Switching from Fossil Fuels to Alternative Energy Sources Will Result in Increased Power Costs, Says Energy Expert
According to Alinta Energy CEO Jeff Dimery, building additional generation capacity will result in significant costs for consumers, and he believes that nuclear energy is not the solution.
Speaking at the National Press Club on April 10, Dimery stated, “Australians will have to pay more for energy in the future.” He emphasized that expenditures on energy, energy services, and energy infrastructure will increase relative to GDP. Whether through taxes, purchasing electric vehicles, batteries, solar panels, or paying higher electricity bills, the overall cost will rise.
Dimery highlighted the escalating construction costs of new projects, which are becoming unaffordable for electricity generator firms due to low retail margins.
He cited examples of rising costs for energy projects, such as the development of a large battery that went from $1.5 million per MW to $1.7 million per MW. The replacement cost of a brown coal-fired power station has also significantly increased over just two years.
Dimery expressed concerns about the poorly planned rollout of renewables in Australia, leading to grid issues, curtailment, and decreased profitability. He mentioned that rooftop solar energy generation causing an overflow of energy, resulting in large-scale renewables being shut down during peak production times.
He stressed the need for larger energy participants to address the challenges of the energy transition and empower consumers through various initiatives like community batteries and peer-to-peer energy trading.
Dimery criticized the idea of replacing coal plants with nuclear power, likening it to “looking for unicorns in the garden.” He noted the legal barriers in Australia for nuclear power and highlighted the need to focus on current solutions instead of waiting for hypothetical future technologies.
Dimery concluded by stating that the era of easy energy wins is over, and the future will require significant efforts to transition to sustainable energy sources.
In addressing the profitability of energy companies, Dimery refuted the notion that increased energy prices equate to super profits, emphasizing that retail margins are at their lowest levels according to the ACCC. He also mentioned the minimal profit margins for electricity retailers compared to the average annual household bill.
