Interview with Hamish Macdonald, ABC RN Breakfast
HAMISH MACDONALD: Now, there's been a slow burning debate around the viability of nuclear energy in Australia as an alternative to the solar and wind renewable energy transition. The Coalition has been campaigning on the benefits of nuclear, but now the government has revealed that to replace retiring coal fired power stations with nuclear would cost $387 billion.
While that may take the wind out of some of the Opposition's argument, the government still faces an uphill battle in meeting its energy transition promises.
Chris Bowen is the Minister for Climate Change and Energy. He's here with us this morning. Good morning to you.
CHRIS BOWEN: Good morning, Hamish. I'm on the side of the Hume Highway, but I hope my line is nice and clear for you.
HAMISH MACDONALD: Thank you very much. Appreciate you pulling over. How have you landed on these figures?
CHRIS BOWEN: Well, it's pretty simple, Hamish. The Liberal and National parties say we're going too fast on renewables and have too much renewables in the system under our plans, and they have suggested, Peter Dutton has said it's as simple as plug and play, put nuclear in to replace retiring coal fired power at the same places.
Now, of course it's not that simple, because the Opposition is proposing small modular reactors, which are 300 megawatts each, which means you need a lot of them to replace the retiring coal fired power, and in fact you'd need 71 of these reactors to replace the 21 gigawatts of coal fired power we have in the system. So, it's a unicorn and a fantasy, and somebody has to pay for it if they are really serious about this plan, so whether it's consumers or taxpayers, when you put the most expensive form of energy into the system, there is a massive cost to be paid, and that is the cost that the government has identified.
HAMISH MACDONALD: I think your assumption in these figures though is that the taxpayer foots the entire bill. Would that necessarily be the case if you were making a decision to go down this path?
CHRIS BOWEN: Well, this is the cost, Hamish, of doing it. Now it's up to the Opposition to explain, would the taxpayer pay, or would, given the massive capital costs involved if it was private sector, they would need to be able to send these costs on to consumers. So, the Australian taxpayer's going to pay either by energy bills or their tax bills, one way or another. I mean it would need a taxpayer subsidy in our view, but if the opposition has a different plan and wants consumers to pay for it, they're welcome to tell the Australian people their plans and model it before the next election.
HAMISH MACDONALD: I suppose at the heart of all of this though is Australia's energy transition more broadly, and the challenges that are associated with that. Is part of the appeal with nuclear also the timing, that you know you have this technology, that you can use the existing coal fired power stations that are being phased out, you can essentially do something with those and provide that firming power in the system that we know will be needed?
CHRIS BOWEN: On the contrary, Hamish, timing is one of the big problems, whether it is how long it takes to build nuclear, I mean there are two small modular reactors in the world, one in Russia and one in China, neither of them is operating commercially. I mean it is an unproven technology, and even its big boosters, apart from Ted O'Brien who seems to think it can happen in the next couple of years, internationally, even its big boosters say nothing's going to happen before 2030.
Now we have an urgent task in front of us to reduce our emissions by 2030, so an idea which is unproven with only two operating anywhere in the world, neither of them commercially, one in Russia, one in China, just strikes me, Hamish, as utterly bizarre that the Opposition is hanging its hat on this unproven technology, is the answer to our admittedly challenging task of reducing emissions and keeping reliability. But I can't think of a worse fit for Australia than nuclear power.
HAMISH MACDONALD: We do know, we do need to achieve 43 per cent emissions reduction by 2030, 82 per cent renewables within that timeframe as well. How far off the timeline are we, because we're hearing a lot of reports, essentially suggesting that, actually, we're just a long way from where we need to be, we're not doing this fast enough.
CHRIS BOWEN: Well, it's a big job, Hamish, our plans are ambitious, we've always said that. Now I would characterise it as saying we are doing well, but I want to do better. So, for example, we have 3.4 gigawatts more going into this summer than we had last summer, AEMO has approved 6.8 gigawatts of new connections in the last financial year, which is up 2.7 gigawatts. So that's good. And we have a substantial, a very substantial pipeline of investment that the private sector is planning, but I want to see more of that moving to connections and final investment decision and planning approval as quickly as possible.
So, we have a task to do, we're got a range of policies to achieve, whether it be our Rewiring the Nation policy, our capacity investment mechanism, planning reforms that Tanya Plibersek is working on; these are all things which will come together.
Now, yes, it's fashionable at the moment to say 82 per cent's too ambitious, that is fashionable in some circles, but it's absolutely essential, and people said the same about the 2020 target. I mean people said in 2016 it was just not able to be delivered. Many of the same people now, with a federal government that was not sympathetic, that target was delivered a year ahead of schedule.
HAMISH MACDONALD: Let's just stick though to the fact of what you are actually doing now and what you are delivering on. We need this 10,000 kilometres of new wiring to be able to support the new renewable infrastructure and get everything into the grid. How much of that 10,000 kilometres has actually been built?
CHRIS BOWEN: Well, there have been a couple of projects under the previous government, which we've always acknowledged, have continued to be developed, and then we've needed to put our funding behind our deals with Tasmania, New South Wales, Victoria and Western Australia. So obviously those projects haven't yet commenced. We've only just signed off the funding arrangements.
But we've made good progress, for example, on the contracts for the Marinus Link, which is a key project, it's facing challenges like all these projects, but we've worked with the Tasmanian government to sort that, and that project is proceeding.
So, yes, of course we've come to the situation where it would have been better if more had been done over the last 10 years and we wouldn't be in this situation where we've had to move so fast, but that's the situation we've inherited, and that's the situation we're dealing with.
HAMISH MACDONALD: But can you just be honest with us? How many kilometres of this new wiring do we have currently?
CHRIS BOWEN: Well, I have just outlined the situation. There are a couple of projects under the previous government. Yes, the funding deals that we've done with the states have not yet led to the new projects having been commenced. But, of course, we've done the funding deal, the money is now there, and now the companies are getting on with ordering the kit, dealing with the land holders, planning the transmission, and all that is a big job, but it's well under way.
HAMISH MACDONALD: Obviously projects like Hume Link in New South Wales, VNI West in Victoria, are facing pretty significant backlash from communities, particularly farmers; they don't want the big transmission cables on their properties. What will be the solution there? They just simply get told, "This is where it's going, you don't have a choice?"
CHRIS BOWEN: Well, let me make a couple of points, Hamish. In Hume Link, for example, Transgrid last figures I saw have reached land holder agreements of about 45 per cent of what they needed. Now that's not 100 per cent, but it is a substantial progress. And to the credit of the New South Wales, Victorian and Queensland governments there are substantial payments to lands holders with transmission on them, $200,000 a kilometre in New South Wales and Victoria, and a slightly different formula in Queensland.
But money is not all of it. We have worked pretty hard to improve community benefit from these transmission lines. I've made it clear to transmission companies that, you know, when a community says, "We can see how this benefits the country, but we can't see how it benefits us" I think there's something in that.
I've also asked Andrew Dyer the Energy Infrastructure Commissioner, to lead a short review of what more consultation, improved engagement and better community benefit could result, because, you know, I meet with these communities, and I think they do make valid points.
This transmission is absolutely essential for the country, for our plans for emissions reduction, but also communities deserve proper engagement. It hasn't been done well enough in the past, when communities I met when we were in Opposition said, "Look, we accept that this is absolutely essential, but we don't think we've been consulted well enough," which is what they told me in Opposition, I think they made a valid point, and we've been working to improve that in consultation with the states and other key bodies as well.
HAMISH MACDONALD: In New South Wales, the state government there is beginning talks with Origin to keep the Eraring power station open past 2025 to ease the risk of blackouts. Obviously, taxpayers are likely to be compensating somewhat for the delays here. Will the federal government chip in?
CHRIS BOWEN: No, we won't be doing that, and nobody has suggested that we should. I agree with Penny Sharpe, who said publicly - she's the New South Wales Minister obviously - she said publicly she doesn't want to see Eraring stay open a day longer than it needs to or close a day earlier than it has to. And obviously that's the balance that will be struck. Obviously, I talk to the New South Wales government, Penny Sharpe and the Premier very regularly, and they keep me updated on that, but that is a matter which they are handling, and there's been no proposal for the federal government to make a contribution, and nor would we.
HAMISH MACDONALD: That state is announcing that it's going to scrap subsidies for electric vehicles of up to $3,000. Is that the sort of incentive that actually Australia needs, given the slow uptake of things like EVs in this country?
CHRIS BOWEN: Well, it's against the context, Hamish, of our electric vehicle tax cut, which is now up and running, of course, which wasn't the case when that rebate was put in. That's seen electric vehicle sales move from 2 per cent when we came to office to 8 per cent today. Obviously, I want to see that figure grow higher, and Australians want to see it grow higher; there's huge demand for electric vehicles but not enough supply at this point, hence Catherine King, the transport minister and I are working on fuel efficiency standards, of which we'll have more to say in the not too distant future.
But I also note that the New South Wales government has said that they're going to put a big lick of money into charging infrastructure, which will complement what we're doing as well with our Driving the Nation plans, we do need to roll out much more charging to deal with what we call range anxiety, people wanting to know that there will be chargers there, so there's huge interest, as I said, in electric vehicles, but a lot of people have a lot of questions, and that new charging infrastructure will be welcome, and as I said will complex our policies quite nicely.
HAMISH MACDONALD: Chris Bowen, we'll let you get back to the road. Thank you very much.
CHRIS BOWEN: Always nice to chat, Hamish. Good on you.
HAMISH MACDONALD: And Chris Bowen will debate the merits of nuclear power if you are interested in that. I know from your texts that there's plenty of engagement on that topic. It will be on Q&A tonight at 9.30pm eastern time.