7 August 2019
ANGUS TAYLOR: Australians expect a fair deal on energy, and that means they want to have reliable, affordable electricity and gas. When Australians flick the switch, they expect the power to stay on, they expect the power to come on. At the end of 2016, we saw 850,000 customers lose their power in South Australia. More recently, in January this year, we saw 200,000 customers in Victoria lose their power. Reliability and knowing that when you flick the switch the lights will come on is absolutely central to what Australians expect, and it is a reasonable expectation.
The Australian Energy Regulator has announced today that it is taking action against four windfarms in South Australia who they believe contributed to the loss of power in South Australia at the end of 2016. I'm not going to comment on the details of that litigation, it wouldn't be appropriate for me to do so. But what I will say is this - new generation is coming into our electricity grid at a record pace. We saw in 2018 the highest level of investment in solar and wind, the highest level of investment in solar and wind in the world on a per capita basis. That new generation needs to be properly integrated. It needs to perform, particularly in circumstances that are tough like we saw at the end of 2016 in South Australia. It also means that solar and wind need to be backed up appropriately, so when the wind doesn't blow and the sun doesn't shine, customers know that when they flick the switch the lights come on.
That's why we've put in place the retailer reliability obligation which ensures that years ahead of time retailers have an obligation to ensure that they have the power necessary on the toughest days to meet their customers' needs. It's why we're underwriting new generation into the system, including four projects which we're currently considering in South Australia where we saw that event at the end of 2016. These are all crucial initiatives to ensure that Australians' expectations in terms of both reliability and affordability are met. We will continue to go down this path of ensuring that the right policies are in place and the right initiatives are in place to meet Australians' needs on a fair deal on energy, but it is also important our regulators do the right thing in terms of enforcing the rules in our national electricity market, and that is what the Australian Energy Regulator is doing right now.
JOURNALIST: Does this legal action put to bed the idea that renewables were to blame for that blackout?
ANGUS TAYLOR: I'm not going to get into the details of this litigation. I think that's not appropriate. What I will say is that we need to have reliable power in this country - that it is crucial that when Australians flick that switch, the lights go on. That means that all generators need to perform, all generators need to perform, and the new generation coming into the system at over $15 billion in calendar year 2018, record levels of investment, it all needs to perform. It needs to be backed up so that there's appropriate power there for the worst possible day. That's what needs to happen. The Australian Energy Regulator needs to enforce the rules in our system and that's what they're doing.
JOURNALIST: Are you worried about networks in other states?
ANGUS TAYLOR: Well, our job is to make sure that we do everything we can as a Commonwealth Government to keep the lights on. We expect the states to do their bit as well. It's crucial, in particular, that Victoria, where I think there are real challenges coming up this summer, does the right thing. This is a state that has prematurely closed its coal-fired power stations, that has banned onshore exploration of gas, that is forcing record levels of intermittent generation into their system - they need to do the right thing to make sure that Victorians can, with confidence, know that the lights will stay on this summer, that power will be affordable, and that those crucial jobs that rely on affordable gas and affordable electricity remain in Victoria.
JOURNALIST: But Minister, do you have concerns about the other networks?
ANGUS TAYLOR: I do have concerns about Victoria this summer. I do have concerns about Victoria this summer and sadly, the way that our National Electricity Market works is those concerns can be contagious. If Victoria has serious problems, that will affect or has the potential to affect other states. But look, we have seen policy failure in that state in particular. It's good to see the South Australian Government taking real action over recent years to deal with the very serious problems they inherited, but we need to now see all states doing the right thing.
JOURNALIST: Could this legal action impact on power prices?
ANGUS TAYLOR: Our job is to make sure that Australians get reliable, affordable power and there's an enormous amount we are doing to make sure that is the case, ensuring that the retailers meet their reliability obligations, ensuring that there's enough supply coming into the market, ensuring our existing generators stay in the market running flat out. We strongly welcome AGL's recent announcement that they're extending the life of both Torrens A in South Australia - really crucial for the South Australian market - and of course Liddell in New South Wales.
JOURNALIST: So, will this impact on power prices?
ANGUS TAYLOR: This is not about power prices per se. The litigation is about ensuring that the rules are adhered to. That's what it's about. There is a broader focus from the Government on ensuring that we have affordable, reliable power and that is absolutely crucial to ensure that Australians get the fair deal they deserve, whether they're households, hardworking small businesses, or industry that employs so many Australians, particularly in regional areas.
JOURNALIST: Will you be making any investigations of your own into these breaches?
ANGUS TAYLOR:No, these are a matter, enforcement of the rules in the National Electricity Market is a role for the Australian Energy Regulator, and that's what they're doing here.
JOURNALIST: So, is wind a bad bet?
ANGUS TAYLOR: I'm not going to get into the fuel wars - that's not what this is about. This is about saying if new generators come into the market - and record levels of investment is happening right now in our National Electricity Market - they have to adhere to the rules and they have to ensure that on that worst possible day, severe weather events, that we have the power we need. That is crucial for all Australians. Australians reasonably expect that when they flick the switch, the lights go on and that's what we expect too.
Thank you very much.