Interview with Jenny Marchant, ABC Newcastle Drive

JENNY MARCHANT: The Federal Energy Minister, Chris Bowen, has been in the Hunter today announcing $171 million for a solar manufacturing plant at Black Hill. He's also been part of a ceremonial sod-turning for AGL's big grid scale battery at Tomago. Chris Bowen is here now. Good afternoon, Minister.

CHRIS BOWEN: G'day. How are you?

JENNY MARCHANT: Well, thank you. A solar manufacturing facility making solar modules. Is that the same as a solar panel or different?

CHRIS BOWEN: Pretty much. Pretty much. Yeah, it's a great thing for the Hunter, great thing for Australia. We lead the world in solar panels on roofs, but we haven't led the world in solar panel manufacturing. Only about 1 per cent of our solar panels have been made in Australia. And the irony is that the modern solar panel is in effect an Australian invention at the University of New South Wales. And in fact, the guy who's investing in this with the federal and state governments, Dr Zhengrong Shi, is a graduate of the University of New South Wales. So he learned his profession in Australia, and now he's bringing solar panel manufacturing home and he's doing it in the Hunter.

JENNY MARCHANT: Well, I understand that we import a lot of our solar panels now because they're cheaper that way. Can these that are made in Australia compete in terms of price?

CHRIS BOWEN: Yes, they can. But also, I think many Australians will be prepared to pay a little bit extra for an Australian-made solar panel. We do have one solar panel manufacturing unit in Australia at the moment called Tindo. Many Australians have their solar panels on their roofs, I do. They can be a little bit more expensive, but they're very high quality and it feels good to support an Australian manufacturer.

JENNY MARCHANT: A hundred jobs in operation for this facility once it's fully up and running. What kind of jobs are they?

CHRIS BOWEN: Well, there'll be a range of jobs. They'll be from highly skilled to more basic, and that's a good thing. It'll be a pretty efficient production line there. About 100 jobs making around 800,000 solar modules a year. That’s a lot. So this is a no small factory that’s coming to the Hunter Valley Business Park.

JENNY MARCHANT: We here at ABC Newcastle hear a lot of concern for the end of life of solar products. How recyclable are these solar modules that will be coming out of the Hunter?

CHRIS BOWEN: Yeah, they are recyclable. Let me just say- tell you a little bit more about the panels and then I'll get to that point. These are- The panels they're going to make at this foundry, in effect a factory, are a little bit different to your normal. They don't have glass. They're very flexible. They're really designed for bendy roofs. You see houses or factories where the roofs aren't straight. Designed for those. Also, potentially heritage roofs where they can't quite take the weight of the other types of panels. So it's very different.

Now, on recycling, solar panels can be recycled. They are recycled. They're not recycled enough in Australia at the moment because we're not taking enough off roofs. So the businesses really can't make enough money out of it. As solar panels continue and we get more and more coming off roofs in coming decades, recycling will become more and more economic. We're working on different plans, and we'll have more to say about that soon. But it's a bit of a myth that solar panels can't be recycled. I understand the concern, but solar panels can be recycled, batteries can be recycled, and wind turbines can be recycled too.

JENNY MARCHANT: Is the company that's manufacturing the solar panels responsible for the end of life of the solar panels? Are they part of that recycling process?

CHRIS BOWEN: Yeah, we're going to have more to say about product stewardship soon, but basically, there's going to be obligations on those who are involved in making solar panels as well as installing them to have a plan. But there's a bit of work to do on that. But the main reassurance I want to give listeners is that solar panels can be and will be recycled. Everything in a solar panel can be recycled. The expensive bit is going in and getting the things out of the solar panels, the copper and what have you. But it can be done. There's businesses around that do it already.

It's a bit like- again, I understand people's genuine concerns, but it's a bit like saying in the 1920s, oh, we better not have these car things because they'll fill up landfill. The economy and governments have a way of working their way through that and making sure that it gets handled very sensibly.

JENNY MARCHANT: Chris Bowen is the Federal Minister for Energy on 1233 ABC Newcastle. You remain in talks with Tomago Aluminium's owners to find a solution for the power price issues. Is a power purchase agreement still, a style solution at least, still under consideration there?
CHRIS BOWEN: Well, I am in discussions with Tomago, as is Tim Ayres, the Industry Minister. We're handling that together. I'm not going to go into details. They're confidential discussions at this point. It may or may not lead to a successful outcome, but we are going to leave nothing on the field. Those Tomago jobs are too important.

JENNY MARCHANT: When will we know the outcome of these talks?

CHRIS BOWEN: Well, ongoing discussions. Now, the important thing to note is that Tomago has said, in their view, there isn't enough renewable energy. They say coal is too expensive for them, and they need more renewable energy.

JENNY MARCHANT: Well, they're saying the energy is too expensive, aren't they?

CHRIS BOWEN: Well yeah but if you’ve- they've also said there's not enough certainty about the renewable energy coming on. We agree with them about that. So our discussions them around that, some in Parliament have said it's because there's too much renewable energy. That's just not true. Look at what Tomago has said. They've said, in fact, they see renewable energy as the cheapest form of energy and they need more of it, not less.

JENNY MARCHANT: When- I understand that you say there's confidentiality concerned here, but in the Hunter have 1,000 or so workers heading to Christmas, I imagine feeling pretty anxious. Is there a ballpark timeframe here to manage expectations around when we might know what's happening there?

CHRIS BOWEN: Look, the trouble is we're not the only parties here. We're talking to Tomago. If it was purely a federal government exercise, I might be able to give you an undertaking that we'll have it out by x or y date. I understand the concern, but it's not just us. We're in discussions with other parties. It’s- we may or may not reach agreement, and it takes a while to reach agreement, and it's being worked through. All parties are doing their best at the moment to have it resolved, one way or another, as soon as possible.

JENNY MARCHANT: Minister, AEMO has warned that the electricity grid isn't ready for the closure of Eraring Power Station in Lake Macquarie in 2027. Should it remain open?

CHRIS BOWEN: Look, I think Australians can take confidence that this is the process working. This is AEMO, the Government, Federal and state, working closely together to make sure our energy system remains reliable. This is a good report out from AEMO, there was lots of positives in it yesterday about how the grid can work without coal, but it does take investment in things called synchronous condensers and grid forming inverters. I'm not going to nerd out on our listeners, but they're the sorts of things we need to get in. There's enough electricity in the system for Eraring to close, but it's about system strength and inertia, which the system relies on. Now, the state government has fast-tracked the installation of these things called synchronous condensers, which don't make electricity as such, but provide some strength for the system. The question is, can we get them in time? We're going to continue to work those issues through with Transgrid, with the state government, with Origin. No one wants to see Eraring close a day earlier or a day later than it should and could reliably. There's some way to go yet to work those issues through, but it's not a lack of electricity. We do have plenty of electricity in the system now, just like every other country in the world where there's a lot of demand for these synchronous condensers. Every country in the world is putting them in, so [Indistinct]…

JENNY MARCHANT: AEMO, though, is saying that the synchronous condensers are not ready until, I think, 2028, Eraring due to close in 2027. So my question kind of stands there, do you think it should remain open?

CHRIS BOWEN: I think it should remain open for as long as necessary and not a day longer and that work continues.

JENNY MARCHANT: If the synchronous conductors aren't ready when the power station closes, then that would indicate that the power station should stay open, shouldn't it?

CHRIS BOWEN: And there's multiple options available for governments and for Origin, which we will work through. It doesn't all necessarily need to shut exactly at the same time. There’s other- there are options. No one's going to see Eraring shut and the reliability of the system threatened. I think, again, as I said, Australians can take confidence from that. Nor do we want to see it remain open longer than necessary. It's very old. It's very unreliable. The workers there are wonderful people, the actual infrastructure is now aged and is not a reliable part of our energy system, and we need to replace it with newer, more reliable energy. We've been doing that, but we've also got to get the inertia and the system strength questions correct as well.

JENNY MARCHANT: If the plant was needed to stay open, is it fair enough to use government money to do that? It wouldn't be a cheap proposition.

CHRIS BOWEN: That's not a question for my government. That's a question for the state government. The state government did enter into an agreement- remember, Eraring was going to close in 2032, I think it was, and then it came through to 2025 and then it's gone out to 2027. I mean, it does move around. The state government hasn't, as I understand, actually had to make any payments to Eraring, it's just stayed open. They did say they were open to making payments, and they had that deal, but it hasn't been necessary. Again, there's some way to go on this. That's the point I'm making. It's a little early, I'm not going to say. Origin has said the base case is it closes in 2027. That is what they're working towards. No one's going to do anything precipitous though. No one wants to see it stay open longer than it needs to or shut earlier than it should.

JENNY MARCHANT: The Snowy Hydro Gas Peaking Plant is in the final stages of commissioning at Kurri Kurri, capable of running on 15 per cent hydrogen now, could go to 30 per cent with some modifications. Will we see hydrogen flow through to Kurri Kurri anytime soon?

CHRIS BOWEN: Yeah, I hope so. The- we've got to make sure that the green hydrogen is available. That’s- there's technical capacity, but, the green hydrogen industry has taken a bit longer to develop than was predicted a few years ago. It does have a good future, but it's not happening as quickly as some people predicted or as was widely predicted. The Kurri Kurri Gas Plant is going to be commissioned this month. It won't be turned on all that often. It's a backup plant, and that's the good thing about gas. You know, it is a backup. It's there when we need it. It's not running 24/7, it’s not running most days. On the contrary, it's running very rarely. That's a good thing because it's not emitting any emissions when it's turned off. It is emitting when it's turned on, but if it's a flexible form of fuel, which coal isn't and nuclear isn't, that's a good thing.

JENNY MARCHANT: What's the hold-up in getting hydrogen supplied to Kurri Kurri?

CHRIS BOWEN: Well, it's just getting the industry up and going across the country. There's good things happening at Orica and Kooragang Island and other places, but it's not there yet.

JENNY MARCHANT: Minister Bowen, I appreciate you talking through those issues with me this afternoon, I hope you enjoyed your time in the region.

CHRIS BOWEN: Great to be here. I always do. I'm a regular visitor and I love the Hunter.

JENNY MARCHANT: Thank you. Chris Bowen is the Minister for Energy.