Interview with Paul Kennedy, ABC News Breakfast


9 August 2019


PAUL KENNEDY: We're joined by the Federal Minister for Energy and Emissions Reduction Angus Taylor from Canberra. Minister, thank you very much for your time. Well, you're using the word ‘breakthrough’ - was the state government reluctant to get on board and perhaps keep Liddell open a little bit longer?

ANGUS TAYLOR: We don't want to see another Hazelwood happen in New South Wales. We saw this happen in Victoria a number of years ago. The good news is the New South Wales Government has been very collaborative and wants to see a solution to this problem. Liddell was scheduled to close in 2022, AGL has recently extended that to 2023 and we want a solution for 2023. That solution could be anything from extension to replacement with like-for-like capacity. Above all, we need a solution to the problem so that we've got affordable, reliable power for all people in New South Wales. Of course, this has an impact beyond New South Wales as we saw with Hazelwood. When Hazelwood went out of the market, it had a very big impact on the whole east coast electricity market. We don't want to see that happen again.

PAUL KENNEDY: Even in the market though, Liddell has its problems. It's ageing and AGL says, well, it did want to go at 2022. It's staying a little bit longer, keeping it open for those summer months but beyond that, no commitment from AGL. So what can the Government do about it?

ANGUS TAYLOR: Look, that's right - we've got to have all the options on the table and I'm not going to front run the conclusion of this taskforce. What matters is we get a solution as quickly as possible. We've got four years to actually put the answer into place but we have to get a solution now, you know. We've learnt our lessons from Hazelwood. I mean, it really was a disaster for the electricity market.

PAUL KENNEDY: Hazelwood was in a much shorter time frame, wasn't it?

ANGUS TAYLOR: Yeah, that's exactly right.

PAUL KENNEDY: You’ve had a lot longer to sort out Liddell.

ANGUS TAYLOR: Well we had a lot longer - the point is we've now got four years because of the extension that AGL has already committed to. We've now got to sort the answer out as quickly as possible. We'll be doing that over the coming months working closely with the New South Wales Government, and with AGL, and customers. I mean the customers are a very important part of this, they're really the ones who really count in getting a solution to this problem.

PAUL KENNEDY: Are you talking about kicking in public money to keep this open longer?

ANGUS TAYLOR: No. Look, we'll work through the problem. All options are on the table.

PAUL KENNEDY: Including giving money to this industry?

ANGUS TAYLOR: As I say, I'm not going to front run the conclusions of the taskforce here today. I mean it's not the right time to do it. What matters is we're putting together the right people to find a solution to this problem, and we must do it, and we cannot see a repeat of Hazelwood.

PAUL KENNEDY: Yeah, I think people will be interested to know whether you, whether that is one of the plans you're open to is giving money because AGL, I think, has forecast that if it were to stay open for another five years, that's going to be some $900 million worth. That's a lot of money and I can't see the industry- well it's already said it wants to close by 2023.

ANGUS TAYLOR: I'm not going to get into speculation about what the outcome of the taskforce is going to be. What I'm going to say is that we're going to find a solution to this problem, and we must because we can't see a repeat to Hazelwood. Look, we'll work this through with the New South Wales Government, with AGL, with customers. As I say, we'll be looking at like for like replacement of capacity as well as extension. Those options all have to be on the table. What's crucial here is an outcome which will continue to put downward pressure on prices, will ensure that people in New South Wales and right across the east coast know that when they flick the switch the lights come on.

PAUL KENNEDY: Minister, just quickly just to nail this down - are you most concerned about supply, prices or jobs?

ANGUS TAYLOR: All of the above. I mean, you know, there are jobs that depend on affordable electricity, low cost energy right across the east coast of Australia through the Hunter Valley and elsewhere.


ANGUS TAYLOR: Affordability matters, and, of course, reliability - keeping the lights on. I mean we saw last summer in Victoria, as a result of the loss of capacity in the Victorian market including Hazelwood, 200,000 consumers - households, small businesses - lose their power. We don't want to see that repeated.

PAUL KENNEDY: Yeah, looking at the comparison of Hazelwood, actually in the Latrobe Valley jobs have bounced back quite considerably in that region. Do you concede that that wasn't the problem that might have been forecast by opponents to the closure? I think unemployment's down to 5.7 there, was about 8 per cent around the time of closure.

ANGUS TAYLOR: Well we'd like to see it lower than 5.7 per cent obviously.

PAUL KENNEDY: It's a big shift though, isn't it?

ANGUS TAYLOR: The jobs aren't just in the electricity generation. The jobs are in the customer side as well, and this industry needs to have access to affordable reliable power if we continue to have those jobs in energy intensive industry. So this is very important for jobs right across the board.

PAUL KENNEDY: I just want to pick up on another comparison, the UK said it will oversee the closure of all its coal fired power plants by 2025. What problems exist in Australia on the policies of governments, state and federal, that you might need to demand that Liddell stay open?

ANGUS TAYLOR: One of the policies that needs to be addressed is access to affordable reliable gas, I mean this is a big deal. The UK has access to ample gas from the North Sea. We need to make sure we've got enough gas available for domestic consumption here in Australia. Of course, central to that is lifting some of the moratoria we see in states particularly in Victoria where we have a full moratorium on onshore gas exploration and development. This is a very big deal. It is impacting jobs in energy intensive industries, there's enormous amount of industry in Victoria that relies on access to low cost gas. It also really matters in the electricity sector because gas has the virtue of being a fuel source which can be flicked on very quickly. It is much lower emissions than coal, so it is very, very important to have access to affordable gas in our electricity system.

PAUL KENNEDY: It might also be argued that the renewables and the planning for renewables is not moving quickly enough.

ANGUS TAYLOR: You know, the thing about renewables, solar and wind, is we're seeing the highest level of investment in the world per capita happening in Australia. 2018 we were double the next country in the world in terms of investment in solar and wind.

PAUL KENNEDY: We've got great resources here, haven't we?

ANGUS TAYLOR: The real issue is we've got to make sure we have a solution for when the wind doesn't blow and the sun doesn't shine. Gas is very important to that and it's why we want to seal the moratorium in Victoria lifted. We want-

PAUL KENNEDY: That's an old argument, isn't it? Shouldn't we be moving past that?

ANGUS TAYLOR: No, no. I mean this is a very, very important argument.

PAUL KENNEDY: We've got a lot of wind and a lot of sun and we can store that power.

ANGUS TAYLOR: Storage is expensive - we're doing an enormous amount of storage in what we're doing with our Snowy project, obviously, and other pumped hydro projects that are progressing around the country, including our underwriting program for getting those sorts of projects going. But look, gas is very, very important in this mix. The UK has access to affordable, reliable gas in ample quantities. You mentioned them earlier. We need similar access. Central to that is making sure that the state governments give the appropriate planning approvals and most importantly raise these moratoria which are holding back the development of the gas industry particularly in Victoria.

PAUL KENNEDY: Minister, can I ask you about the latest Intergovernmental Panel on Climate Change, the report that came out today? It's one of our top stories. Talking about the way we use land as being as much of a harmful problem to emissions for global warming as other factors. What concerns you most about this, the findings in this report?

ANGUS TAYLOR: Look, the point I'd make about this report is that land use is important. There's no question, but Australia has done extremely well on this front through the hard work of land managers and particularly farmers who have done an extraordinary job. If you go back, you'll find that Australia back in the 1990s, that land management was a source of about 170 million tonnes of emissions. That's about a third of our total emissions now. Land management is now a sink. It's abating carbon by about 20 million tonnes a year. So this is an extraordinary turnaround. We'll reach our 2020 Kyoto targets by 367 million tonnes, largely, very significantly because of the work that's been done on land management. Farmers should get real credit for the work they have done on this.

PAUL KENNEDY: Minister, I just want to jump in. Just for time's sake, because I know you have given us plenty of your time already and give you a chance to respond. One of the scientists behind this study mentioned Australia and said that deforestation in the Amazon has surged, but also mentions that in Australia our own deforestation rate has also climbed. Do you concede that?

ANGUS TAYLOR: What I'm saying is that that land use is now a sink for carbon. We're actually absorbing carbon emissions through the way we're managing our land. That wasn't true if you go back into the past, and we're reaching our Kyoto commitments in 2020 as a result. Look this is a very, very important success story in Australia. As I say, farmers in particular haven't been given the credit they deserve for the role, the enormous role they've played on this front.  

PAUL KENNEDY: We're about to speak to the Farmers' Federation shortly too and talk about those matters. But just before you go, Andrew Hastie's comments this week - did he go too far in his criticisms and warnings about China? I know it's going to be raised by at least one Premier at COAG today.

ANGUS TAYLOR: Andrew is a valued colleague. He's a backbencher and he's entitled to-

PAUL KENNEDY: Yes, but did he go too far?

ANGUS TAYLOR: I'm not going to speculate, I'm not going to comment on his commentary. What I will say is he's a valued colleague. As a backbencher he's entitled to his point of view. From my point of view, China is a very, very important customer to Australia. I understand that as someone from a regional electorate better than many because, you know, agriculture and resources are important to my electorate and to my experience over many, many years and China is a very, very important and valued customer.

PAUL KENNEDY: Minister, thank you very much for your time this morning.

ANGUS TAYLOR: Thank you for having me.

Minister for Energy and Emissions Reduction