Australia will have to seriously consider nuclear power as an option if there is no breakthrough on baseload clean energy, Energy Minister Martin Ferguson says.
The Committee for Economic Development of Australia (CEDA) released an energy research paper, entitled "Policy choice not economic inevitability", on Wednesday.
It examined the Australian electricity market and found price rises had been the most significant where state governments had maintained ownership of electricity assets.
CEDA chief executive Stephen Martin said "perverse incentives" of state government owned network service providers to grow their regulatory asset base was a significant contributor to price increases for households.
"State governments are effectively using their utilities as a means of indirect taxation, in part because they get extraordinary income that private operators cannot get," Mr Martin said.
The paper was in line with the Energy white paper, released by the federal government last week when it came to the roll-out of smart metres, time-of-use pricing and better community education.
But Mr Martin said the exclusion of nuclear energy in the white paper was "a serious omission".
"If Australia is serious about mitigating the effects of climate change then nuclear must be on the table, it has the potential to provide low-cost, clean, baseload energy and will be an important back-up if other renewable or clean energy options do not come to fruition," he said.
"It is important that steps are taken now, such as the development of a regulatory framework, to ensure this option can be utilised in the future if necessary."
Mr Ferguson said the white paper made it clear nuclear power was not needed as part of Australia's energy mix, given Australia's abundance and diversity of low-cost and reliable energy sources, both fossil fuel and renewable.
Nuclear power was not economically competitive and did not have the required community support, he said.
"But the community will continue to have these debates, just like we have had a debate over the previous decades about uranium mining," Mr Ferguson said.
"The Australian government's responsibility is to test all forms of clean energy and if at some point in the future we don't get the breakthrough on baseload clean energy - Australia will need to think seriously about considering nuclear," he said.
The minister said the government agreed with CEDA's position on the increased deployment of clean energy technologies.
"We agree that low emissions technologies have a role to play in meeting growing energy demand while reducing greenhouse gas emissions but is important that market drive this change."