We now know Labor’s renewables dream is based on economic modelling that isn’t as ‘unimpeachable’ as Chris Bowen claims it to be
Despite Bowen's insistence, most Australians know that computer modelling of future prices are not facts but predictions that must be truth tested against observations made on the ground. Observations of the upward trend in household electricity bills, for example. The cost of storage and associated transmission lines incurred before 2030 are treated as sunk costs, even though investors will expect a return over the asset's life.
This approach allows financially unviable projects to get approval, leading to costs being transferred to consumers. The GenCost report would likely have found nuclear was considerably cheaper if it had examined a mass-produced reactor like GE Hitachi's BWRX-300, which is about to start production in Canada for installation at Darlington Point in Ontario.SMRs like the BWRX-300 will be made on production lines similar to those used to manufacture aircraft.
In reality, world gas prices have already returned to levels close to those before Russia’s invasion.The CIS report is available online.The organisation’s expertise is in scientific research and innovation, not microeconomics.