Interview with Kieran Gilbert, Sky News Afternoon Agenda

KIERAN GILBERT: Minister for Climate Change and Energy. Chris Bowen. Appreciate your time. This boosted Capacity Investment Scheme. It's about reliability. It's about capacity, as the name would suggest. Can you explain to our viewers how this works?

CHRIS BOWEN: Well, you're right, Kieran. What we need to do is get more energy on to our system after having lost four gigawatts over the last decade with only one gigawatt come on. We need more reliable, clean, cheaper, renewable energy before the coal fire power stations leave. And the biggest stretch of reliability in our energy grid today is coal fire power stations breaking down unexpectedly. Now, what the Capacity Investment Scheme is, is really an auction where the government says to renewable energy developers: “Give us your best bids, give us your minimum price, give us the maximum price over which you'll share profits and put your bids in.” And yesterday, for example, I announced the results of the first auction under the pilot with the NSW Minister, Penny Sharpe, over a gigawatt, thousand megawatts for NSW, and that's more than the previous government delivered in their nine years in office. So, that's the sort of results you can get. And what we're doing is taking the Capacity Investment Scheme, making it fit for purpose and letting it underpin 32 gigawatts of new generation.

KIERAN GILBERT: Just to clarify, the sharing of the profits, is that a planned return for the taxpayer?

CHRIS BOWEN: Yeah, it's an auction where again, we say to renewable energy developers, the minimum price you need guaranteed, the price over which you'll share your return, make a return to the government, to the taxpayer, and again they put in their bids and the best bids win. We really want the developers to have sharp pencils to be putting in really sharp bids. This is pretty common around the world, this sort of contracts for difference regime. It's called with a collar, that's what it's called, it's quite common around the world, renewable energy investors are used to it, energy providers are used to this sort of system around the world And it's provided very good results so far in the pilot in NSW.

KIERAN GILBERT: I understand it's an auction, as you said, you don't want to show your hand in any negotiation. It'd be counterproductive to do that. But I guess you want the industry to compete. You want the states to compete. Does the fact that we don't know the dollar figure, are you concerned that it opens up the government to a scare campaign from the Opposition and others?

CHRIS BOWEN: The Opposition will run a scare campaign regardless of what we say, regardless of what we do. That's just what they do. They're not the Opposition, they're the no position. They just know how to run a scare campaign against everything. They don't actually stand for anything themselves. We don't let that really worry us in the Albanese Government. We get on with the job of delivering good, solid policy. Now. You're right, Kieran. This is an auction. When you're selling a house, you don't put an announcement out to the bidders to say, this is what we expect to make. And when you're bidding for a house, you don't send an email to all the other bidders saying, this is what we're going to bid. An auction is designed to get the best outcome and this auction will get the best outcome for the taxpayers of Australia.

KIERAN GILBERT: The United States has what's known as the Inflation Reduction Act, but basically the name says one thing, but it's really a big industry policy and it's been hoovering up clean energy investments, not just in the United States, but internationally. Is this your play? Is this your response to the IRA, as it's known in the US, to try and keep some of those investment dollars here?

CHRIS BOWEN: Look, it's part of it, I guess Kieran, we have already released the Hydrogen Head Start policy, which is our first response to the Inflation Reduction Act. We made it clear that was a down payment. That was where the real sort of urgent need for action was. We were losing hydrogen investment, to be frank with you, to the United States. We needed to move quickly. The Treasurer and the Industry Minister and I have been working through the next stages of our response. The Inflation Reduction Act, though, is just one of the many factors in a world competing for capital and for the critical elements of the supply chain. I mean, the entire world is on this journey. Our target of 82 per cent renewable by 2030 is pretty similar, frankly, to many targets around the world. So, we're all competing for capital, we're all competing for materials, for the wires, for the submarine cables, for the solar panels. We need to provide as a stable and welcoming policy environment for investment as we can. And this Capacity Investment Scheme is really a powerful way of doing that.

KIERAN GILBERT: Are you confident the growth that you want in this sector can be accommodated even in the face of local issues? And they are local concerns around things like transmission lines, wind farms and so on?

CHRIS BOWEN: Yes, I am. And, look, we need to bring communities with us on the journey and consultation on these things in the past, the regimes that have been in place, the regime for consultation on transmission lines, which has been in place for many, many years, wasn't up to scratch and fit for purpose. So, we've moved to improve that. We've got other work underway, we've got a review underway of all those sorts of things at the moment to see what can be done to better bring communities with us. We're on a national journey. We need to get to 82 per cent renewables. Rural people will pay a big price if we don't deal with climate change. The impact on farming, productivity and agriculture of climate change is really severe. Really strong - farmers I talk to know that. But we also need to bring communities with us, ensure that there's real community benefit, whether it is new renewable installations or transmission lines. It can't just be saying, this is what's going to happen. We are talking to communities and bringing them with us. Planning systems across the country need to improve and change, and we're working on that as well. So, it's part of the journey. Another issue we have to tackle, Kieran, is the need for more workers. And I see that as a good problem to have. I mean, we're going to need 32,000 sparkies between now and 2030. That's a lot of jobs to create. It's a challenge to fill those roles. But I'd rather be finding people for jobs than jobs for people.

KIERAN GILBERT: And how does this expanded scheme, this policy, feed into your message and Australia's message at the climate talks which are being held over the coming weeks?

CHRIS BOWEN: Well, look, it's not really related to the COP meeting, Kieran. It's about our domestic policies. But of course, whenever you go to a COP, you know, you talk about what your own country is doing. We all do that. We compare notes, the United States, Canada, Germany, France, all the Ministers get together and compare notes on the challenges and opportunities. And I find, Kieran, these conversations are all pretty similar, the sorts of things we're dealing with, the sorts of challenges we're overcoming, the sorts of things we're contemplating, that's to be expected. But we'll be at COP, we'll be arguing for strong mitigation language, for strong action on emissions. That's the approach our government has taken. I'm working very closely with my international counterparts, like minded countries, on a good outcome, and we'll see how we go in a little more than a week.

KIERAN GILBERT: Minister for Climate Change and Energy, Chris Bowen. Appreciate your time, as always. Thanks.

CHRIS BOWEN: Pleasure. Kieran, good on you.