Alinta chief executive Jeff Dimery warns power prices will rise in the future

The boss of one of the nation’s biggest energy companies says Australians will be paying more for power in the future, in a sobering message to households already struggling with sky-high bills.

Alinta Energy chief executive and managing director Jeff Dimery said the rising cost of capital, labour and transmission meant consumers would be slugged more for electricity.

But he isn’t even contemplating nuclear as a possible solution, comparing the pursuit of the energy to “looking for unicorns in the garden”.

The energy industry veteran used a speech to the National Press Club on Wednesday to deliver some “truths” on the monumental task of transitioning Australia’s energy grid to renewables.

In a blunt message, Mr Dimery said without “significant changes” Australia would struggle to reach its net zero by 2050 target.

He said “modest” retail margins and rising project costs were major barriers to large-scale investment in green energy projects.

As one example, Mr Dimery said replacing Alinta’s Loy Yang B coal-fired power station in Victoria’s Latrobe Valley with pumped hydro and offshore wind would cost roughly $10 billion – $2 billion more than was estimated just two years ago.

But his most sobering message was for households, which have been struggling with high power bills ever since Russia’s invasion of Ukraine in early 2022 sent global energy prices soaring.

“Australians will have to pay more for energy in the future,” Mr Dimery said.

“We will spend more as a percentage of GDP on energy, energy services and energy infrastructure.

“Whether we pay through the tax base or pay the large upfront cost of an EV, or batteries and solar, or we are paying more for electricity from the grid — we will all pay more in aggregate.

“We need to be honest about that, and I don’t think the average Australian is prepared for that reality.”

Mr Dimery said while households might be paying more for electricity, they could save on petrol by switching to an electric car.

The warning of more energy price pain is a blow to the Federal Government, which went to the last election promising a $275 reduction in power bills by 2025.

Mr Dimery also waded into the nuclear debate as the federal Opposition prepares to unveil its policy for the controversial energy source within weeks.

The Coalition will identify around half a dozen retiring coal-fired power stations as candidates to be replaced with nuclear generators.

Loy Yang B, which is scheduled for closure in 2047, is one of three remaining coal-fired power plants in the Latrobe Valley.

Mr Dimery said Alinta had not turned its mind to the possibility of nuclear power given it remains banned in Australia.

He suggested that exploring the option while the John Howard-era nuclear moratorium was in place was like “looking for unicorns in the garden”.

“You could imagine our shareholders and our board wouldn’t be too impressed if the management team was sitting around contemplating building power stations that are not legal,” he said.

“It wouldn’t be a great use of our time.”