Energy Ministers' Meeting press conference

CHRIS BOWEN, Climate Change and Energy Minister: Thanks for coming everyone. Well today is the fourth meeting of Australia's energy ministers in six months, quite appropriate, because we've had a lot to do. Had a lot to do today and a lot to do in the future as well as Australians, quite rightly, look to their governments from one coast to the other for action to improve power supply and put downward pressure on power prices. That's exactly what we're working to do. Now, today's meeting was important. Today I'm delighted that the State and Territory Energy Ministers agreed unanimously with the Commonwealth in principle to develop the capacity mechanism.

What's the capacity mechanism? It's a keeping the lights on mechanism. You've heard us talk about it many, many, times, it's been in the too hard basket for a long time, today we put it on the to do list.

The capacity mechanism, which we will implement in partnership with the States and Territories will see the Commonwealth call auctions for bids, for dispatchable renewable energy, which the Commonwealth will underwrite going forward.

This is a sensible, carefully designed mechanism which will unleash investment in clean, dispatchable energy right across Australia, firming our grids, providing that extra capacity as more and more old power stations leave the grids, as more and more coal fired power stations inevitably close, we will be firming our grid going forward.

We know that over the last decade four gigawatts of energy supply left the system, and only one gigawatt came in. That's part of the reason why we're facing the challenges we are today. So there will be some more detailed discussion about design elements, but this is a big step forward. Energy Ministers have been unable to agree about the way forward on this in the past, that ends. I'm delighted with the conversation we had around the table, I'm delighted with the support from State and Territory colleagues as always here today, as we have had for the last six months. This is one team, it doesn't matter what jurisdiction, doesn't matter what political party, one team working together to get the job done on behalf of the Australian people. 

Secondly, we also agreed today to further work on the development of supply chain plans. I want to thank Minister Mick de Brenni from Queensland for leading that work. We know that access to critical materials from around the world to build the grid, to build the batteries, to build the renewables is a challenge. So we need to build more sovereign capability, we need to have plans to deal with supply chain issues. This has been a priority for us, it's a priority for the states, and I'm glad that that work is now proceeding at pace. 

Now, of course, today is not the be all and end all. Today is also the lead up to tomorrow, where the First Ministers will meet, the National Cabinet, the Prime Minister and his colleagues. It's no secret that we're also engaging with the states, frankly particularly with those states with black coal production, New South Wales and Queensland, about the right model going forward to ensure that the impact of Vladimir Putin's war does not flow through without a response from Australia's governments on energy prices. 

The fact of the matter is that we have certain powers at the Federal level, the States have certain powers, and we've been working together to work out the best way of those powers coming together. It is not the fault of Australians that power prices are so high. The cost of production hasn't gone up. 

What's happening is that every country around the world, every government around the world is dealing with these challenges, and we are dealing with them too, and I look forward to further discussions and announcements tomorrow. It's fair to say though that the governments are working very, very closely together. 

Now, I'm going to ask our host, Mick de Brenni, to add a few remarks, and then I'll ask the New South Wales Minister, Matt Kean, and Lily D'Ambrosio, to add a few remarks, and then of course we'll take questions. 

MICK DE BRENNI, QLD Minister for Energy, Renewables and Hydrogen: Thanks very much, Chris. During today's meeting we were all briefed by market bodies, and I, of course, like others, will be briefing the Premier of Queensland ahead of tomorrow's National Cabinet meeting. 

Tomorrow, as Chris has said, First Ministers will meet to consider immediate cost of living measures for the energy system. But today, Energy Ministers made more historic progress on this nation's energy independence and on our sovereign capability over foreign supply chains, because firstly, today we approved a new national scheme to underwrite investment in new firmed renewables. 

This is a win for Queensland, and I'm pleased to stand here with all of my colleagues, who have had to go it alone without the support of the Commonwealth for nearly a decade, but today, and now since the election of the Albanese Government, we have that support. 

After a decade of LNP denial and delay, today I'm very pleased to announce that coal keeper is dead. Angus Taylor and Scott Morrison's coal keeper is dead. What we have decided to do is accelerate sensible market reforms and investment in new energy storage and the grid. It's about funding for new firmed renewable energy. And this is about prices, because only when the market is dominated by clean, renewable energy will we see wholesale energy prices come down permanently. 

Secondly, Australia's renewable energy transformation is our opportunity to bring back manufacturing to Australia. There are global shock waves running through supply chains. We see wait times for hydrogen electrolysers out to months and years, overseas concentration of wind and solar components, and soaring demand for critical minerals. 

So in the race for this nation's renewable energy future, we are seeing too many Aussie dollars going offshore. But today States and Territories have agreed that rather than sprinting against each other, we will run a relay as a team, against other nations. The National Renewable Energy Supply Chain Energy Action Plan will help us deliver our energy transformation and make more things here in Australia. 

So whilst Queenslanders have won today, I also want to congratulate Lily D'Ambrosio and the Andrews government. Particularly they have shown that Australians back public ownership once again.

MATTHEW KEAN, NSW Treasurer and Minister for Energy: Well, I just want to thank Minister Bowen for his leadership today. Today Energy Ministers around the country made a very clear statement that we want our electricity system to be more reliable, and as a result of the introduction of the capacity mechanism, that's exactly what will happen.

We know there are huge challenges with this transition, but a non negotiable is ensuring that we keep the lights on during the transition, and that's exactly what will happen as a result of today's decision.

We are very pleased that the Commonwealth Government has agreed to ensure that the New South Wales capacity mechanism that we have in place will be supported by the Commonwealth and we welcome that and acknowledge their investment in our scheme here in New South Wales.

I just want to comment briefly ahead of tomorrow's meeting on the very constructive discussions that I've been having with Minister Bowen throughout the day. I made it very clear to Minister Bowen that New South Wales did not need compensation for lost coal royalties as a result of the coal cap. However, we did ask for financial assistance to support families and businesses as a result of us doing what we need to do to support our country in lowering energy bills as a result of the illegal war in Ukraine.

We are very close to landing a deal. New South Wales wants to work with the Commonwealth to ensure that we protect not only electricity users in New South Wales, but indeed electricity users across the national energy market. We will do our bit. We're very close to landing a deal, and I look forward to having more to say tomorrow. 

LILY D'AMBROSIO, VIC Minister for Energy, Environment and Climate Change: Thank you very much, and firstly, can I thank Mick de Brenni for hosting us today. Mick has been a really terrific Minister, and his hosting of today’s really important Energy Ministers’ meeting has really drawn a very clear distinction between the past and the future. And the future, of course, is one where all of us together are team Australia. 

We've got our own, of course, agendas, and we've got our own robust programs that we want to achieve in each of our jurisdictions, but knowing that we can do so much more and more quickly by working together. And certainly the Andrews Labor Government was just re elected just two weeks ago with a mandate to deliver 95 per cent renewable electricity by 2035. No more coal generation, and absolutely on our way to achieving a 100 per cent renewable energy target shortly thereafter. 

But, of course, I'm very, very proud that today we've come, Victoria has come with that ambitious program, and I do want to thank Chris Bowen for his strong leadership. It's a leadership that is not just about talk, although talk is always good, to be able to communicate to Australians, no matter where they live, that we're working together, and cooperation is better than stagnation and tearing each other apart. Those are the days of the past. 

By working together, and now with the financial support from the Commonwealth through this capacity mechanism, which is zero emissions, Victorians can absolutely know with great confidence that the constructive nature of our relationship now, through the Energy Ministers meeting will always put Victorians first in terms of our State's representation of the Energy Council meeting. And the deal that we've agreed on and signed up to today is an absolutely important way forward to help us achieve our renewable energy targets, our great ambition, creating 59,000 jobs as we do it, and all the while keeping downward pressure on power prices, creating clean zero emissions power, and absolutely having sufficient supply to meet all of our needs. And that is absolutely really critical.

Victoria's always had a very strong view when it comes to the creation of a capacity mechanism, and that is, it was to have no fossil fuels incentivized for a future that has to be carbon emissions free. And today I'm really pleased that we've all agreed on a capacity mechanism that will do just that. So thank you very much, Chris, it's been fantastic working with you today. It will enable us, of course, as a state, to meet our ambitious renewable energy targets, no more coal generation by 2035, but importantly, also, of course supporting our nation leading energy storage targets that we announced back in September.

CHRIS BOWEN: Thank you, Lily. I'll direct traffic for questions.

JOURNALIST: Mr Bowen, you said obviously states have signed up to a capacity mechanism, but there's still a few aspects of the design to sort out. Can you outline what's actually been agreed to in terms of a design, or is that still to be known about?

CHRIS BOWEN: Oh, no, we've agreed to a lot today. There's just some implementation details, which as you'd expect, officials will work through. But this is important, because this will unleash at least $10 billion of investment in renewable energy across Australia, at least six gigawatts of generation. 

What has been agreed is that the Commonwealth will run auctions for dispatchable renewable energy on a jurisdiction by jurisdiction basis, state by state, territory by territory, in close consultation with the jurisdiction, guided by AEMO as to the gaps. We will call for bids for a floor price, which will be underwritten and guaranteed by the Commonwealth, and a ceiling price, which after that the Commonwealth will share in the revenue.

That's the risk the Commonwealth is undertaking on behalf of the country to ensure that we provide that stability and certainty for renewable energy, because we're overcoming 10 years of stop start policy and 10 years of denial and delay, and there's a lot of perceived uncertainty. 

This will provide a lot of certainty to renewable energy investors, it has to be firmed, i.e. dispatchable, i.e. accompanied by storage, that's what we desperately need in the grid, so those criteria are very, very clear. The principles outlined and supported by ministers today unanimously are very clear. 

This has been to every Energy Ministers meeting I've been to, and several before, many before, and there were plenty who said, ‘Ah, this is dead, it'll never happen.’ Well, today Australia's Energy Ministers proved, with goodwill, that we are making it happen.

JOURNALIST: Are coal and gas specifically excluded? Or will it be up to individual States and Territories? 

CHRIS BOWEN: No, this is for renewable, dispatchable power, very clear; renewable, dispatchable. 

JOURNALIST: One for Minister Kean, if I can? 

MATTHEW KEAN: Of course. 

JOURNALIST: You asked the Commonwealth for financial assistance for families and businesses. You don't want compensation for loss of royalties due to the coal cuts. How much have you asked for? 

MATTHEW KEAN: Well, we're not going to go into those discussions. There will be plenty of time to make announcements tomorrow. But what I have said is that we want to support families and businesses, not only in New South Wales, but right across the National Energy Market, and we will do our bit. 

So we are not here today asking for compensation for loss in coal royalties, we're here seeking support for families and businesses who could be impacted by a cap on coal prices. Our focus is on getting electricity prices down.

We recognise that New South Wales has an important role to play, and I want to thank Minister Bowen for the constructive way he's come to the table, to ensure that we can do our bit to help the nation whilst protecting New South Wales families and businesses.

JOURNALIST: Is it safe to assume though that it would be in the hundreds of millions because that’s what the state could receive from the coal cuts?

MATTHEW KEAN: Well, I've made it very clear. New South Wales government is not worried about the impact and loss of coal royalties. What we're focussed on is the impact to family and business bills as a result of the illegal war in Ukraine.

Now, we understand that price capping is one tool that could be used to dampen electricity prices, but there are some businesses and companies that could be impacted by such a cap. We don't want to see them penalised, so we have asked the Commonwealth to provide financial assistance to support families and businesses impacted in New South Wales.

JOURNALIST: Won’t the hit to the State Government then flow on to the people in New South Wales?

MATTHEW KEAN: No, what we're doing is focussing on safeguarding the people of New South Wales, and safeguarding the people across Australia, by delivering cheap energy in a market which has seen an explosion of energy prices because of Putin's illegal war. Let's get the facts on the table. The illegal war in Europe has seen a huge spike in commodity prices feeding through to wholesale electricity prices.

We recognise that one lever that could be used to dampen those electricity prices is price caps. We understand that that could have an impact on families and businesses in our state. We've asked the Commonwealth to consider financial assistance to those families and businesses. We're very close to landing a deal, we've been having good faith discussions, and I'm confident we're going to get a great outcome tomorrow. 

JOURNALIST: A question for Minister Mick de Brenni.

CHRIS BOWEN: Steady on. We've done well today. 

MICK DE BRENNI: Crowded stage. 

JOURNALIST: You guys definitely need a bigger stage. But Minister, considering what your New South Wales colleague has just said, Queensland reined in $3.5 billion in extra royalties in 22/23 across coal and gas. Why is the state not prepared to take a hit for the greater good of Australian consumers across the eastern seaboard?

MICK DE BRENNI: Well, I think there is actually real consistency between what Queensland and New South Wales, the Commonwealth and all States and Territories think is important, that we protect households and businesses from volatile global fossil fuel markets. In terms of what that means for Queensland's economy and what that means for National Cabinet, as I indicated earlier, I'll be briefing the Premier on the outcomes, very important outcomes, from this meeting, and she'll be settling those issues at National Cabinet tomorrow.

JOURNALIST: Has your office been in contact with some of these big coal companies about what could potentially come their way?

MICK DE BRENNI: So I convene a Ministerial Energy Council, and industry, conservation groups, consumer groups, peak bodies and unions are all represented on that, and we speak and listen to those organisations on a regular basis, and I convened a meeting of the Ministerial Energy Council early this week. The Palaszczuk Government is very clear on the diversity of views in relation to these matters.

JOURNALIST: If the coal cut was to come into place, what would prevent these companies from exporting in larger numbers and neglecting the domestic market?

MICK DE BRENNI: I don't think it's appropriate to speculate on the details of any proposed measures before they are settled tomorrow. They are matters for National Cabinet. Our job, and our collective job as ministers is to ensure that Australians can rely on cheaper, cleaner, secure energy. That's been the focus of our meeting today. In terms of immediate cost-of-living pressure relief, that is a task for tomorrow.

JOURNALIST: But as Energy Minister, can you acknowledge though that that is a risk? 

MICK DE BRENNI: Well, the biggest risk to Australians right at the moment that we heard from today's meeting is in relation to the illegal war in Ukraine. That's what we have been tackling today, as I said earlier, and until our market is dominated by clean renewable energy, we won't see the sorts of lower prices that Australians want. That's what we're focussed on, that's what we've delivered today. I look forward to the outcomes of National Cabinet. I know there's been significant collaboration between First Ministers, and we'd expect that to continue tomorrow. 

JOURNALIST: Mr Bowen, if you exclude coal and gas where will this energy come from? 

CHRIS BOWEN: Renewable energy. Solar, wind stored through storage mechanisms. We'll get Australia's energy system to 82% renewables by 2030. 

JOURNALIST: What dispatchable renewable energy sources are available right now?

CHRIS BOWEN: Wind, solar, dispatchable stored through all the storage mechanisms plus pumped hydro where appropriate. I mean, this is the drive. Our transition to renewable energy has been too slow and too disorderly. Now, anybody who suggests we're going to bring on you know, new coal fired power stations is just selling a pup to the Australian people. The previous government tried that and they couldn't deliver it, despite the fact that we're talking about it. What we will do is provide an important transition safety net. Underneath this massive economic transition that's underway, as we move to renewables, we need a safety net. That's what the capacity mechanism will do to provide that stability and certainty. We're going to have the first auction next year, we're not going to wait till 2025 or 2026. We get cracking next year. It’s December now, we’ll get cracking next year with the first auction under the capacity mechanism. 

JOURNALIST: How much of those sources are available now?

CHRIS BOWEN: Well, they're not funded yet, because they don't exist yet. Because they haven't had the support of the capacity mechanism. Of course, there's lots of solar and wind in the system. And depending on different jurisdictions, South Australia, ACT and Tasmania are all very, very heavily renewable already. Other states are at different parts along the journey. Of course, that's the case. This is designed to help all States and Territories along that journey. 

JOURNALIST: When next year would the first auction.

CHRIS BOWEN: It'll be you're probably in the second half of next year. But we're, but we're certainly getting cracking.

JOURNALIST: Has your office received information and advice that we do have enough baseload power to move forward like this, because this year, a major Queensland coal fired power session went kaput. 

CHRIS BOWEN: Correct, is that the technical term? Yes, Callide has had some issues. 

JOURNALIST: It exploded and collapsed? (inaudible)

CHRIS BOWEN: Yes. And that's the point. Thank you. That is, that is exactly the point. Yes, that's why we need this mechanism because coal fired power is becoming increasingly unreliable, as coal fired power stations get older. That's nobody's fault. That's just a statement of fact. When you're when you got a coal fired power station, which is, you know, 40 or 50 years old, you know, they're at various points in their lifecycle, they become increasingly unreliable. There's not going to be a new one built. And so that's why we need to get the transition happening faster in a more orderly fashion. Renewables are the cheapest form of energy and needs to be firmed with storage so that it's dispatchable and reliable. That's what this mechanism will unleash, not just support, will unleash across our country with the stability and certainty that the mechanism will provide. 

JOURNALIST: (inaudible) 

CHRIS BOWEN: Absolutely, absolutely. Of course we do. Absolutely. I mean, there's many different types of batteries that are being built right across, I’m not going to ask every Minister to talk about what’s happening what batteries across their jurisdictions because we’d be here all afternoon. They’re being built, but we need them built faster and we need them deployed across the board in a much more sustainable way. 

JOURNALIST: Are you confident we have the baseload to do that right now?

CHRIS BOWEN: Well, I don't understand what you mean the baseload right now, of course, we have the baseload that we have now. We need more baseload power.

JOURNALIST: But if we do lose some major power plants for whatever reason, by a cyclone or another explosion.

CHRIS BOWEN: So therefore, we need more power generation. We need to generate more power generation urgently. And that's renewable. And it's got to, that's why one of our requirements, and the options will be that it’s got to be firmed with storage, so it's dispatchable.

JOURNALIST: But the questions about the short term? 

CHRIS BOWEN: Yeah and you're asking, is there enough baseline power now, I'm saying we need more of it. We need more dispatchable renewable energy. Any other questions? Do  you want to add there? AEMO strongly supports the work that we're doing and recognises and recommends that the work we are doing is absolutely essential to systems stability going forward. That's right. That's the advice that we received today from the Australian Energy Market Operator that we need to get this work underway. And that's why AEMO has been closely involved with us in developing this package.

JOURNALIST: Minister Bowen, is the federal government considering stepping into limit the fallout from the financial collapse of Clough on projects like Snowy 2.0 and EnergyConnect?

CHRIS BOWEN: So on Clough, it's a very important question. I’ve been briefed regularly by the Acting Chief Executive of Snowy Hydro as you know, Snowy 2.0 was already running 18 months late. I've asked and Snowy Hydro is working actively to minimise any impacts and they are doing a good job in ensuring that that is managed carefully. Clough had mainly onsite workers who are support workers as opposed to construction workers. Most of the construction workers are employed in a different way. But Snowy Hydro, together with in a related project TransGrid, is working very closely with the administrators to ensure that any impact on Snowy 2.0 is non-existent or minimal at this point. Anybody else? All in all done? Thank you for your time.