Securing Australia’s energy future: hard decisions we can’t keep dodging

Australia is in the middle of one of the fastest energy transitions in the developed world. In 2024, 36% of our total electricity came from renewables – mainly solar and wind – the highest share on record and up sharply from just a few years ago.(Energy.gov.au) In the National Electricity Market (NEM), renewables supplied about 39% of grid power across 2023–24, with short bursts where wind and solar met more than three-quarters of demand.(Clean Energy Regulator)

It’s a remarkable shift. But it masks a more uncomfortable truth: the structure of our system was built for coal, not for what’s coming next. Our coal fleet is old, increasingly unreliable and already shrinking. Our transmission network was designed to move power from a handful of coal basins, not from dozens of renewable zones. And households and businesses are feeling the pain of volatile prices as coal outages, hot summers and gas price spikes collide.(The Guardian)

The question is no longer whether Australia will transition – that’s happening. The real question is whether we will manage that transition in a way that leaves us with energy that is reliable, affordable and low-emissions – or a system that is fragile and expensive, dragging on the rest of the economy.

Energy as economic infrastructure, not a culture war

Globally, energy isn’t just another policy area – it’s foundational economic infrastructure.

The World Bank and OECD both point to a strong link between reliable, affordable electricity and long-term GDP growth. Where power is scarce, unreliable or overpriced, you see stalled industrial development, lower productivity and higher unemployment.(fticonsulting.com)

South Africa is the cautionary tale everyone points to. Years of under-investment, poor maintenance and governance failures in the coal-based system led to rolling “load shedding” on 329 days in 2023, costing the economy an estimated 2 percentage points of GDP that year alone.(FNB) That’s what happens when hard decisions are delayed until the system is already cracking.

By contrast, countries that have treated energy as nation-building infrastructure – and invested early and consistently – are now reaping the benefits.

• France gets close to 70% of its electricity from nuclear, with most of the rest from hydro and other renewables; more than 96% of its electricity is low-carbon, and fossil fuels play only a marginal role.(Low-Carbon Power Data)
• Norway built out hydro and, more recently, wind and interconnectors, turning electricity into a strategic export as well as a domestic advantage.

Not all of these models are copy-and-paste options for Australia – our geography and politics are different – but the pattern is clear: countries that invest early and plan at a system level tend to end up with cleaner, cheaper and more reliable power. Those that don’t are punished by their own infrastructure.

Where Australia stands now

A grid in transition, sitting on old foundations

On the surface, Australia’s numbers look encouraging:

• Renewables at 36% of total generation and rising.(Energy.gov.au)
• A national target of 82% renewables by 2030.(The Australian)

But under the surface:

• Our coal plants are mostly 40-plus years old, increasingly prone to sudden breakdowns and already scheduled to shut down over the next 10–15 years.
• Our gas fleet, while essential for peak demand and emergencies, exposes us to global price shocks.
• Our transmission network still largely radiates from coal basins, not from the new Renewable Energy Zones being built across regional Australia.

The Australian Energy Market Operator (AEMO) has been blunt in its 2024 Integrated System Plan (ISP). The least-cost path to net zero by 2050 is a system built around:

Renewables, firmed by storage and flexible gas, and underpinned by major new transmission.(AEMO)

If we don’t build that infrastructure in time, we risk ending up with the worst of both worlds: retiring coal without enough firm replacement, and new renewables that can’t get their power to where it’s needed.

Infrastructure is the real story: wires, storage and system strength

The ISP’s “optimal development path” is effectively a to-do list for rewiring the nation:

• Thousands of kilometres of new and upgraded transmission to connect Renewable Energy Zones to load centres.(The Australian)
• A step-change in storage – utility-scale batteries and pumped hydro, complemented by orchestrated rooftop solar and household batteries.(AEMO)
• New flexible gas generation, used sparingly but crucial as a backstop during rare periods when renewables are low and demand is high.(AEMO)

This isn’t glamorous; it’s the hard engineering and planning work that makes a high-renewables system function.

If we under-invest in this backbone, we invite:

• Reliability risks – more tight supply incidents, emergency directions, and potential blackouts.
• Price volatility – wholesale prices spiking whenever weather, outages or fuel prices misbehave.
• Lost opportunities – energy-intensive industries and advanced manufacturing looking elsewhere because they can’t rely on our system.

Which brings us to the contentious question that always surfaces when reliability and decarbonisation are discussed together.

Should nuclear be part of Australia’s energy mix?

The nuclear debate in Australia is often more heat than light. Strip away the ideology, and the question becomes: does nuclear make sense for Australia, given our system needs, cost realities and timelines?

What nuclear does well

From a physics and climate perspective, nuclear has real strengths:

• Ultra-low emissions across its lifecycle, comparable to wind and hydro.
• Very high capacity factors – often 85–95% – meaning plants run almost continuously as firm, dispatchable supply.
• System strength – big rotating machines that inherently support grid stability.

France is the flagship example. Between late 2024 and late 2025, about 69% of its electricity came from nuclear, with another ~21% from hydro, wind and solar – delivering more than 96% low-carbon electricity and very limited fossil generation.(Low-Carbon Power Data)

That gives France a level of energy independence and emissions performance most countries would envy.(World Nuclear Association)

The global problem: cost and time

The difficulty is that recent Western nuclear projects have been slow and extremely expensive:

• Projects in the US (Vogtle), UK (Hinkley Point C) and France (Flamanville) have all suffered multi-year delays and cost blowouts.
• Small Modular Reactors (SMRs), increasingly promoted as the next wave, have yet to prove themselves commercially. The most advanced US SMR project was cancelled after its cost projections ballooned, and there is still no commercial SMR fleet operating anywhere in the world.

CSIRO’s 2023-24 GenCost report – Australia’s main reference for generation costs – includes large-scale nuclear for the first time. Its conclusion is stark:

• New nuclear is significantly more expensive than firmed renewables in Australia, both now and in 2030, even when transmission and storage are included for renewables.(CSIRO)

The report also notes that nuclear costs are especially uncertain in countries like Australia that have no existing civilian nuclear industry, regulatory framework or supply chain.(CSIRO)

Australia’s particular starting point

For nuclear to enter the Australian mix at all, several hurdles must be cleared:

1. Legislation
   Civilian nuclear power is currently banned under federal law. Repealing that would be a major political step.
2. Regulation and institutions
   We would need:
   • A dedicated nuclear regulator,
   • Licensing and safety frameworks,
   • Emergency response capacity,
   • Long-term waste arrangements,
     built up over a decade or more before a reactor ever comes online.
3. Timeline
   Even in countries with a mature industry, large reactors typically take 10–15 years from approval to operation. In a “first-of-a-kind” country like Australia, most experts see 2040 or later as the earliest realistic window.
4. Cost and risk for consumers
   With no local track record, any first reactors here would likely come with:
   • Heavy government underwriting,
   • Significant cost risk shifted onto taxpayers or bill-payers,
   • Ongoing public scrutiny and potential project-cancellation risk mid-build.

In short: nuclear cannot help Australia with its 2030 or even 2035 reliability challenge. It is, at best, a potential long-term option.

So what’s the sensible position on nuclear?

Given all of that, three conclusions follow:

1. Nuclear is not a primary tool for Australia’s current transition window (to ~2035)
   Our immediate tasks – replacing failing coal, hitting emissions targets, stabilising prices – must be done with technologies that can be deployed this decade: renewables, storage, transmission, and flexible gas.
2. Nuclear could be a long-term hedge – but only if costs and global deployment improve
   If, over the 2030s, commercial SMRs or advanced reactors genuinely demonstrate:
   • Much lower costs,
   • Proven delivery at scale,
   • Strong safety and waste performance,
     then it would be prudent for Australia to have the option to participate.
3. The smart move is to keep nuclear on the table, not bet the farm on it
   That means:
   • Removing absolute legal prohibitions in favour of tightly controlled frameworks,
   • Building up regulatory literacy and capability slowly,
   • Watching global experience carefully before committing large capital.

In other words: nuclear should neither be our main plan nor permanently ruled out. It is best thought of as a potential future layer of firm, clean capacity – especially for energy-intensive industry – if the economics and technology mature in our favour.

The real decisions we can’t avoid in the 2020s

While the politics fixate on “for or against” nuclear, the decisions that will actually determine Australia’s energy future over the next two decades look more like this:

1. Do we follow the least-cost system plan or drift?

AEMO’s ISP lays out a clear “optimal development path” to net zero by 2050 that keeps the lights on at lowest cost: renewables + storage + transmission + flexible gas.(AEMO)

Choosing not to follow that path – or allowing approvals, social licence and investment bottlenecks to stall it – isn’t neutral. It nudges us toward higher prices, more volatility and more emergency interventions.

2. Will we treat transmission and storage as nation-building?

Our current grid was built around coal. Re-wiring it will require:

• Accepting that some major transmission projects are as strategic as highways and rail,
• Paying for them in a way that is transparent and fair,
• Working seriously with communities on route selection, compensation and environmental safeguards.

If we fail here, we invite South Africa-style constraints on future growth – not because we lack resources, but because we failed to connect them.

3. Can we design markets that reward reliability and flexibility, not just megawatt-hours?

The Texas 2021 crisis showed what can happen when markets are built for average conditions and short-term prices, not resilience.

Australia needs to:

• Reward capacity, flexibility and system strength (not only energy output),
• Bring demand response and consumer energy resources into the mainstream,
• Align market signals with the net-zero trajectory to avoid stranded assets and chaotic exits.

4. Will we integrate energy with our broader industrial and regional strategy?

Energy policy is also:

• Industrial policy – green hydrogen, critical minerals and advanced manufacturing all live or die on access to clean, reliable, competitively priced electricity.
• Regional development policy – Renewable Energy Zones, new transmission lines, batteries and potential future nuclear or hydrogen hubs will redraw economic maps.
• Housing and planning policy – where Australians live and how they move will shape demand peaks and infrastructure needs.

Ignoring these linkages is a recipe for stop-start projects and missed opportunities.

If we keep doing what we’re doing now…

If Australia continues on a business-as-usual path, without faster and more disciplined investment in infrastructure and system design, several outcomes are likely:

• Rising reliability risk as coal units fail more often before enough firm capacity replaces them.
• More price spikes and political interventions, undermining investor confidence.
• Lost industrial opportunities, as global capital increasingly chases jurisdictions with clean, secure, predictable energy.
• Greater vulnerability to climate and trade shocks, with exporters exposed to carbon border adjustments and global reputational risk.

That’s the trajectory South Africa and others have shown us in sharp relief: once energy unreliability becomes baked into an economy, clawing your way back is expensive and slow.(FNB)

If we make the hard decisions now…

If, instead, Australia:

• Builds out the transmission, storage and flexible capacity laid out in the ISP,
• Treats energy infrastructure as a long-term economic investment, not a short-term political football,
• Keeps options like nuclear available for the long term while focusing current effort on deployable, least-cost solutions,

then we can:

• Deliver a system that is cleaner, more reliable and ultimately cheaper than clinging to ageing coal,
• Support new waves of advanced manufacturing and value-added exports, rather than just shipping raw materials,
• Turn our extraordinary solar and wind resources into a genuine competitive advantage, not a missed opportunity.

That is the real decision in front of the country. It isn’t simply “nuclear vs renewables”. It’s whether we are prepared to invest in the boring but essential infrastructure, governance and market design that make any technology mix actually work.

Nuclear may yet play a role in Australia’s long-term future. But whether or not it does, the countries that thrive in the next decades will be those that made disciplined, evidence-based decisions about their energy systems now, not those that waited for a perfect technology or a painless solution that never arrives.