Three Plans, One Grid
Australia has three competing visions for its energy future. Labor’s scattered renewables. The Coalition’s nuclear gamble. The MMC’s desert plan. Only one of them gets to sub-10¢/kWh delivered across the country. This memo compares all three — on cost, timeline, geography, farmland impact, coal exit strategy, and what each plan does to your power bill.
1. The Real Question
Every energy debate in Australia eventually collapses into a fight about technology — renewables versus nuclear, solar versus coal, batteries versus pumped hydro. The technology fight is the wrong fight. The right question is simpler and harder:
What is the lowest long-run cost of firm, clean, 24/7 power delivered to Australian households and industry — and which plan actually gets there?
Firm power means power available on demand, not just when the wind blows or the sun shines. Clean means zero or near-zero carbon emissions. 24/7 means continuous — the kind of power that runs hospitals, factories, data centres, and the EV charging network at 2am. And delivered means at the power point, not at the generator — inclusive of transmission, distribution, and retail margins.
The target this memo uses as the benchmark is sub-10¢/kWh delivered to Australian households and industry. That is roughly half the current average retail price. It is the price at which EV adoption stops being a lifestyle choice and becomes the obvious economic decision. It is the price at which Australian manufacturing becomes internationally competitive on energy cost. It is the price at which regional Australia gets the same power economics as capital cities. It is an engineering target, not a political promise — and the three plans perform very differently against it.
2. How Australia’s Grid Works Today
Before comparing three plans for changing the grid, it helps to understand what the grid actually is and why it works the way it does. This is the foundation chapter. A dedicated explainer memo goes deeper. → See: How the NEM Works — MMA Memo forthcoming.
2.1 The National Electricity Market
The National Electricity Market (NEM) is the interconnected electricity system covering Queensland, New South Wales, Victoria, South Australia, and Tasmania — home to about 80% of Australia’s population. Western Australia runs a separate grid (the SWIS). The Northern Territory is largely off-grid from the NEM. The NEM is one of the longest AC electricity systems in the world by geographic extent — approximately 5,000 km from Cairns to Port Augusta.
The NEM dispatches electricity in five-minute intervals through a central market operated by AEMO (the Australian Energy Market Operator). Generators bid their output into the market. AEMO dispatches the cheapest available generation to meet demand at every moment. The wholesale price varies from negative (when there is surplus generation) to capped at $16,600/MWh during extreme scarcity events.
2.2 The Firm Power Problem
Solar and wind are the cheapest generation technologies on a per-MWh basis when they are generating. But they are not always generating. Solar generates during the day and not at night. Wind generates when the wind blows and not when it doesn’t. This intermittency is manageable at low penetration levels — other generators fill the gaps. At high penetration levels, it creates a structural problem: the grid needs firm, dispatchable generation to maintain supply when renewables are unavailable.
Today, that firm generation is provided primarily by coal and gas. As coal plants retire, the firm generation gap widens. The central challenge of the energy transition is not installing renewable generation — Australia is doing that at pace. It is replacing the firm capacity that coal provides with something else that is clean and affordable. The three plans answer this question very differently.
2.3 The Transmission Bottleneck
Generation and consumption are often far apart. Generation is built where the resource is — coastal wind zones, inland solar farms, river valleys for hydro. Consumption is concentrated in cities. Transmission lines move power from generation to consumption. They are expensive to build, slow to approve, and increasingly contested by the communities whose land they cross.
AEMO’s 2024 Integrated System Plan identifies 4,581 km of new transmission lines required to meet Australia’s 2030 renewable targets. Those lines cost money — and that cost ultimately appears in your power bill. The 2026 cost estimate for transmission infrastructure is 25–55% higher in real terms than it was in 2022. The transmission problem is not a detail. It is a central driver of delivered electricity cost — and it is the problem that neither Labor nor the Coalition has solved at the geographic level.
→ See: The Transmission Cost Crisis — MMA Memo forthcoming.
3. Plan A — Labor’s Rewiring the Nation
3.1 What the Plan Is
Labor’s energy plan, re-confirmed after the May 2025 election landslide, centres on three commitments: 82% renewable electricity in the NEM by 2030, $35 billion in transmission investment to connect new renewable zones to population centres, and a suite of household and industrial support programs to manage the transition.
The generation strategy is dispersed. Renewable Energy Zones (REZs) are designated across New South Wales, Victoria, Queensland, and South Australia — wind farms on ridges and coastal zones, large-scale solar on agricultural and semi-arid land within transmission reach of existing grid infrastructure. The Capacity Investment Scheme underwrites revenue for new storage and dispatchable renewable projects.
The household support package includes the $2.3 billion Cheaper Home Batteries Initiative (30% installation rebate, one million battery systems by 2030) and the $1.8 billion Energy Bill Relief Fund ($150 rebates for eligible households through 2025). The Green Iron Investment Fund ($1B) and the Hydrogen Production Tax Incentive ($2/kg for ten years to 2030) address industrial decarbonisation.
3.2 What It Costs
The headline transmission commitment is $35 billion — $20 billion through the Rewiring the Nation fund and a further $15 billion for priority interconnectors. CSIRO’s GenCost modelling estimates the delivered electricity cost at approximately $91/MWh (9.1¢/kWh) inclusive of transmission by 2030. That is at the edge of the sub-10¢ target — but it is a wholesale and transmission cost estimate, not a retail delivered cost. Retail delivered cost includes distribution network charges, metering, retail margins, and environmental levies. The current gap between wholesale and retail electricity in Australia is approximately 15–20¢/kWh. Labor’s plan does not address the retail pricing structure. → See: Redesigning the Electricity Pricing System — MMA Memo 12 forthcoming.
Transmission costs have blown out 25–55% in real terms since 2022 due to competition for skilled labour, global supply chain pressure on materials, and the sheer volume of transmission work occurring simultaneously across the NEM. The 4,581 km of new lines required by 2030 is an enormous construction task — and each kilometre through agricultural land requires planning approval, landholder negotiation, and community consultation that takes years, not months.
3.3 Where It Falls Short
Geography. Labor’s plan builds generation near existing population centres and transmission infrastructure — because that is where the approvals process is fastest and the grid connection is cheapest in the short term. But it is not where the best solar resource is. The best solar resource in Australia is in the interior — the Pilbara, the Gibson Desert, the Simpson, the Great Sandy. Labor’s plan does not go there. It builds on farmland in the Hunter Valley, the Riverina, the Darling Downs — productive agricultural country where community opposition is building and planning delays are accumulating.
Execution risk. Australia needs to install 40 wind turbines and 22,000 solar panels every single day to reach 82% renewable by 2030. It currently has a skilled labour shortage of at least 43,200 workers in the critical technical roles required. It is not on track to meet the 2030 target on current trajectories.
Retail price. Labor’s plan has not produced falling retail electricity prices. The household rebates acknowledge this implicitly — you do not need a $150 rebate if power is already cheap. The plan assumes that enough renewable generation will eventually drive wholesale prices low enough to flow through to retail. The retail pricing structure — with its network charges, environmental levies, and retail margins that are largely independent of wholesale generation cost — is not being reformed. This is the price problem Labor has not addressed. → See: Redesigning the Electricity Pricing System — MMA Memo 12 forthcoming.
EV adoption. At 25–30¢/kWh retail, charging an EV is still competitive with petrol — but only marginally so in some use cases. At 10¢/kWh retail, the EV economics are overwhelming: 4–5x cheaper per kilometre than petrol at current prices, with no servicing costs. Labor’s plan does not identify cheap delivered electricity as the primary lever for EV adoption acceleration. It relies on rebates and vehicle efficiency standards instead. Rebates are a one-time subsidy. Cheap power is a permanent structural incentive.
| Plan A — Labor Scorecard | |
|---|---|
| Technology direction | ✔ Correct — renewables are the right answer |
| Geography | ⚠ Wrong — farmland and coastal zones, not desert |
| Transmission approach | ⚠ Expensive — $35B, 25–55% cost blowout, community opposition |
| Firm power solution | ⚠ Partial — batteries and Snowy 2.0, insufficient at scale |
| Coal exit strategy | ⚠ Legislation-led, creates gap risk |
| Retail price trajectory | ⚠ Not addressed — rebates mask the structural problem |
| Sub-10¢/kWh delivered? | ⚠ Unlikely — retail structure unreformed |
| 2030 target achievable? | ⚠ At risk — planning delays, labour shortage |
4. Plan B — The Coalition’s Nuclear Plan
4.1 What the Plan Was
The Coalition’s energy policy, announced ahead of the 2025 federal election and rejected by voters in Labor’s landslide victory, centred on seven government-owned nuclear reactors at the sites of retiring coal power stations. The plan called for a 2050 energy mix of 54% renewables, 38% nuclear, and 8% gas and storage. It abandoned Australia’s 2030 emissions target and proposed extending coal-fired generation to bridge the gap until nuclear came online. The total announced cost was $331 billion (AUD).
The plan has formal policy status. It is recorded, costed (after a fashion), and represents the position of the alternative government of Australia. It is included here because it will return as a policy option if Labor loses office — and because it illuminates, by contrast, what the right and wrong questions are in Australian energy policy. → See: The Nuclear Cost Reality — MMA Memo forthcoming.
4.2 What It Costs
The Coalition’s own figure was $331 billion total. Their modelling firm Frontier Economics claimed this was $263 billion cheaper than Labor’s renewables plan — but that comparison rested on assumptions about power demand reduction and cost trajectories that independent analysts rejected.
CSIRO’s GenCost modelling — Australia’s most authoritative independent energy cost analysis — found that nuclear power would require a price of $145–$238/MWh to recover its costs, compared to approximately $91/MWh for the renewables-plus-storage system. Nuclear electricity is roughly 50–160% more expensive than the renewable alternative in Australia’s specific context. The Coalition disputed the CSIRO findings. The CSIRO is correct, and its methodology is based on international construction experience in comparable economies (US, UK, Finland, France) where nuclear cost overruns are documented and severe.
Two of the seven proposed reactor sites sit on active geological fault lines. Anti-seismic engineering for nuclear facilities significantly increases capital cost beyond the already-stretched Coalition assumptions.
4.3 The Timeline Problem
The Coalition claimed the first reactor would be operational by 2035–2036. CSIRO’s analysis finds the earliest possible timeline for a first Australian nuclear reactor — given that Australia has no nuclear industry, no regulatory framework, no trained workforce, and no fuel supply chain — is the 2040s. Nuclear technology has been banned in Australia since 1998. Building the regulatory and industrial foundation from scratch takes fifteen years minimum — and that is before construction begins.
During the gap between now and whenever nuclear comes online, coal plants must stay open. The Coalition explicitly planned for this. Extended coal operation means continued carbon emissions, continued maintenance costs on ageing plant, and continued exposure to coal price volatility. It also means two decades of high retail electricity prices — because coal at 8–12¢/kWh wholesale is more expensive than new solar and wind, and the network charges that sit on top of wholesale do not fall just because the government has announced a nuclear plan.
4.4 What the Nuclear Argument Gets Right
The nuclear argument is not entirely wrong. Its core claim — that the grid needs firm, dispatchable, zero-carbon baseload generation and that renewables-plus-storage have not yet proven they can fully replace coal on this dimension — is a legitimate engineering concern. Nuclear provides exactly what coal provides: continuous, weather-independent, large-scale generation that can be scheduled and dispatched. The argument for nuclear is the argument for firm power.
The MMC plan answers this argument with Alice Hub PHES at 40 GW output and 30 TWh of storage — more firm dispatchable capacity than all of Australia’s current coal fleet. The answer to the firm power problem is not nuclear. It is pumped hydro at continental scale, charged by continental-scale desert solar. → See: Alice Hub PHES — MMA Memo 5.
| Plan B — Coalition Nuclear Scorecard | |
|---|---|
| Technology direction | ⚠ Firm power argument valid; nuclear is the wrong solution for Australia |
| Cost | ✘ $331B announced; CSIRO says $145–238/MWh vs $91/MWh renewables |
| Timeline | ✘ First power 2040s at earliest. Coalition claimed 2035–2036. |
| Coal exit strategy | ✘ Extends coal for 15–20 years during nuclear build |
| Retail price trajectory | ✘ Higher — nuclear at $145–238/MWh cannot deliver sub-10¢ retail |
| Sub-10¢/kWh delivered? | ✘ No. Not remotely achievable under nuclear pricing. |
| Community acceptance | ✘ State governments opposed; seismic risk at two sites; waste unresolved |
| Verdict | ✘ Wrong technology, wrong cost, wrong decade |
5. Plan C — The MMC Desert Plan
5.1 What the Plan Is
The MMC energy plan is not a generation plan bolted onto an existing grid. It is a continental infrastructure system that integrates generation, storage, transmission, transport, water, and manufacturing into a single build programme. The energy component cannot be fully understood in isolation — but its core logic is simple enough to state in one paragraph.
Build large-scale solar generation in the Australian desert, where the solar resource is 2,200–2,800 kWh/m²/year — among the highest in the world. Store surplus generation in the Alice Hub pumped hydro system at 40 GW output and approximately 30 TWh of storage capacity — enough to run Australia’s entire current electricity demand for several weeks. Deliver power to population centres via the MMC HVDC transmission spine — running inside the viaduct corridor that is already being built for transport purposes, eliminating the standalone transmission cost. Price the delivered power at the true cost of production: 4–7¢/kWh wholesale, targeting sub-10¢/kWh retail after network charges are reformed.
Keep coal-fired generation running until the MMC system has sufficient capacity to replace it on economic terms — not on a legislated timeline. When desert solar delivered at 4–7¢/kWh is cheaper than coal at 8–12¢/kWh, coal closes itself. No compensation fight. No stranded asset liability. No blackout risk from premature closure.
5.2 The Geographic Logic
Both Labor and the Coalition make the same geographic mistake: they build generation near where people are, not near where the sun is. This mistake has consequences.
Building near people means building on productive agricultural land, through farming communities, over ridgelines visible from coastal towns, and into transmission corridors that cross the same contested terrain that has slowed planning approvals for a decade. It means competing with farming for land tenure. It means paying rural landholders to host infrastructure they did not choose and their neighbours resent. It means running $35 billion of new transmission towers through country that generates votes for whoever promises to stop them.
The Australian interior solves all of this. The Great Sandy Desert, the Gibson Desert, the Simpson, the Pilbara interior — these are Crown land in the main, with minimal competing land use, no residential communities in the transmission path, no ridgeline visual impact concerns, and no votes to lose from a wind turbine on the horizon. The solar resource is also materially better: 2,400–2,800 kWh/m²/year versus 1,600–1,800 kWh/m²/year in the coastal REZ zones Labor is developing.
→ See: Solar Sizing — 1,000 GW — MMA Memo 1. Alice Hub PHES — MMA Memo 5.
5.3 The Transmission Is Already Being Built
The most important cost advantage of the MMC plan is invisible in standard energy policy accounting: the transmission infrastructure is not a separate cost item. The MMC viaduct corridor — already being built to carry five-track transport infrastructure from Melbourne to Brisbane, and subsequently across six continental corridors — carries the HVDC transmission cables inside its structure. The power, water pipe, fibre optic spine, and transport tracks all share the same physical corridor.
The marginal cost of adding HVDC cables to an MMC corridor that is being built anyway is a fraction of the cost of building a standalone transmission line through contested terrain. Labor is spending $35 billion on standalone transmission. The MMC transmission cost is embedded in the corridor programme — which is funded through sovereign instruments at programme scale (see the Funding pillar), not by household electricity bills.
5.4 Coal Exits on Economics, Not Legislation
The MMC plan does not set a date for coal closure. This is a deliberate and important design choice. Legislated coal closure dates create three problems: stranded asset compensation demands from plant owners, blackout risk if replacement capacity is delayed, and political backlash from coal communities that feel the decision was made for them rather than by the market.
When the MMC delivers desert solar at 4–7¢/kWh wholesale, coal plants running at 8–12¢/kWh wholesale cannot compete in the AEMO dispatch market. They reduce to peaking and backup roles, then retire when their owners decide the economics no longer support continued operation. This is how coal exited most electricity markets historically — on price, not on mandate. The MMC accelerates this process by driving the wholesale price down faster and further than any other plan.
| Plan C — MMC Desert Plan Scorecard | |
|---|---|
| Technology direction | ✔ Renewables + PHES — correct and proven at component level |
| Geography | ✔ Desert — best solar resource, no community conflict, Crown land |
| Transmission approach | ✔ Embedded in corridor — marginal cost, not standalone $35B |
| Firm power solution | ✔ Alice Hub PHES 40 GW / 30 TWh — replaces all coal firm capacity |
| Coal exit strategy | ✔ Price-driven — no legislation, no compensation, no gap risk |
| Retail price trajectory | ✔ Sub-10¢/kWh target — engineering outcome, not subsidy outcome |
| Sub-10¢/kWh delivered? | ✔ Yes — with retail pricing reform (Memo 12) |
| Community acceptance | ✔ Generation in desert — no farmland conflict, no coastal opposition |
6. The Price Problem Labor Has Ignored
Australia’s retail electricity price is not primarily determined by the wholesale cost of generation. It is determined by the wholesale cost plus network charges (poles and wires) plus environmental levies plus metering costs plus retail margins. The wholesale generation cost is typically 30–40% of the total retail bill. The other 60–70% is network and retail.
This means that even if Labor successfully drives the wholesale generation cost to $91/MWh through its renewable programme, the retail price to households stays at 25–30¢/kWh because the network and retail components do not fall. Labor’s $150 household rebate acknowledges this without solving it. It is a band-aid, not a structural fix.
The consequence for EV adoption is significant and underappreciated. At 25–30¢/kWh retail, charging an EV costs approximately 3.5–4.5¢ per kilometre. A petrol car at $2/litre costs approximately 10–14¢ per kilometre. The EV is cheaper — but the gap is not overwhelming, and the upfront purchase cost of an EV remains a barrier for many households.
At 8–10¢/kWh retail — the MMC target — charging an EV costs approximately 1–1.5¢ per kilometre. Against petrol at 12¢ per kilometre, the EV is between 8 and 12 times cheaper to run per kilometre. At that price differential, the EV purchase decision is not a lifestyle or environmental choice. It is an obvious financial decision. EV adoption accelerates without rebates, without mandates, and without a New Vehicle Efficiency Standard. The price is the policy.
The same logic applies to industrial electrification. At 10¢/kWh, Australian manufacturers compete on energy cost with most of the world. At 25–30¢/kWh, they do not. The retail price structure is not an afterthought to the energy transition. It is the mechanism by which the transition actually reaches households, vehicles, and industry.
→ See: Redesigning the Electricity Pricing System — MMA Memo 12 forthcoming. This memo will cover network charge reform, the retail margin structure, time-of-use pricing that rewards EV overnight charging, and the transition from a cost-recovery model to a throughput model as power volumes increase.
7. The Three-Plan Comparison
| Dimension | Plan A — Labor | Plan B — Coalition Nuclear | Plan C — MMC Desert |
|---|---|---|---|
| Primary technology | Wind and solar — coastal and farmland REZs | 7 nuclear reactors + 54% renewables | Desert solar + Alice Hub PHES + HVDC |
| Total programme cost | $35B transmission + generation subsidies (CIS, CEFC) | $331B announced; likely higher per CSIRO | Transmission embedded in MMC corridor; generation funded via sovereign instruments |
| Wholesale generation cost | ~$91/MWh (CSIRO GenCost 2026 incl. transmission) | $145–$238/MWh (CSIRO); Coalition claimed $30/MWh | 4–7¢/kWh ($40–$70/MWh) delivered via HVDC |
| Retail price trajectory | Slow improvement; structural reforms absent; rebates masking | Higher than today until 2040s; coal gap expensive | Sub-10¢/kWh target — engineering outcome with pricing reform |
| Firm power solution | Batteries, Snowy 2.0, gas backup | Nuclear baseload (2040s); coal extension in gap | Alice Hub PHES 40 GW / 30 TWh — replaces all coal |
| Transmission approach | 4,581 km new lines; $35B; 25–55% cost blowout | Uses existing coal site grid connections | HVDC embedded in MMC corridor — shared infrastructure cost |
| Farmland and community impact | High — REZs on agricultural land; growing opposition | Low for generation; coal sites reused | Zero — generation and transmission in desert Crown land |
| Coal exit mechanism | Legislated closure dates; compensation risk; gap risk | Extended deliberately — coal runs to 2040s | Price-driven — coal exits when undercut; no legislation needed |
| First power / major milestone | 82% renewable NEM by 2030 — at risk | First reactor mid-2030s (claimed); 2040s (CSIRO) | Phase 0 operational 2030; Alice Hub Phase 1 2032 |
| EV adoption acceleration | Slow — retail price stays high; relies on rebates | Negative — coal extension keeps prices high to 2040s | Automatic — sub-10¢/kWh makes EV the obvious financial choice |
| Sub-10¢/kWh delivered? | Unlikely without pricing reform | No. Nuclear pricing makes it impossible. | Yes — target and engineering pathway exist |
8. The Verdict
Labor has the right technology and the wrong map. Renewables are the correct answer. Building them on farmland in coastal REZs, running $35 billion of contested transmission through agricultural communities, and leaving the retail pricing structure unreformed is the wrong implementation. The plan will deliver a cleaner grid by 2030 — partially, at significant community cost — but it will not deliver cheap electricity, and without cheap electricity the EV transition is slower and industrial competitiveness is constrained.
The Coalition had the right concern — firm, dispatchable baseload power — and the wrong technology for it. Nuclear in Australia would cost twice the renewable alternative, arrive a decade late, extend coal in the gap, and deliver power at prices that make sub-10¢/kWh retail impossible. The baseload concern is real. The nuclear answer is not.
The MMC plan solves the problem neither major party has named: geography. Move generation to where the sun is, not where the people are. Embed the transmission in infrastructure being built for multiple purposes. Store surplus generation in continental-scale pumped hydro. Let economics close coal rather than legislation. Reform the retail pricing structure so that cheap wholesale power reaches the power point. The result is sub-10¢/kWh delivered electricity, automatic EV adoption acceleration, and a grid that is firm, clean, and cheap — without a dollar of farmland conflict or a single contested transmission tower through productive agricultural country.
The energy transition is not a technology problem. Australia has the technology. It is a geography problem. Both major parties are building generation near people. The MMC builds generation near the sun and delivers it to people. That difference — in location, in transmission cost, in community impact, and in delivered price — is the entire argument.
Coming next: Memo 12 covers the electricity pricing system redesign — how to restructure network charges, retail margins, and time-of-use pricing so that the sub-10¢/kWh wholesale price actually reaches the household power point and the EV charger.
→ Additional memos flagged in this document:
- How the NEM Works — a plain-English explainer for non-technical readers
- The Transmission Cost Crisis — why 4,581 km of new lines costs more than the generation they connect
- The Nuclear Cost Reality — a full treatment of CSIRO GenCost vs Coalition assumptions
- Redesigning the Electricity Pricing System — Memo 12
- EV Transition Economics — why price is the only lever that matters at scale