Peter Dutton's nuclear power plans are an ironic backflip to ...

Ben Chifley is considered one of the giants of Labor politics.

As treasurer, he guided the nation through the arduous task of financing World War II and later, after John Curtin's death, went on to lead the country in the immediate post-war era.

But, in August 1947, concerned that rival banks would undermine the roles of the Commonwealth Bank and the federal government in operating monetary policy, he announced a plan to nationalise Australia's banking system.

Politically, it was a disaster after the High Court ruled against it. From wartime hero, Labor was swept from power in the 1949 elections by the Robert Menzies-led Liberal Party and spent the next 23 years in the political wilderness.

With a mantra of small government and minimal interference in the economy, the Liberal Party has long stood for the rights of the individual and free enterprise.

Until last week. Rather than allowing market forces to dictate how Australia should respond to the global challenge of reducing greenhouse emissions, the Coalition under Peter Dutton has turned that ethos on its head with a plan to embark upon one of the biggest government-funded investment programs in history.

It is a radical plan that not only throws future private investment in the energy sector into a state of uncertainty, it threatens to undermine the value of privately owned renewable energy investment made during the past 15 years.

On some estimates, depending upon how big the nuclear rollout will be, a capital expenditure program of more than half a trillion dollars will be required to fund this sudden shift in energy policy.

To operate efficiently and to minimise cost, nuclear power plants need to be permanently going full pelt, leaving little room for any other source of power generation.

If Dutton's nuclear ambitions come to fruition, control of Australia's energy market, having been privatised largely under Coalition-run state governments since Jeff Kennett made the first move in Victoria, will end up in the hands of the federal government.

AGL's Loy Yang power station in Victoria is among the locations suggested by the Coalition for future nuclear power sites.(AAP: Julian Smith)

It is not the first time the Coalition has up-ended its free-market ethos when it comes to energy policy.

Under Tony Abbott, Australia abandoned the carbon tax established under the Gillard government which put a price on carbon emissions. Instead, it was replaced by a direct subsidy program, the Emissions Reduction Fund, which allocated billions of taxpayer dollars to private enterprise.

Australia's energy and climate policies have been a mess, the battleground of a bitter raging war between both sides of politics for most of the past 20 years. It has resulted in an underinvestment in new electricity generation as the industry has watched policy lurch between the two extremes.

While many senior Coalition members have openly questioned whether climate change exists with Abbott labelling climate science as "crap", both sides of politics finally appeared to be on a unity ticket in November 2021 when then-prime minister Scott Morrison signed up to the Paris agreement on emissions reductions.

Since then, gas shortages, Russia's invasion of Ukraine and the shutdown of our aging coal-fired generators have sent retail electricity prices soaring.

While Dutton claims the first nuclear station could be operational by midway through the next decade, realistically, they are likely to take far longer.

By that stage, however, almost all our coal-fired plants would have been retired, creating massive energy shortfalls in the meantime. Those supporting the opposition and its nuclear policy argue the coal generators' life should be extended.

That means either building new ones or refurbishing the existing ones at enormous expense which would then detract from the economics of replacing them with nuclear. And our emissions reduction targets would be blown.

Whenever any kind of debate on nuclear power plants erupts, France enters the conversation.

More than 70 per cent of France's electricity is generated from nuclear power plants. And as the proponents will highlight, the French enjoy much lower power prices than most of their European neighbours who now rely on imported fossil fuels.

That's because the vast bulk of them were built decades ago, they are all government-owned and their costs largely have been sunk.

France has more than 55 nuclear plants dotted around the country that are run by a government entity EDF.

They were built in reaction to the 1973 energy crisis under a plan put forth by then prime minister Pierre Messmer given the country had little if any fossil fuel resources.

Economists Steven Hamilton and Luke Heeney argue that France has made its nuclear system work largely because the technology dominates the power generation system and because it has neighbours that can absorb the excess.

"Countries like France can only make nuclear work by exporting large amounts of energy when it's surplus to demand," they wrote recently.

France's real-world experience with nuclear power is different to the Coalition's hypothetical offering in Australia.(Reuters: Sarah Meyssonnier)

Almost half the plants are more than 40 years old and many are in need of upgrades, a process that has been delayed by debate about whether they should be decommissioned or their life extended.

In September 2022, more than 30 plants were shut because of technical or maintenance problems while the extended European drought created havoc with plant cooling facilities.

Water is essential for nuclear plants, a challenge the opposition appears to have overlooked in its plan to roll them out on the world's driest continent.

Instead, it has opted to place them on the sites of retired coal-fired generators. But those sites were selected because they were close to coal fields.

For all the talk about the cost of building nuclear stations, the cost involved in running them has taken a back seat.

They are horrendously expensive to build. But, even if you don't take the build cost into account, they are hugely expensive to run.

Even when they are running flat out, the cost of electricity generation is much higher than for renewables, according to the CSIRO and most reputable economists and analysts.

To maximise their efficiency, they need to be running full-time at maximum capacity. But the opposition has hinted nuclear power would somehow complement renewables, that they could switch on to fill the breach when renewables fall short.

As investment banker David Leitch argues, renewables flood the system during daylight hours, sending wholesale power prices to zero and even lower on many days, which would cripple the economics of nuclear power.

"Generation technology choices do not live in isolation from the system in which they operate," he says.

"For those not already tired of the debate around small, modular reactors, the fact is they are not a technology designed to deal with the reality of a system that has lots of renewables and specifically lots of solar."

That means much higher generation prices on top of an extraordinarily expensive and long build time that will come into effect long after our coal-fired generators have bitten the dust.

Chifley's experience still looms large over Labor. So, for the next few years, prepare to be entertained by a Labor Party preaching market forces butting heads with a Coalition hell-bent on nationalising a key segment of the economy.

The irony.