Energy and Climate Change Ministerial Council Meeting Press Conference

CHRIS BOWEN: Thanks for coming, everyone. Today, Australia’s Climate and Energy Ministers have met for the first time. As you know, our Energy Ministers have been meeting pretty comprehensively over the course of the last 12 months, but this is the first time our Climate Minister State and Territory colleagues have joined us. Some of us are Energy and Climate Ministers. In other jurisdictions they’re separate portfolios.

This is one task, one national job and one national effort, and that was reflected in today’s discussions. I want to thank all my State and Territory colleague Energy and Climate Ministers for the very strong engagement, for the leadership provided across all jurisdictions. Today we’ve gotten the job done. We’ve again taken forward steps in one team effort to make our transition to renewable energy faster and more orderly. Now, we had a heavy agenda today but I do just want to highlight two decisions we’ve taken. 

Australia can be a green hydrogen superpower. We can lead the world in green hydrogen production and in due course in export. But we have to have the right policies in place. Now, there was a National Hydrogen Strategy that was written in 2019, which, in our view, collectively, is out of date. It needs to be revised and refreshed, particularly in light of international developments, including the Inflation Reduction Act. So, I want to thank again my State and Territory colleagues for agreeing unanimously that we will refresh, revise and renew our national hydrogen plan. The Commonwealth will lead the discussion. The Commonwealth will revise our own policies but we welcome State and Territory input on this important matter and we’ll welcome State and Territory policies as well in that national framework, working together, because this is a massive opportunity, but Australia is one of about 20 countries with a national hydrogen plan. Around 26 more have one under development. We have to make sure our plan is up to date, fit for purpose and ready to roll. We’ll continue that work over the next couple of months, but it’s important that the Ministers today endorsed that work beginning. It will be a joint effort. 

Secondly, I just want to highlight what is a complicated policy matter and I won’t bore you with the finer policy details but a very important one. In this transition to a renewable economy, it is very easy for our grid to become congested if the investment occurs in places where it’s not most efficient. We need to send signals to the market, to private sector investors, that we want to encourage renewable dispatchable renewable energy into places where it best works most efficiently in the grid. Now, this has been something that’s been talked about for years but, frankly, not enough progress has been made. Today we made real progress. Today Ministers agreed on a model and, importantly, we agreed on what model we will not be pursuing. 

We have decided not to pursue any model which includes localised marginal pricing or a congestion management model. That is off the table as far as we’re concerned. What we will do is adopt a model of a voluntary opt-in arrangement for renewable energy investors to join a capacity-to-relief model so that they can, if they are investing in the areas which are most efficient, develop a new product, a capacity relief product, which will then be tradeable and will provide that important market signal that investment should go where it’s most efficient and most necessary. 

So, again there’s more work to do, but we have tasked our market bodies and officials to work together to bring this model to a conclusion to bring this model to reality and to report back to us at our next meeting. This is a big step forward. It’s been in the too hard basket for too long. Today Ministers took it out of the too hard basket and put it on the to-do list. And by the agreement we’ve reached today, we’ve indicated that the model we want to adopt, that we will adopt, and what we won’t adopt and that’s very important to sending the message to renewable energy investors Australia and abroad that there won’t be any locational marginal pricing. There won’t be any such disincentive but we’ll provide an incentive, including in addition to more information available to them so they have all the information they need to make their investments as efficient as possible. 

Now, I’m going to ask our host here in the Hunter, Matt Kean, to say a few words and then I’m also going to ask the Climate Minister of Queensland, Megan Scanlon, to say a few words and then, of course, we’ll take questions. I’ll take easy questions. Matt Kean will take hard questions. Thank you very much. 

MATT KEAN, NSW MINISTER FOR ENERGY: Well, firstly, thank you, Minister Bowen, for hosting this Energy Ministers conference right here in the Hunter. The Hunter has been the powerhouse of the national economy for generations. And thanks to the policies that we’re collectively leaning into, this region will continue to be a powerhouse for our nation for generations to come. We are here in the home of the Hunter Central Coast renewable energy zone that will provide the modern electricity system that we’re going to need to ensure that we deliver cheap, reliable and clean electricity to our homes and our businesses here in New South Wales and indeed across the nation. 

I was delighted today to hear from the Australian Energy Regulator, who made it very clear that the agreement that Minister Bowen and I had around putting a price cap on coal is having a real impact on driving down electricity costs. We have already seen from the AER the agreement Minister Bowen and I had with regard to the coal caps has already had an impact on reducing the increases predicted in electricity prices for next year. 

However, part of that agreement also saw the Commonwealth committing to match energy rebates of the New South Wales Government and other Governments in helping households deal with energy bill increases. What we haven’t seen yet is a single cent from the Commonwealth in energy rebates for New South Wales or the other States and Territories. Now, I’m sick of the excuse that we’re waiting for Jim Chalmers’ Budget to see that energy bill relief that citizens right across the nation are waiting for. Now is the time for action. We have delivered on the coal cap and we expect the Commonwealth to deliver on their commitments to deliver energy rebates for families across the nation. 

Now, what we’re seeing is a situation where we want to be able to trust a Federal Labor promise. We saw a Federal Labor promise when it came to superannuation. I hope it’s not going to be like that. We’re expecting energy bill rebates for New South Wales families, and right now we haven’t seen a single cent. 

MEGAN SCANLON, QLD MINISTER FOR THE ENVIRONMENT: Well, today is an incredibly important step in ending the climate wars. Many of us have been calling on the former Federal Government to convene a meeting with States and Territories and the Federal Government to talk about the issues impacting our communities. Many of our communities are feeling the very real impact of climate change and we need to work cooperatively to both mitigate those impacts and also deal with the risks associated. So, it has been wonderful to have, finally, Federal Government leadership to bring the States and Territories together, to talk on how we can work on this very complex issue together. 

Many of us, of course, the risks of climate change – we are feeling the very real risks right now but we also have an incredible opportunity, and today we’re able to talk about some of those really important next steps. Of course, we agreed to include emissions reduction in the National Energy Objectives. We’ve also agreed to a new National Hydrogen Strategy, something that I know is incredibly important to Queensland but also many other jurisdictions across the country. And, importantly, we also talked through a new risk framework at a Commonwealth level where we can deal with the risks associated particularly with our regional and remote communities who are feeling the impacts right now of rising sea levels and the impacts of climate change. 

In Queensland, we are feeling that right now in areas like the Torres Strait, and so it’s been wonderful to work together with this new Federal Government and all of our State and Territory colleagues to make sure we can work on some consistency and we can get real and meaningful action in the climate space. So, I want to thank Minister Bowen. 

CHRIS BOWEN: Thank you, Megan. Questions.

JOURNALIST: With this congestion relief thing that you’ve decided today, I mean, is congestion in renewable energy investment a real problem that’s happening right now? 

CHRIS BOWEN: Yeah, it is across the board. Now, of course, we want much more renewable energy investment, particularly dispatchable, and the last agreement that we struck in December for our Capacity Investment Mechanism is very important for bringing that investment on. And, of course, we received an update on that preparation. But it’s important that that investment, wherever possible, is where the grid can best cater for it. At the moment, there aren’t the necessary signals to the investors that this is where we want the investment to occur. It’s complicated and it’s difficult, but it’s vitally important. 

To give you an idea of how important it is, the savings to consumers will be up to $5 billion by 2050 and 23 million tonnes of emissions reduced by getting this right. By getting the power installed where it can best be dispatched at least cost through the grid, consumers win, the environment wins and the system becomes much more efficient. Now, as I said I know this isn’t going to be front-page screaming headlines. It’s not particularly sexy, but it’s particularly important and it’s particularly vital to get it right and I think the model agreed unanimously by Ministers today is the right model.

JOURNALIST: For renewable energy companies who want to get started, they already have to jump through quite a lot of hoops to get the projects they want started, development applications, all that kind of thing. Is this body going to introduce more delays by dictating when they can start? 

CHRIS BOWEN: No, not at all. We’re not creating a new body. We’re not creating any new hurdles. What we’re is doing creating a new incentive, which they can choose to take it up and if they take it up, they then have the capacity to bid in at various points in a way which provides a profit incentive for them, not a penalty. That is a carrot, not a stick, approach. The last thing we want to do is slow down renewable investment approvals. We all want to see them faster and we all want to see the approvals process work faster but we want to see it occur in the best possible places and I think the fact that after all these years of talk, jurisdictions have unanimously agreed to this model today, and, importantly, agreed what we won’t do, tells you that we are on the right track.

JOURNALIST: Is it going to be under Federal authority and how does that work? 

CHRIS BOWEN: Primarily, yes, but of course, I will work continually closely with my State and Territory colleagues.

JOURNALIST: Minister, it sounded like there was a bit of tension in that meeting about energy bill rebates. To answer Matt Kean’s concerns, when will something like that come in? 

CHRIS BOWEN: I wouldn’t classify that as tension. I think the meeting was very productive. We had a good report from the market operators about how effective, as Matt said, the intervention was, the coal caps and gas caps are, on forward prices, how that will reflect. As we said right from the beginning, there’s still going to be increases in the system, but they will be a lot less painful than they would have otherwise been if we hadn’t acted collectively. That’s the first point.

Importantly, because there are still increases, that rebate, that energy relief, is in the system and I know that the Treasurers collectively, all of them, are working hard on making that a reality. Of course, we need to see those negotiations continue. The Commonwealth has been pretty clear on our requirements that the relief be additional, not replacing what has been previously there or not including what’s previously been there. These are matters which inevitably will take some time. Of course, we will match official Government policy. We will match Government budgeted policy. We want to see that flow through. That work is continuing. The Commonwealth’s commitment to delivering that is absolutely unquestioned and I know the Treasurers collectively are working to make good timetable.

JOURNALIST: We’re in this time when everybody is struggling with their energy bills and their cost of living and it’s great that you’re getting together, but, I guess, some people might say could there have been more measures for ordinary people trying to, hoping to bring down their electricity bills out of these conversations? 

CHRIS BOWEN: I guess I would say a few things. Firstly, I mean, the Commonwealth and New South Wales and Queensland acting last year was no small thing and then all the other states coming together on the energy relief plan was no small thing. And that wasn’t done lightly. None of the Governments acted lightly or easily on such a big intervention, an intervention for which we had no assistance from the Federal Opposition, but which we worked closely and carefully with States on, of all persuasions. That’s the first point. The second point is the relief through the rebates is important. We’ve always said that. The third point is the cheapest form of energy is renewable energy and while it takes time, getting the policies in place to make our transition faster and more orderly is one of the best things we can do over the medium term. There’s short-term interventions and rebates. That’s really important. Because you’re right, people are hurting now. We get it, all of us. We get it very acutely. We know that. So, the short term relief is there and substantial. The longer-term plans are also important. Today we’ve made progress on both.

JOURNALIST: You mentioned the coal caps. That’s had a big impact in this region in particular. A lot of our local mines like BHP and Yancoal have expressed concerns about these market interventions. I mean, what do you say to a lot of those workers around here who have been told by coal companies that these market interventions might affect how long they operate for and consequently their jobs? 

CHRIS BOWEN: Look, I don’t think - I have not seen any reports of that being the case, of companies saying that. Certainly, companies don’t prefer intervention. That is true. They prefer to maximise profits. Indeed, that is their job, to maximise their profits. We have a different job. We have to maximise the best interests of the Australian people. That’s our job, not the profits of coal companies or gas companies or anyone else. So, the interventions have been carefully designed, properly calibrated, agreed, in the case of coal between three Governments across Australia, New South Wales and Queensland. The same with the gas market. Again, I’m not here to pretend to you that the gas companies like having their profits capped either. I can tell you they don’t. But it’s not our job to keep gas companies happy. It’s our job to maximise the best interests of the Australian people and I believe that is the intention of every single government. It is certainly the intention of the Albanese Government and if companies want to complain about that, they can, but we will act in the best interests of all. 

In relation to coal, I mean, the coal cap comes in at a reasonable price of $125 a tonne. Matt may wish to talk about his reservation policy separately, I don’t know, but it’s certainly reasonable. You can make good profits, healthy profits, nobody’s against that, but not excessive profits at the cost of the Australian people. 

MATT KEAN: Can I just back that in? The foreign coal companies complaining about the coal cap exported $61 billion worth of coal out of the Port of Newcastle last year alone. So, I don’t think it’s too much to ask for them to reserve a small amount of that, a tiny percentage, of that coal for the benefit of New South Wales families and businesses. This is not unreasonable. They made $61 billion worth of export profits last year alone, these foreign coal companies, and all we’re asking is for them to reserve a small amount for New South Wales families and businesses.

JOURNALIST: Minister, while you’re up there, I was just wondering, we’ve got a massive coal-fired power station closing in just two months up the road at Liddell. I was just curious because that power station supplies 10 per cent of power or something to New South Wales. Have you had a chat with Chris Bowen about how we’re preparing for that closure? 

MATT KEAN: I certainly have. We work closely together because we’re both committed to ensuring the system remains reliable and we put downward pressure on electricity prices. We’ve got a long-term plan to ensure that we replace existing generation with new generation and that’s exactly what we’re getting on with building. Here in New South Wales, we’re building 12 gigawatts of renewable energy backed up with two gig watts of long-duration storage and the firming to ensure that we keep the lights on and put downward pressure on electricity prices. And we’ve worked closely with Minister Bowen to unlock the transmission capability as well with our agreement around Rewiring the Nation, which will bring that cheap, clean reliable energy onto line as soon as possible. We’ve got a clear plan to ensure that we maintain system reliability and we put downward pressure on prices. 

But in the short term, what we also do is provide household assistance of $330 million to families and businesses here in New South Wales. We have an agreement with the Commonwealth around putting a coal cap in place. Part of that agreement was the Commonwealth providing energy bill relief for families here in New South Wales. Now, we’ve honoured our commitment around the coal caps and we’re waiting for the Commonwealth to meet their commitment to us in delivering that energy bill relief for New South Wales families and businesses. We don’t think it’s too much to ask.

JOURNALIST: I just have one more question. A lot of those policies aren’t super popular in this region. Is there concern about how some of that rhetoric might affect Dave Layzell’s chances of getting re elected in the Hunter? 

MATT KEAN: What we’re focused on is ensuring the Hunter remains the powerhouse of the New South Wales and national economy. So, we’re supporting industry; we’re supporting business. But we also recognise because there’s an illegal war going on in Ukraine, that that is having an impact on the wholesale price of electricity. Higher coal prices, higher gas prices are flowing through to household energy bills. So, what we’ve done is work with the Commonwealth to put in place a coal cap that will protect families and businesses from the illegal war in Ukraine. Coal companies here, they’re making huge super-profits at the moment, but what they can’t do is make that at the expense of families and businesses here in this state. So, what we’ve done is ask them to put aside a modest amount for citizens in this state and indeed this country. What they are not doing – what we’re not asking them to do is give up what they’re currently doing. They’re currently making huge profits by exporting their coal overseas and all we’re doing is asking them to reserve a small amount for New South Wales families and businesses.

JOURNALIST: I just have a few questions for Minister D’Ambrosio, if that’s okay. Yeah, it’s just about the VNI West and the Western Renewables Link projects. Yeah, the landowners have been offered out here $8,000 per kilometre for the transmission lines. They described it as shambolic. What’s your response to that? 

LILY D’AMBROSIO, VIC MINISTER FOR ENERGY, ENVIRONMENT AND CLIMATE CHANGE: Well, it’s not. And, frankly, what we have announced today is a really important step to acknowledge the fact that with big transmission projects that need to be created right across the country, to connect up those new renewable energy projects in the renewable energy zones that each State, each jurisdiction has, that we also need to be mindful of the impacts on local landholders and communities. And that’s why today I was very happy to have announced a new scheme, and it very much aligns with the New South Wales scheme that was introduced last year just a few months ago, Matt. And that is to provide additional compensation to what currently exists under Victorian legislation, that recognises that transmission is an important part of us cleaning up our energy system and that it would go towards, of course, landholders who host these transmission easements to be able to compensate them for the fact that these transmission projects need to be built. 

We think it strikes the right balance. It’s a very generous compensation package. It’s $8,000 a year per kilometre over 25 years. So, that comes on top of current compensation that is allowable under existing state legislation, which allows for additional payments to be made or payments to be made to landholders who otherwise would not be able to negotiate freely with the project proponent for compensation. So, this is a really important balanced approach and we are very committed to introducing legislation as soon as possible. The legislation, the scheme, would apply for the projects that are currently proposed, including the Western Renewables Link, VNI West and any other transmission project that needs to be built in Victoria.

JOURNALIST: Does that development stamp out any possibility of these transmission lines going underground? 

LILY D’AMBROSIO: Well, they are part of separate processes. So, what is really critical here is that whether it’s a transmission project, whether indeed it’s a renewable energy build, whether it’s wind or solar or any other technology, batteries, large batteries, they all need to go through planning approvals and certainly Western Renewables Link is right now going through an EES process. That does not change. What we’re doing here today, what we’ve announced today, is an additional benefit to the landholders who would be hosting these transmission easements and these transmission assets. So, it’s a big positive. It’s a big positive step towards acknowledging that landholders and local communities in certain parts of the State are hosting these and they are duly compensated for that. 

I mean, this is a big transition that we’re all working our way through and this is a really important step that does align with the New South Wales scheme and we believe it’s a really important positive announcement that we’ve made today.

JOURNALIST: What are you going to do if the stalemate continues? 

LILY D’AMBROSIO: I’m not sure which stalemate you’re talking about, but there are processes as I said. The western renewables link is going through an EES. It’s got to meet the requirements of an EES and that’s before an independent panel as all of these projects go through. It’s not up to me as the Minister. It’s not up to our Government. There are independent planning approval processes that need to be satisfied. So, no one can predict what the outcome of that will be. No doubt, a number of landholders will continue to advocate their position and views on it and absolutely they’re entitled to utilise the processes that are available to them to put forward their views and then an independent planning panel will make its decision. Okay? 

CHRIS BOWEN: I might just take a moment to very warmly congratulate Lily and Premier Andrews on this very big step forward. This is big for Victoria, but it’s big for Australia because on the National Energy Market we are one connected grid. This rollout of new transmission is vital to our country. There’s no transition without transmission. But as Lily said, we need to bring communities with us on this journey and it can be difficult. I know. I’ve been working with Lily. I’ve been working with the federal members, Catherine King and Sam Rae and Lisa Chesters, on these matters and payments to landholders nobody would suggest are a magic bullet which solves all the problems, but it is a real sign of good faith from the Victorian Government to these communities that we want to work with them. We recognise the impacts on landholders and I think this is a huge step forward. New South Wales did it some months ago. This is a huge step forward by Victoria and it has the full support and congratulations of the Commonwealth Government to Lily and to Dan for what I see as a very, very big step forward. Okay. Thanks very much.