22 August 2019
LAURA TCHILINGUIRIAN: As we've been reporting, almost 2 million homes are at risk of summer blackouts. That is according to a new report from the Australian Energy Market Operator. It's warning that power reliability will continue to decrease in the next decade and that Australia's ageing coal fleet is putting our energy security at risk. The worst hit state is expected to be Victoria, where more than a million households are at risk of being without power this summer on days of extreme heat. The Federal Energy Minister Angus Taylor has slammed Victoria's State Government for, as he puts it, making its energy market vulnerable.
ANGUS TAYLOR: Oh, we're very concerned. There's no doubt about it. We did see last summer real challenges, particularly in Victoria. I think we're also facing real challenges in Victoria this summer. Look, the fact of the matter is you've got to have enough dispatchable power in your system to keep the lights on and keep downward pressure on prices on the worst possible day, and the worst possible day these days is typically in the middle of summer. So, that is a very real challenge. That's why we're looking at over a dozen projects around Australia to put more dispatchable power into the system. That's why we put the Retailer Reliability Obligation in place from 1 July. But none of this can work without a state government that recognises the problem, that faces up to it and that's prepared to actually act on it, and we are deeply concerned about Victoria.
LAURA TCHILINGUIRIAN: So you're saying the Victorian Government has a big role to play here?
ANGUS TAYLOR: They absolutely do - I mean, the Victorian Government is committed to putting another 5,000 megawatts of solar and wind into the system without a clear plan on how to firm that up and make sure that reliable power is there when the sun doesn't shine and the wind doesn't blow. There's no problem with people putting solar cells on their roofs, but there is a problem with people putting solar cells on their roofs without a plan about how you make sure that is reliable, affordable power when you need it, and the Victorian Government is not taking the appropriate action on that. We need them to step up. We are very willing and we've made that very clear, we're very willing to put new dispatchable power into the system and we've got projects that are moving forward like Snowy 2.0 and Battery of the Nation in Tasmania, but we can't solve this problem without a state government that recognises the nature of the problem.
LAURA TCHILINGUIRIAN: Minister, the report warns that power reliability will continue to decrease over the next decade due to Australia's ageing coal fleet - what is the Federal Government doing to address this problem?
ANGUS TAYLOR: As I said, we've got over 12 projects now to get more dispatchable power into the system. We're also working closely with collaborative state governments and private sector players to keep that firm dispatchable power, coal and gas as well as of course, hydro, in the system and to make sure it's running flat out. Now, we can only do that where we've got willing players who want to work with us, and that hasn't been the case in Victoria. The South Australian Government has recognised in the last year or so - the new government - the need to act on this and I was down there just last week looking at new capacity to bring into the market, both gas and pumped hydro. But we need similar action from other state governments.
LAURA TCHILINGUIRIAN: Well, your Victorian state counterpart, Lily D'Ambrosio, says the continued failure of old coal plants is making the supply vulnerable. Victoria is investing heavily in renewable energy. Will this improve the supply problem?
ANGUS TAYLOR: No, it won't, because when the sun doesn't shine and the wind doesn't blow, we need to have a solution, and Victoria is not doing that. Look, Victoria is putting down their coal-fired power stations. They got rid of Hazelwood. They wanted to see the end of it. Now, coal has to be part of the balance for many years to come. You can't get rid of it and hope that there's going to be a solution there when the sun doesn't shine and the wind doesn't blow. The Victorian Government's being irresponsible. This is about balance and they're not interested in balance. They're forcing 5,000 megawatts of solar and wind into the system in the coming years without a plan about what you do when the sun doesn't shine and the wind doesn't blow.
LAURA TCHILINGUIRIAN: [Talks over] So coal-
ANGUS TAYLOR: So that needs to be addressed. We also need to see life extension of appropriate, well-suited, coal and gas-fired generators. Now, we've seen that in recent weeks from AGL, with Torrens A in South Australia and Liddell in New South Wales. This is about a sensible balance, and we're not seeing that in Victoria.
LAURA TCHILINGUIRIAN: So, despite Pacific leaders last week asking for the Australian Government to consider using less coal, you believe coal is the long term solution here?
ANGUS TAYLOR: No, coal is part of the answer - balance is the solution here and coal needs to be part of the answer for many years to come. As does gas - gas, in particular, will play a very, very important, increasingly important role in the coming years. It's about balance. There's no problem with solar cells going onto people's roofs - lots of people are doing it - but you have to have a solution for when the wind doesn't blow and the sun doesn't shine. Responsible state governments see this - irresponsible state governments like Victoria don't. Now, we are deeply concerned about this summer in Victoria in particular. We've got the hangover in South Australia from a similar policy that was delivered there from a previous Labor government. The South Australian Government is acting on that but it's still a high risk situation there. We need state governments to be sensible, to recognise balance is the answer and we'll work closely with those who see that.
LAURA TCHILINGUIRIAN: Angus Taylor, the Coalition came to government in 2013 with pledges to reduce power bills. Here we are in 2019 with high power prices and an unreliable energy supply. Why is it taking so long to fix this problem?
ANGUS TAYLOR: Because we have state governments that are pursuing very aggressive targets for solar and wind without a plan for what happens when the wind doesn't blow and the sun doesn't shine. It comes down to that.
LAURA TCHILINGUIRIAN: Seems to be a bit of a catch cry.
ANGUS TAYLOR: Well, because it matters, because that is the reality. You have to have balance in the system. The idea that you can just get rid of your coal and gas-fired generators overnight and replace them with solar and wind is just wrong, it doesn't work. I mean, it defies common sense. So, balance is the answer here. We need state governments to work with us to make sure we have that balance. Now, we're working very closely with New South Wales now on the Liddell taskforce. We're working very closely with South Australia on a range of projects there. We're working very closely with Tasmania on the Battery of the Nation project. We're working on Snowy 2.0, which of course covers a number of states. But we have to have states working with us on sensible, balanced, pragmatic plans. We're getting emissions down - it's happening at a very, very rapid rate inside the electricity market - but we also need to focus on affordability and reliability and we need state governments to collaborate with us to do that.