Doorstop with Ken O'Dowd MP, Member for Flynn - Boyne Island Smelter, Gladstone


22 August 2019


KEN O'DOWD: Welcome to Boyne Australia. I have today with me the Minister for Energy and Emissions Reduction Angus Taylor. I'm pleased to have him come here and make the visit to Boyne Smelter - very, very important for jobs in Central Queensland, and of course Boyne Island itself. Over a thousand jobs, with permanent jobs, and also casual contractors who work here most of the year round. It's very important that this plant keeps going and operating because it's one of the last manufacturing jobs we have in Australia. I think the CRA Chairman put us on notice a couple of weeks ago where he said - Boyne Smelter, because of the energy cost, are: “skating on thin ice”. That was his words, skating on thin ice. So that's why I asked Angus to come to Gladstone, come to Boyne Smelter to discuss the issue. And I think it's obvious that the Queensland Government, the Federal Government, and Rio Tinto must sit down and work out our issues around energy and the cost of energy. That's what we did today initially with Boyne Smelter management. And today, we'll take this forward and work with the Queensland Government to reduce the power prices for Boyne Smelter and keep the industry alive. It's an important part of the chain from [inaudible], from Weipa, Gladstone, to export to countries around the world, and also of course to Tasmania and New Zealand. They get their products from here from Boyne Smelter. So without any further adieu, over to you Angus.

ANGUS TAYLOR: Thanks Ken. It's absolutely fantastic to be here at Boyne Smelter in Gladstone with the hardworking Member for Flynn, Ken O'Dowd, who's been returned here recently at the election with an increased majority. Gladstone is the energy capital of Australia. It's a hub for electricity, for gas, and for downstream industries that rely on affordable, reliable energy, as Ken has pointed out. Nowhere is that more true than the Boyne Smelter where I am here right now. We are absolutely committed to doing everything in our power as a Federal Government to ensure energy intensive manufacturing and processing survives and prospers in Australia, including here in Gladstone. That requires collaboration with the private sector and with state governments. They need to be as committed to affordable reliable energy as we are. That's why we're here today talking with Rio Tinto management, the Boyne Smelter management, and I'll continue to have discussions with other energy intensive private sector businesses like this one over the coming months as we continue that focus.

Now, I do want to make a couple of comments about reliability in the energy grid and the report that's been put out by AEMO today. There is no question there are real risks to our electricity grid going into summer. Nowhere is that more true than Victoria, where we saw last year 200,000 consumers lose their power - hardworking households and small businesses, as well as industry, were affected by the blackouts in January earlier this year, last summer that just passed. This is a very serious issue, and we face similar risks as we go into this summer. We stand ready, as I said, to work with all state governments to ensure we have affordable, reliable power - but at the end of the day, those state governments have to do the right thing. It's fine to invest in solar and wind if there is a plan to ensure we've also got affordable, reliable power. The truth of the matter is the Victorian Government is determined to add 5,000 megawatts - an unprecedented amount - of solar and wind into its system, as we've seen in South Australia, without a plan for reliability and affordability. Victorians are going to pay the price this summer and they'll pay the price in future summers unless the Victorian Government comes to its senses and says we need a balance in our electricity grid between reliable, affordable sources of power like coal and gas, as well as emerging sources of energy including solar and wind, as well as the role that hydro plays, a very important role pumped hydro plays and will continue to play in our system. That balance is crucial, and we call on the Victorian Government to work with us to make sure there's the right balance in the system, and that will ensure that we don't face the sort of risks we're facing this summer as we go into another January, December, February, where we do face very real risks of blackouts.

JOURNALIST: When will the Federal Government announce which projects it will underwrite?

ANGUS TAYLOR: It is important to understand that we stand ready with a series of programs to ensure we've got reliable, affordable power. The first of those is the underwriting program you talked about. Twelve projects, as well as the Collinsville project not far from here, with a mix of different technologies across hydro, gas, and coal. We're working through those as quickly as we possibly can. All of them require collaboration and support from state governments. They require approvals. We'll get those projects - the best of those projects, the ones that get through the appropriate screens - we'll get them up as quickly as we possibly can. But we can only do that with the collaboration of state governments, and we're calling on state governments to work with us closely, to get those projects into the system as soon as possible.

JOURNALIST: What would be the right balance of that mix between hydro, coal and the other?

ANGUS TAYLOR: Every state is different, every state is in a different situation and I'm not going to pre-empt the right outcome in each state. But I'll tell you what the outcome has to be - the outcome has to be that when Australians flick the switch, the lights go on at a price they can afford. That's the outcome, and we'll continue to underwrite, and support projects with private sector investors to ensure that happens. But it can only happen with sensible collaboration from state governments. We're absolutely delighted with the support we've seen from AGL in recent weeks with an extension of the life of Torrens A in South Australia, and Liddell in New South Wales. We've been absolutely delighted that New South Wales has joined with us to form a Liddell Taskforce to ensure we've got the reliable affordable power into the mid-2020s and beyond. But we need similar levels of collaboration from other state governments, including of course Victoria.

JOURNALIST: Who'll be responsible if there are blackouts in Victoria this summer?

ANGUS TAYLOR:       Well if the Victorian Government continues to insist that it can knock down coal-fired power stations and replace them with solar and wind which hasn't got the backup needed to keep the lights on and keep the prices down, then they need to be held to account. It's as simple as that. You cannot shut a power station as big and as important as Hazelwood and attempt to completely replace it with solar cells on people's roofs. Now there's nothing wrong with solar cells on people's roofs but you have to have balance in the system, and the Victorian Government's determination to get rid of its coal-fired power stations prematurely is having an impact on Victorians, and will continue to.

JOURNALIST: When will power bills come down?

ANGUS TAYLOR: Power bills have come down from the 1 July. We've seen in the CPI, the last two quarters, reductions in power bills. We've seen price caps put in place across much of the national electricity market, and those price caps are significantly lower than the previous standing offers. We see the forward market for wholesale price is now coming down, but that relies on state governments doing sensible things, working with us to make sure there's supply coming into the system - dispatchable, reliable supply, the right mix of generation sources in order to ensure those wholesale prices are realised, those lower wholesale prices are realised over the coming years.

QUESTION: Minister, are you agreeing with Ken with his nuclear stance as well. Are you hoping that gets up and running?

ANGUS TAYLOR: I've asked for an inquiry. I mean we obviously have a moratorium and there's no plan to change that moratorium. As we look into the longer term here in Australia, we've got to look at a range of different technologies. We're making very significant investment in hydrogen, in biofuels which continue to play an important role in the Australian mix. We need to explore these technologies and see what potential they offer us over the longer term.

JOURNALIST: Minister, can you tell us a little bit about this morning at Boyne Smelter. What were some of the issues on the agenda about, you spoke to them about? What were you doing here this morning?

ANGUS TAYLOR: The key issue is to make sure we've got the affordable, reliable energy for Gladstone, for this region to ensure that the Boyne Smelter can be here, successful and prospering at maximum volume, producing as much as possible, generating as many jobs as possible, for as many years as possible. That's the focus and we'll do everything in our power to make sure that that's the case.

JOURNALIST: And are they at risk of them not doing that at the moment?

ANGUS TAYLOR: Well they want to do it. There's no doubt about that. I mean, if you look at the nameplates around here it's all about beyond 2030, making sure that this operation is in place for many, many years to come. That's their determination, that's our determination. As I say, we stand ready to work with state governments and the private sector to ensure that energy intensive industries like here in Gladstone survive and prosper for many, many years to come.

JOURNALIST: The report notes that a major problem is ageing coal plants. What contingencies will the Government put in place to fix that shortfall?

ANGUS TAYLOR: A major problem is that we've got state governments forcing intermittent energy into the system and deliberately, prematurely closing coal fired generators and discouraging them from investing to remain in the market for an appropriate period of time. That's the fundamental problem here. And nowhere has that been more true than Victoria where we've seen 5,000 megawatts of intermittent renewables being forced into the system, no plan to back that up, and a ban on onshore gas development and exploration. Let's face it, gas is crucial to ensuring we have the backup we need to keep the lights on, on those really tough days like we saw in January in Victoria last year.

JOURNALIST: Minister, just taking you back to nuclear power. Do you think that's going to push prices down in the region as well?

ANGUS TAYLOR: We've got to explore new technologies, but the focus in the next couple of years has got to be making sure we've got the right balance of fuel sources in our system, that we've got enough affordable reliable power, 24/7 power, coal and gas and hydro in the system, balancing against the very significant investments that we're seeing in solar and wind. If we don't see that, then we risk the lights going out over the summer. So that that's got to be our focus.

JOURNALIST: Minister, are you doing anything else in town today? Will you be visiting the gas plants or anything like that?

ANGUS TAYLOR: Yeah. I’ll continue to visit energy intensive businesses in this area. Gladstone is not only the capital of energy in Australia, it's an energy capital for Australia which covers gas, electricity and downstream industries. It's one of the great energy cities of the world. So for me to spend time here is very, very important. I came here before the election, I committed that this would be a strong focus for me and I'm back here again after the election with the great local member Ken O'Dowd.

JOURNALIST: Minister, you'll be back again then?

ANGUS TAYLOR: I will, I will be back in Gladstone again soon. This is a very, very important city for energy in Australia.

JOURNALIST: Well the Federal Government work with the states on a comprehensive approach to national energy?

ANGUS TAYLOR: We're working with the states every day but we can only work with states that collaborate with us. I mean if you've got a state running its own course, that doesn't have a sensible plan for reliable affordable energy, then the people in those states will pay the price. Now we're not going to put in place a nationwide carbon tax, we're not going to do that. That's what Labor wanted to do. We are not going to do that because that will raise the cost of energy for all Australians. We're certainly not going to do that, but we are going to work with collaborative states that want a plan in place to ensure there's downward pressure on prices and there's reliability in the grid. We call on all states to work with us, as we're working with the Tasmanian Government, the New South Wales Government and the South Australian Government, on a number of projects as well.

JOURNALIST: We've got quite a few renewables happening in this town as well. What's your stance on renewables?

ANGUS TAYLOR: In 2018, we saw the highest level of investment in renewables in the world in Australia. We were double the next country. Australia invested in renewables $400 dollars per person. The next country in the world was Japan on $200. So there's an enormous amount of investment going on in renewables. The challenge is to ensure that we've got affordable, reliable energy. When the sun goes down and the wind doesn't blow, you've got to have affordable, reliable energy at your disposal. That means gas bans have got to go. The moratorium on gas in Victoria must go. That means we shouldn't be shutting coal-fired power stations prematurely. And of course, it means that we've got to make the best use of our hydro resources, which we're doing through Snowy 2.0 and Battery of the Nation in Tasmania.

JOURNALIST: Minister, I've got a question from Townsville as well about renewables. Five major mining industry players are looking to purchase 1 million megawatt hours of renewable electricity every year for a decade to power Mount Isa and Cloncurry. Do you welcome their shift?

ANGUS TAYLOR: I welcome affordable reliable power - I mean, that's what we've got to have here. Can renewables be part of the mix? Of course it can, but has there got to be balance? Yes, there must be a balance in the system. That's what's going to ensure that great industries like the aluminium industry where I'm here today, and the steel industry, and other downstream processing manufacturing across Australia, as well as all those small businesses and households that rely on affordable energy, that's how they're going to get what they need. And there has to be an appropriate sensible balance in the system. We want to work with state governments and the private sector players. We want to ensure that that is the case for many years to come.

JOURNALIST: We spoke about nuclear today, and I guess, the different energy industries. What would a nuclear industry here in Gladstone do? Would it reinvigorate the region?

ANGUS TAYLOR: We're doing an inquiry right now - I think you're jumping the gun having that discussion. We're doing an inquiry, there is a moratorium. There's no plan to change the moratorium. We do need to explore a whole range of technologies that might play a role in our energy system in the future - nuclear is one of them, as are bio fuels, as of course is hydrogen. The Government's investing $100 million in hydrogen projects around the country. Those longer term technology options are very, very important for us to look at.

Minister for Energy and Emissions Reduction