Energy Ministers' Meeting Media Conference

CHRIS BOWEN: Well, thanks for coming. I'm delighted to be joined by the nation's energy ministers this afternoon representing every jurisdiction in Australia. Also, Minister Koutsantonis and Minister Uibo can't join the press conference but they are here in spirit and have been very active participants in today's meeting. 

Well as you know the Australian energy market has been under very considerable pressure and the Commonwealth and states and territories have been working very, very closely together to manage that pressure and to ensure that the transition underway in Australia happens more quickly, but also in a more orderly fashion. And today's meeting has been the next step in that. It builds on the progress we made last June. And I want to thank every single one of my state and territory colleagues from every single jurisdiction across the country, for the very constructive engagement for what we're doing together and is very important work. We’ve done a lot today and I don't want to belabor all the points, but I will just deal with some of the most important things. 

We have, of course, been briefed today by our energy market operators by all of them and plus the ACCC on the current state of the energy market. And it's fair to say the challenges remain. The challenges remain this year, they remain next year into the immediate future. But just as we've worked very closely, managing this winter, we will continue to work closely together, managing the seasons that are coming upon us to ensure that the lights stay on, and that we are doing everything that is humanly possible to manage the challenges of supply. And today we have agreed to a series of reforms to the gas market on the East Coast, extending AEMO’s powers and functions to enable them to better forecast and manage East Coast supply shortfall risks, including giving them certain powers, including direct market participants to supply gas when necessary. That is important. It's not a silver bullet but it is important next step, building on the reforms were agreed in June, in relation to AEMO’s powers to buy and store gas. 

We have also importantly agreed today to include emissions reduction in the National Energy Objectives. And this might not sound much. This is the first change to the National Energy Objectives in 15 years. This is important, it sends a very clear direction to our energy market operators, that they must include emissions reductions in the work that they do, in the objectives they have in any advice or decisions they make. It also builds on the passage of the government's climate bill through the House of Representatives last week, and the message of certainty to investors in renewable energy and transmission and storage around the world that Australia is open for business, Australia is determined to reduce emissions, and we welcome investment to achieve it and we will provide a stable and certain policy framework. 

Importantly, again, ministers all of us agreed last June that we would work towards a National Energy Transformation Partnership. We're all in this together, we have the ISP which is a good document, but we need to build on it. We need states and territories and the Commonwealth working together on the plans for green hydrogen, for new renewables, for transmission, not just electricity, but for all the energy sources. And we took the next steps on that today, we agreed what will go into that agreement, that partnership going forward. We agreed, for example, that we would give ourselves the capacity to declare myself and the relevant state ministers, its state and territory ministers, to declare transmission lines of national significance, which will enable us to better and more actively engage in community consultation and compensation, and ensure that those transmission lines which are so vital for the transformation underway are delivered on time, and agreed timetables, but bringing communities with us as we do. So that's very important work. 

We agreed a whole bunch of other things today, including some changes to the retail of last resort to improve the mechanism. I don't want to belabor the point. But I do just want to thank all my state and territory colleagues for their interaction, not just today but since May, we have been working very, very closely together. You will not find a group of ministers more determined to do the right thing by the Australian people. And we'll continue to work together on the challenges facing us. I'm happy to answer any questions. And I know some of my state and territory colleagues might be happy to chip in on the answers as well

JOURNALIST: Explain what the change will mean in real terms by having this objective now, including climate change. How does that change the way you make decisions or investment decisions?

CHRIS BOWEN: I think the most important change, Jacob, is that it provides that direction to our market operator. So for example, the Energy Security Board has been working away on various options for capacity mechanisms, etc and we did some work on that today. And I'll might add to that in a moment. But they've asked us for more directions about emissions reduction because it's not in the objectives. Now it's very clear in the objectives. In any work they do in the future, they will need to cater for a requirement on behalf of the governments of Australia to reduce emissions in all the work they do. Now they need that guidance because they've got to act in accordance with the National Energy Objectives. That's their obligation under law. So if the national objectives weren't fit for purpose, ie they didn't include the important national task of reducing emissions, then they weren't able to include that in the work they would do. 

You prompted me Jacob just to mention capacity mechanism work, which I should have mentioned upfront, because it's very important. We all know that this transition underway hasn't been fast enough and hasn't been orderly enough. We want it to occur in an orderly fashion. And so the capacity mechanism, underpinning that, which we've all agreed to continue to work with and to take active management of, is going to be important. Now we thank the ESB for their work so far. The ESB will continue to work with our senior officials to advise us in meetings later in the year, particularly in December, about the right way to ensure that capacity and firming mechanism. So we need a capacity and firming mechanism to ensure that the transition is orderly, that we continue to have capacity to deliver what our constituents deserve and demand, which is reliable energy supply as we undertake this transformation. So we're all agreed to keep working on the right framework. There's been lots of advice given to the Energy Security Board, which will take into account and work through. Ministers will make a further decisions in December. But we're proceeding with that work at pace. 

JOURNALIST: Just on the capacity mechanism, are you saying it's not going to be ready by this year? There's a lot of talk about it. 

CHRIS BOWEN: Well, it was originally scheduled for 2025. Now we want to see it to happen as quickly as possible. And December is the right timeframe to have it happen as soon as possible. The plans we inherited had it happening in 2025. It can happen more quickly. That's great. This is a very big piece of work and we're continuing to work on it.

JOURNALIST: On that, I understand that work is ongoing, but for any of the ministers, the ESB requested that ministers come back with feedback to the ESB on their emissions reduction objectives. Has work been done on that are there any principles that you could outline that you're working towards on that?

CHRIS BOWEN: Well, we've instructed our senior officials to ensure that emissions reduction is included in the detailed design, and that there's analysis done and modelling done on emissions reduction, as well as capacity to ensure that we are delivering at peak periods, reliability, affordability and emissions reduction. So all that is built into the work that we've commissioned today. 

JOURNALIST: Minister D’Ambrosio, have you as a group come to a decision on gas?

LILY D’AMBROSIO: Well, look, there's still work to be done, certainly. But I think it's really important here, And it's been the case since day one, we are all united about the need to incentivise greater firming capacity in the system. So that we know that as we transition, and we all have our own transition plans and certainly having a national framework is really vital to assist us in order to be able to achieve that. So it was always going to be that jurisdictions would decide on how the capacity mechanism would operate within their own jurisdiction. So this is not about agreeing or disagreeing. It's about being in agreement about how we can actually have a framework that is able to meet our own particular needs in a way that makes sense to our own jurisdictions. 

JOURNALIST: It sounds like it’s still on the table then.

LILY D’AMBROSIO: Well, look, Victoria has a very clear position. Other states will have their position. I absolutely respect that. And as they should, we all have a needle to thread here. And, and certainly, you can't necessarily have a one size fits all. What you can do is have a national approach. And I will say to you that we're absolutely delighted that Minister Bowen has been a fantastic leader in this. He really has and to enable us to all be able to sit around a table, having that level of trust to be able to have good conversations to be able to progress a very solid agenda, heading in the one direction is absolutely what we've been able to achieve today.

JOURNALIST: The federal resources Minister Madeleine King said early in the week, the Queensland gas industry is doing the heavy lifting to ensure gas supply into the two most populous states in New South Wales Victoria while supply is elsewhere a rapid decline. To the two ministers, what are you doing to boost gas supply?

LILY D’AMBROSIO: Look, I'm happy to comment. And, you know, I'm not I'm not here to have any slanging matches with any of our colleagues. We've had really good conversations internally and certainly, the federal minister for resources has a very important job to play to ensure that we have a national gas supply system that works well for all of our interests. I can certainly rattle off a whole range of facts about Victoria and how much we produce as a state. And just to remind you, not that any anyone here needs convincing, we are all providing significant contributions in our own way to solving what we've experienced in the last few weeks, and no one wants to see that happening again. I do remind everyone that Victoria supplies 60% of the domestic gas needs across the country except, of course in WA. And we're very respectful of Bill and the work that he's doing over in WA. So that's very important. But there are a lot of other important steps that we're all taking to improve our gas supplies. And that, of course, means further exploration. Certainly, we're doing that in Victoria, for conventional gas, whether it's onshore or offshore and we'll continue to do that. But really, we need to ensure that and I say this on behalf of Victoria, that this country produces more than sufficient gas to meet our domestic needs. And we've always been consistent. And I won't surprise any of my colleagues here that we produce more than sufficient gas to meet our needs. Problem is too much of it has been allowed to be exported at our own cost and that's got to change. And that's really the task of all of us and we're all up for it. And we've all agreed about how we can go about doing that.

MATT KEAN: What I will say is that it's a nonnegotiable for New South Wales when it comes to protecting the supply of domestic gas to our users in our state. What we don't want to see is domestic gas producers prioritising profits and exports ahead of local users, that is a nonnegotiable for us in New South Wales. What we're focused on is making sure we've got enough supply coming into our state, we're doing our bit, we've just unlocked the opportunity, which is Narrabri and we're looking to bring that on as soon as possible. And we've seen Santos this week, announce that they're purchasing the Hunter gas pipeline, because they're committed to get that 70 petajoules of gas into the New South Wales domestic market. So we're doing our bit domestically. But as we've heard from the market bodies, today, there is going to be a shortfall in gas when in 2023 and 2024. That shortfall needs to be met. And what we need to do is prioritize Australian gas for Australian gas users ahead of companies making super profits and exporting that gas offshore.

JOURNALIST: Minister, do you support them, the federal government, pulling the trigger for gas?

MATT KEAN: We absolutely support the federal government prioritising the needs of domestic gas users. We want to make sure that we work with the Commonwealth to get enough gas into the system to ensure reliability and downward pressure on prices. And that's what we'll do. So we stand ready to work with Minister Bowen, I want to congratulate him for his leadership. This is easily the most constructive and productive energy ministers co-ag that I've been involved in, in my almost four years as the energy minister. This is the first time we're all on the same page, moving forward to build a modern energy system that's going to benefit consumers, it's going to benefit businesses, it's going to benefit the environment, and most importantly, it's going to benefit our economy.

JOURNALIST: Just following up on those remarks that it's constructive. And for the other energy ministers as well, to comment, please, could you just give us, if you don't mind, a bit of a history lesson. AEMO says that there's $300 billion of investment required over the next couple of decades to build out the grid. How big of a shift in the energy transition have we seen with the incoming Labor Government? How is that a significant move into facilitating that flow of bags of cash that you get an aid to get the job done?

MATT KEAN: I think, like we saw in the United States, when there's not action at the Commonwealth level, the heavy lifting is left to the states and territories. And that's what's been happening. Now we've seen everyone leaning in to the opportunity, which is this global transition. We know that 50% of the world's GDP is been generated in jurisdictions that have committed to net zero emissions. So if we're going to continue to be able to supply our goods and services to the rest of the world, we need to get with the program. And for the first time, all of us are aligned in the direction we need to take our nation. So New South Wales stands ready to continue to work with the Commonwealth to make sure that we're seeing that foreign capital coming into our state, that we're creating those jobs, and we're underwriting the next industrial revolution for our country. This is the opportunity that's before us. Too many people focus on the risk of taking action on climate change, or the risk of not taking action on climate change. What we need to be focusing on is the enormous opportunities of modernising our electricity system, which underpins our manufacturing industry, which means investment, jobs and new era of economic prosperity for our country. 

MICK DE BRENNI: From Queensland’s perspective, I might start by responding to the questions about gas. And I like to start my remarks by acknowledging the leadership of Minister Bowen and Minister King and all of my colleague ministers, we've already seen a significant response by the gas industry. And today's meeting, one of historic level of collaboration, means that we'll extend further powers to ensure that we do everything that's required to meet that expected shortfall next year. We note that in Queensland, just yesterday, a further 40 petajoules of new supply has been delivered. And we will continue to work in collaboration with all states and territories to make sure that no matter where you are in this nation that you have the energy resources that you need at an affordable price. 

There's been several critically important and historic decisions taken today, none the least of which was the agreement around the national energy transformation partnership. Now, just to put it in perspective, for 3178 days, I think it was, under the Liberal National Party in office here in Australia. There was no level of collaboration anywhere, anywhere near what we've seen today. But in just 81 days, we have arrived at a position of significant national partnership on energy transformation. The inclusion today as the first substantive step of that transformation partnership to include an emissions objective is historic. As we've heard from Minister Bowen, this will make sure that our market bodies look beyond just electrons and dollars when they're taking actions and making decisions on behalf of our national energy market. It will make sure that our market bodies take into account the future of this planet when making decisions about our national energy market and that's incredibly important. It sends a clear signal, a direct signal for more investment in clean, renewable energy and storage here in this nation. The second historic decision, I think, that was made under the national energy transformation partnership is the agreement to develop a national action plan on energy supply chains. Now, this means an action plan for onshoring of manufacturing of renewables components, an action plan to restore this nation's sovereign energy capability. And it means an action plan for more jobs in more industries. I want to thank Minister Bowen, and I want to thank the ministers from every state and territory for their collaboration today.

JOURNALIST: You talked about transmission lines as national significance taken that's a mechanism to elevate these particular projects. Does that include Marinus, Hume Link and the one in western Victoria?

CHRIS BOWEN: Yes, is a short answer. There'll be a process for me in consultation, we’ll jointly declare transmission projects of national significance. But those ones that you mentioned are mentioned in the communique as being obvious. This is really important. You know, there's no transition without transmission. Our rewiring the nation policy is all about making this a reality. I'll be working, already working with my state and territory colleagues very closely on developing bilateral arrangements. But there's more to it than just funding the transmission. Rewiring the nation does that in conjunction with the states and, and with transmission companies. But it's more than that. We've got to actually bring communities with us. And you know, a number of those projects you mentioned are controversial, for good reason. They're big, controversial projects, because people have a right to a view. By declaring a project of national significance will enable us to be more hands on in the consultation to ensure the consultation’s upfront. To ensure that various compensation models are considered to landowners and to communities. Because we've got to make this happen. We're got to make it happen with communities. And so by declaring our transmission line of national significance, and as those obvious candidates you mentioned, it will help us deliver rewiring the nation. That's what we've agreed to do today. The money is important, it makes it happen. But it's about more than the money and we are absolutely determined as one to make that a reality. 

LILY D’AMBROSIO: If I may just, thanks very much, Chris. And look, I think what's absolutely agree with everything that Chris has said, and we've really got to stop this changing and moving and shifting of dates in terms of transmission projects. We've got to agree that they need to be done ASAP, we've got to lock in those dates and just get on and do it. No one can have confidence to build the new renewable generation that we all need. And we all have a very strong set of ambitions to achieve by certain dates. You can't achieve that. And you can't get the investor confidence knowing that there are billions of dollars globally, that are looking for places to invest when we can't get transmission right. Now, gone are the days and it's just got to stop now. No more shifting of dates, of the transmission projects, whether it's the Victorian New South Wales, interconnector and others, and certainly Guy, you've got a, you know, your priorities too. We've got to stop that, we've got to agree that there's got to be a strict alignment between those transmission projects needing to be done in the ground, being able to have hooked up to them the new generation capacity that has to be done, and we are all up for doing. 

So we're having those really meaningful discussions about what those dates need to look like. And then just getting on and doing it. Absolutely social license is really vital. But the reality is, these things have to be built. They have to be built, they are nation building. But in and of themselves, we are talking about a country that has been so wealthy and lucky for many, many decades built on the back of really important resources, natural resources for our energy supply. So new energy supply that we're talking about. And we need to make sure that we've got as stewards of the system, that we've got the right systems in place, and the right physical infrastructure in place to enable the smoothest transition that we can possibly have and that all Australians want, because that's what keeps the prices down. That means that we can more quickly decarbonise our energy system. And we create the tens of thousands of 1000s, if not hundreds of thousands of jobs that go along with it. So we want Australia to be world renowned as the place for investment in renewable energy technologies. Hydrogen is certainly a big one. And also, very importantly, the gas reforms that we've agreed to today is part of us all agreeing that we never want to see a repeat of what's happened in the last few weeks, or the last two or three months. Where this country produces more than enough gas but for some set of bizarre reasons we had a gas crisis a number of months ago, that is just not appropriate. And those super profits, as Matt Kean, quite rightly called them has come at the expense of every Australian household, and every Australian business, we've got to get on top of that. It's only the start. There's a lot of work that's going to be done. We already though have made some agreements today, reached agreements about making some really important rules changes for the market operators have greater oversight, and is able to more easily intervene to ensure that we can actually have greater security that guests supply.

GUY BARNETT: Thanks very much. Firstly, congratulations Chris Bowen, for your leadership. Today has been an historic day to my colleague energy ministers, thank you so much, that we have an agreed way forward. The decisions made today are historic. Marinus Link as transmission of national significance is very important. It's another step forward in identifying this very important national infrastructure project. It will deliver not just downward pressure on electricity prices, improved energy security, more jobs, but a cleaner environment. 140 million tonnes of co2 will be removed from the atmosphere over the life of the project. That's a million cars being removed from Australia. This is a major infrastructure project that can and will deliver. Tasmania is a renewable energy powerhouse. We are already at 100% fully self-sufficient in renewable energy. We have legislated to go to 200% by 2040. We are already zero net emissions seven of the last seven years and we're just going through the parliament as we speak, to have zero net emissions by 2030. We are way ahead of the pack in Tasmania in so many respects. But I really appreciate the support today to progress those objectives even further.