Interview with Nicole Chvastek, ABC Radio Victoria Statewide Drive

Transcript

22 August 2019

E&OE

NICOLE CHVASTEK: Angus Taylor is the Energy Minister in the Morrison Government - Minister, good afternoon.

ANGUS TAYLOR: Good afternoon Nicole.

NICOLE CHVASTEK: Richard Marles says that this blackout threat the Victorians are facing this summer is your fault.

ANGUS TAYLOR: Well, he's wrong, but I'll tell you what, it's a very real risk. The situation is clear. We're actually seeing record levels of investment in the National Electricity Market right now. In 2018, we had the highest level of investment in renewables in the world, and total investment of well over $15 billion. The issue is, that we have had State Governments in particular forcing an enormous amount of intermittent power, solar and wind, into the system without a plan for what happens when the sun goes down and the wind doesn't blow. That needs to be alleviated. We're working our way through over a dozen projects, which are all dispatchable, all on demand projects which include gas, pumped hydro, and coal, and they are about keeping the lights on and driving prices down. But what we can't afford is to have a Victorian Government which is forcing record levels of renewables into the system, prematurely closing down coal fired power stations - in particular, we saw that with Hazelwood - and imposing a moratorium on onshore exploration and development for gas. That is a cocktail of policies which is headed for disaster, and it's why Victoria is now our biggest problem. Sadly, that problem can be contagious, it can go into other states as well.

NICOLE CHVASTEK: Aren't you having a bet each way? You're taking credit for record numbers of renewables projects getting up on the one hand, and then on the other hand you're saying that this is the core of the problem, that the Victorian Government is presiding over record numbers of renewable projects getting up. I mean, you can't have it both ways, can you?

ANGUS TAYLOR: Well, no - the real problem is the Victorian Government wants these investments in renewables to happen without a plan for what happens when the sun goes down and the wind doesn't blow. You need to have a balance in the system. What we've seen now is a number of state Labor governments - initially in South Australia, now in Victoria - who are determined to force all the investments into intermittent power, power that you can't be sure is going to be there when you need it, without a plan for the alternatives. Now, an obvious thing for Victoria to do would be to invest in more gas fired generation, and potentially also pumped hydro generation. Well, they're not doing it. They've got a ban on onshore exploration and development. The answer here is balance, and we're not seeing any balance from the Victorian Government. Victoria sadly may well pay the price this summer. They paid the price last summer - 200,000 consumers lost their lights. We're working very closely with other governments to recognise this issue in New South Wales, in South Australia where the new government there has realised they've got to deal with this, the Tasmanian Government is seeking to play a big role in solving the problem. We need a Victorian Government that sees the nature of the problem and wants to solve it.

NICOLE CHVASTEK: Isn't the actual problem that you're putting all of your energy into trying to generate excitement and investment into coal, and nobody's interested. Coal is on a downward trajectory, and that's where all of your focus is.

ANGUS TAYLOR: No, all of our focus is on making sure we've got affordable power, and we can keep the lights on. There's a range of technologies and fuels that can provide that. Let's not get into the fuel wars here, but we need reliable power. Now, you can do that through hydro, that's why we're investing in Snowy 2.0, and Battery of the Nation down in Tasmania. You could do it with gas, which is why we're calling for state governments to remove the restrictions on gas. You can do it with coal, which is why we're saying don't prematurely close our coal fired power stations. But the closure of Hazelwood is a big part of the problem here, it was premature.

NICOLE CHVASTEK: Well, the IPCC says that we should be closing all of our coal fired power stations by 2050 if we want to avoid catastrophic climate change.

ANGUS TAYLOR: First of all, it's not 2050. The Victorian Government decided that they wanted to close Hazelwood several years ago, and the impact has been catastrophic. We've seen a very significant loss of reliability in the Victorian grid, and we saw very sharp increases in crisis as a result of the announcement of the closure, and then subsequently when the closure happened. This has been a very, very serious problem for the Victorian grid because the equivalent of driving a car along and jettisoning your spare tyre, so that when you have a flat, you've got nothing left to go with. That's exactly what happened last January-

NICOLE CHVASTEK: [Talks over] I spoke to Engie when they were closing, and they said that the Victorian Government had nothing to do with their decision to close down, that Hazelwood had reached the end of its working life, and that they had had offers to take it over. But it was added at an end and it could no longer sustainably be operated and it was that company's decision alone to shut it down. Why is it suddenly the fault of the State Government?

ANGUS TAYLOR: Well, the Victorian Government celebrated Hazelwood being closed down, and they're now talking through the Combet review about closing others prematurely.

NICOLE CHVASTEK: What do you mean celebrated?

ANGUS TAYLOR: If you're going to force 5,000 megawatts of intermittent power into the system - which is what the Victorian Government's plan is to do - without a plan on how to balance it with dispatchable power, then you are going to end up in a fix. That's what's going to happen because the harsh reality of it is when the sun goes down and the wind doesn't blow, you've got to have a solution. One very obvious solution is gas in the system, but they've got a moratorium on gas. Alternative is hydro but I've seen no efforts from the Victorian Government in terms of either Battery of the Nation or Snowy 2.0. So look, there has to be a solution. We stand ready, by the way, at all times to work with the Victorian Government to address this issue, but as yet, we've seen no interest from them, and a resolute focus from them on getting the 5,000 megawatts intermittency into the market without a solution for making sure it's affordable and reliable.

NICOLE CHVASTEK: Minister, Australia is about to become the largest exporter of liquid natural gas in the world, overtaking Qatar. The problem is not the supply of gas but the fact that the giant multinationals who mine it, export it, and therefore by the time Australia and Victoria get a chance to get a crack at it, the prices are so astronomical they can no longer afford it. Isn't the problem not the fact that there isn't enough gas, but the fact that the giant companies that dig it up send it overseas?

ANGUS TAYLOR: Some of it is going overseas, but a great deal of it is also being used locally. The real thing that the Victorian Government has done, is it has watched Bass Strait running down - which is happening - and it has said, well we're not going to replace that, we're going to ban any onshore exploration and development, and now we're going to pay the cost of transporting it down from Queensland. Of course that was going to end badly. I mean, it has an impact on price, make no mistake about it. If you lost your local supply, relative to what you need for local demand, it's going to have an impact on price, and it has had a very big impact on price, which is why lifting the moratorium would make a very, very big difference.

NICOLE CHVASTEK: Isn't the solution forcing those who are given the honour and the privilege of being able to dig up gas from and explore for gas in Australia, to effectively keep it here and to provide it to communities in Victoria before they have the opportunity to ship it offshore?

ANGUS TAYLOR: Yeah, but the Victorians have still got to pay for it to come down from Queensland. I mean, at the end of the day, if you're going to stop production in Victoria, it's going to cost. The result is you've now got very expensive gas in Victoria which has to be transported down from Queensland. There's not enough electricity generation to support the enormous amount of investment in renewables coming into the system, and a very simple fee which would make a difference very quickly is to raise the moratorium on gas in Victoria. That would mean you wouldn't have to transport down gas from Queensland at a very high expense.

NICOLE CHVASTEK: And yet, Victorians voted in a government with a policy which was completely opposite to that in the last election not 12 months ago.

ANGUS TAYLOR: Well, the Victorian Government needs to be honest with Victorians about the impact of having a moratorium on gas, on the price of electricity and gas in Victoria, and the reliability of that electricity and gas. Our point is that we will call out what we see as a dismal policy, as atrocious policy, whereby you've got a Victorian Government forcing record levels of renewables into the market with a resolute focus on premature closure of coal fired power stations and a moratorium on gas. That is a dangerous cocktail of policies. As I say, we stand ready to work with the Victorian Government to address this, but they've got to actually accept the nature of the problem.

NICOLE CHVASTEK: I'm speaking to the Energy Minister Angus Taylor. Minister, we have lost a very fine Australian statesman today, Tim Fischer, the former Leader of the Nationals. A sad day indeed.

ANGUS TAYLOR: It is a sad day. He made an extraordinary contribution to the fabric of this country. He's a wonderful, wonderful person. I met him and saw him around the traps many, many times, including in my own electorate. A great champion for regional Australia, an extraordinary champion for regional Australia, and he'll be sorely missed.

NICOLE CHVASTEK: Minister, thank you for your time.

ANGUS TAYLOR: Thanks Nicole.

Minister for Energy and Emissions Reduction