of a much-longer-horizon energy mix – for instance, when the next generation of large-scale wind farms retires in 20 to 25 years. There are also questions about whether there will be enough renewable energy, supported by gas, to meet ballooning demand in the 2050s and beyond, especially if the rise of electrification, electric vehicles, artificial intelligence and energy-hungry data centres overshoots current forecasts. 'The gap left by coal will be filled by renewables, but what if we've got demand [forecasts] wrong?' said Matt Rennie, co-chief executive of energy consultancy Rennie Advisory. 'This is where the long-term future for nuclear energy becomes interesting – it makes sense to have the conversation.' For now, sidelining the nuclear debate will empower the sector to double down on the investment boom into wind, solar and storage projects to get ready for a fast-approaching future without coal, energy companies say. Loading There are also hopes that it will recast the focus on big challenges that still stand in the way of a smooth transition. These include the soaring cost of building high-voltage power lines needed to connect far-flung renewable energy zones to major cities, resistance among communities asked to host new energy infrastructure, and an impending domestic shortfall of natural gas that will be needed to power a renewed fleet of gas-fired turbines. Shannon Hyde, local boss of French energy giant Engie, said policy certainty was 'good for business and investment confidence' as the company sought to progress plans for more large-scale renewable generation and storage projects in Australia. 'But local challenges remain,' he said. 'We know the energy transition will depend on a partnered approach with ambitious and purposeful governments.' For Kane Thornton, who steps down as head of the Clean Energy Council in August after 10 years, every minute spent talking about nuclear energy was a minute that could have been spent addressing matters that were 'real and important'. 'I think we will look back on this and shake our heads at it as another distraction and another chapter of the quite silly energy policy that we've debated in this country for the past decade,' Thornton said.
Mint
26-05-2025
- Business
- Mint
Australian shares flat as banks offset gains in miners, IT; WiseTech soars
WiseTech gains 4.7% after its $2 billion offer for US co May 26 (Reuters) - Australian shares closed flat on Monday, as losses in banks and utilities offset the gains made by miners and IT stocks, while WiseTech Global soared on announcing its biggest-ever takeover deal. The S&P/ASX 200 index closed unchanged at 8,361 points. The benchmark had finished at 8,360.9 points on Friday. Financials, which advanced 1.7% in the last two weeks, lost 0.2% on the day, with the "Big Four" banks losing between 0.1% and 1.3%. "Investors are likely profit-taking following a strong run for the banks due to their safe-haven nature," said Grady Wulff, a market analyst with Bell Direct. IT stocks gained 1% as sector major WiseTech Global hit a three-month peak after announcing a $2.1 billion takeover offer for U.S. cloud computing firm E2open. Mining stocks, which account for around 25% weightage of the benchmark, rose 0.6% as uranium miners soared, while higher metal prices added to the positive sentiment. Paladin Energy and Boss Energy climbed 9.3% and 7.5%, respectively, following U.S. President Donald Trump's move to sign an executive order on Friday to boost U.S. nuclear energy production. "... Demand for Aussie uranium producers is set to rise following Trump's latest move, which boosts the growth outlook for such stocks," Grady said. Utilities shed 2.4%, dragged down by Origin Energy's 4.5% decline after downgrading forecast for its Octopus Energy business. "Origin Energy downgrading UK guidance is a significant difference and investors clearly weren't prepared for such a swing in the negative direction," added Grady. Meanwhile, energy firms ended flat and consumer staples lost 0.2%. Gold stocks gained 2% despite a dip in the price of the yellow metal. "Gold miners have increasingly attracted investor attention over the last 12 months and even more so when markets face increased volatility," added Grady. Evolution Mining rose 3.4%. New Zealand's benchmark S&P/NZX 50 index ended 0.4% lower to 12,547.22 points. (Reporting by Rajasik Mukherjee in Bengaluru; Editing by Sumana Nandy)
Reuters
25-05-2025
- Business
- Reuters
Australia's Origin Energy raises lower end of full-year profit forecast
May 26 (Reuters) - Australia's Origin Energy ( opens new tab on Monday raised the lower end of its previous fiscal 2025 underlying profit outlook due to operational improvements and wholesale portfolio benefits. The energy retailer now expects full-year underlying earnings before interest, taxes, depreciation and amortization (EBITDA) to be between A$1.3 billion ($844.35 million) and A$1.4 billion, compared to the previous outlook range of A$1.1 billion to A$1.4 billion. Origin also said it now projects a loss of up to A$100 million in its share of annual underlying EBITDA from Octopus Energy, due to unseasonably warm weather across March and April in the United Kingdom and one-off impacts. Origin had previously estimated a positive contribution of up to A$100 million. Earlier this month, Origin announced an anticipated cut in its EBITDA share from Australia Pacific LNG (APLNG) for the six months ended June 2025 after APLNG reduced prices on sales to China's Sinopec ( opens new tab. ($1 = 1.5396 Australian dollars)
Bloomberg
23-05-2025
- Business
- Bloomberg
Australia Pacific LNG Cuts Price in Massive Sinopec Supply Deal
Australia Pacific LNG agreed to cut the price of liquefied natural gas sold under a major contract with China's Sinopec. The price review resulted in a reduction in the oil-linked contract slope from Jan. 1, 2025, Origin Energy Ltd. — which holds a 27.5% stake in the export project, said Friday. The Sydney-based company sees a reduction in its underlying earnings from the Australia Pacific LNG plant of A$55 million ($35 million) in the six months through June 2025.
