Interview with Patricia Karevelas, RN Breakfast

PATRICIA KARVELAS, PRESENTER: Minister, welcome to the program.

CHRIS BOWEN, CLIMATE CHANGE AND ENERGY MINISTER: Great to be back, Patricia,

KARVELAS: The government's announcing several new projects today, including $1.5 billion for renewable energy zones, they’re areas with the greatest potential for renewable energy generation. What does that actually involve? And how quickly can those projects be running?

BOWEN: Well, we're making a very substantial announcement. As you said, today, Patricia. In fact, this is the biggest announcement of a Commonwealth investment in energy generation and transmission since the original snowy mountain skiing back in the 1940s. And this is really important because we have 86 months to 2030 to reduce our emissions. And as the crisis earlier this year showed, we are dealing with the implications of having four gigawatts of power leave our system over the last decade, and only one gigawatt come in. Now, there's many facets to this. Probably the most spectacular is Marinus Link, which has been long talked about. This is the second and third link between the mainland and Tasmania at the moment, there's only one link for energy to flow between Tasmania and the mainland. Marinus is really important because it means that Tasmania which is currently at 100% renewables will now have the opportunity to get to 200% renewables and share that extra capacity with the mainland, which is good for Tasmania, thousands of jobs to be created and good for the mainland, because it improves our energy reliability and of course reduces emissions. This is the equivalent of 140 million tonnes of co2 coming out of the atmosphere by 2050. Or to put it in another way Patricia, taking a million cars off the road. So this is a big deal. It's been talked about for a long time, but we're actually getting on with it.

KARVELAS: And how quickly can these projects be up and running?
 
BOWEN: These are going to take a while. So for example, Marinus, the first cable is scheduled to be finished in 2028-29. Second cable in 2030-31. Obviously, this is a joint project with Victoria, the Commonwealth and Tasmania. So we're working to try and get it done more quickly. But also, frankly, there are real constraints in construction at the moment with supply constrained. So we'll have that challenge. But we're pretty determined to get it done on this timetable. Also, as you pointed out, we're making significant announcements with the state of Victoria today, including support for offshore wind, their renewable energy zones, and an important transmission link between New South Wales and Victoria, which again, will open up massive renewable energy opportunities.

KARVELAS: Now, as you say, I mean, this is all part of Labor's plan to rewire the nation, are we going to see more of these deals signed off with other state governments in coming weeks?

BOWEN: Well, I wouldn't say coming weeks Patricia, we've been working on this deal effectively since June, very, very strongly with Tasmania and Victoria, that I lost count of the number of conversations I've had with my colleagues Guy Barnett in Tasmania and Lilly D’Ambrosio in Victoria, but, you know, constantly on the phone to each other bringing this deal to a conclusion since June. I'm also in conversations with others states, this is part of our $20 billion rewiring the nation plan. So you know, you've got this strong plan announced by Queensland a few weeks ago. Obviously, we're very interested in that and what we can do together with the Queensland Government. New South Wales Government has a lot of renewable energy zones under construction and development. We'll be participating in that. And of course, rewiring the nation is also available for Western Australia, which is on a separate grid. So yes, there will be more projects. But I'm not here to say that they are imminent, because this one has taken the best part of three months of intense negotiations to put together.
 
KARVELAS: How will the Marinus Link be fully funded? Is it fully funded?

BOWEN: Yes, of course now, we'll move to final investment decision with the other two jurisdictions. But yes, and this is a $3.139 billion project Marinus, so it's a big deal. And what we're doing is providing concessional debt under rewiring the nation so we're using the Commonwealth's ability to get cheaper debt to reduce the cost. Almost everybody agrees that Marinus Link needs to be built. The question is, how quickly and what cost? We're making sure it's built quickly at lowest cost. And we're also taking joint equity with Victoria and Tasmania. That's how we're funding it. So the Commonwealth, the Federal Government of behalf of the Australian people will own a third, Tasmania and Victoria will each own the other thirds.

KARVELAS: And in terms of their contribution, will they make clear today what that what they're putting—you’ve had clear how much you're spending-- how much they're putting on the table?

BOWEN: Yeah and their contributions effectively by taking equity in the project, they're taken joint ownership and they'll have their own financial arrangements. Every government makes their own financial arrangements, but we're all taking equity. Similarly, there's a there's an investment with Tasmania, the Northwest transmission development link, that's a big deal that brings on new renewable energy investments, that will be a big boost to our reliability and a big boost to our emissions reductions targets.

KARVELAS: There are real concerns that the renewable energy market simply isn't keeping pace with the slow shutdown of coal fired power stations. Can these projects close that gap? Or will there be a gap? And how are you going to manage that transition?

BOWEN: Well, I think we have to be realistic that these projects, particularly the big transmission lines will take some time. I mean, it would have been better if they had started four or five years ago, when we started talking about Marinus. But you know, here we are, the new government hasn't started today. They will play a role, but they are they aren't the magic bullet. We need to be doing all the above. We need to be doing all the above Patricia, that's why we're getting on with the job of the National Energy Transformation Partnership with the states and territories agree with me…

KARVELAS: But in the meantime, consumers have higher bills.

BOWEN: Well, obviously, there's pressure on bills at the moment through a range of factors. And I know that denies and delayers are out there blaming renewable energy. That's a lie. I mean, Matt Canavan and his mates in the Liberal Party and National Party just lie about that. We need to transition in Australia, Patricia, which is faster and more orderly. Under the previous management, it was too slow and too disorderly. So we did see and have seen those closures of coal fired power stations without the replacement. You're quite right to the problem you point to. As I said, over the last decade, four gigawatts of power generation came offline and then only decade (gigawatt) came on. Now we've got to fix those as a new government, we're going to fix that working in partnership with the states and territories and with the private sector. And that's exactly what we're doing. And this announcement today, which as I said, is the biggest Commonwealth investment in energy generation announced since Ben Chifley announced the snowy mountains scheme in the 1940s. It's a pretty big step forward.
 
KARVELAS: Chris Bowen, new research from The Australia Institute found gas companies made up the $40 billion of windfall profits in the last financial year largely due to inflated prices from the war in Ukraine. Is it acceptable that those companies should get to keep those huge profits after many Australians could barely afford to keep the heater on during winter?

BOWEN: Well, I think we've made it very clear our views Patricia from the Prime Minister, Minister Madeline King and myself and Minister Husic about what we expect from gas companies, Minister Madeline King announced the heads of agreement, as you know, there'd been a shortfall predicted by the ACCC

KARVELAS: It doesn't fundamentally deal with price though Chris Bowen.

BOWEN: If I could just finish my point, Patricia. The ACCC predicted a shortfall of a bit over 50 petajoules. AEMO is a bit more pessimistic. So what Madeline has done is negotiated 157 of extra petajoules into the system, which is much more than the shortfall predicted. But nobody, not Madeline not Ed, not the Prime Minister, not I has ever said that's the end. There is more to do, we have a code of conduct review. And we have made crystal clear and will continue to make crystal clear to gas companies what we see as their social license, their obligation to the Australian people to be supplying affordable gas to manufacturers and consumers across the board. We will continue to do so and there is more work to do.

KARVELAS: And you don't believe there should be a windfall tax to claim back some of the profits?
 
BOWEN: Look, we've made clear that that's not on our agenda for this budget. And it's not it's not in our policy development. But what we are doing is working as hard as we can to ensure that there is adequate supply. Yes, there's pressures in the system. I mean, ultimately Vladimir Putin's illegal invasion of Ukraine has put enormous pressure on the system, even though we're a long way away.
 
Obviously, we're connected to the international gas and the energy markets.
 
KARVELAS: We are, so can I politely take you to the Code of Conduct review. What could you put in the code of conduct which would actually have an impact on prices for consumers and for manufacturers?

BOWEN: Well, with due respect Patricia, those discussions are ongoing.
 
KARVELAS: Give me a sense because the words Code of Conduct don’t mean a lot to my audience, explain to me what you could do.

BOWEN: I understand but we have a range of levers here. The heads of agreement was one, the trigger was another the code of conduct is if you like a third. That is being-- that work is underway. The Treasurer is very involved in that work. And we'll have more to say when it's complete, but I'm not going to give you a, you know, sort of running update as those conversations continue.

KARVELAS: Why was the decision to reverse recognition of West Jerusalem as Israel's capital foreshadowed by DFAT before Cabinet met to make the decision and then announced on a Jewish holiday? Could this have been managed better?

BOWEN: I tell you what could have been managed better Patricia. The previous governments cynically pathetically changing what had been a bipartisan policy for decades since the 1940s, in a pathetic attempt to get votes in the Wentworth by-election, I mean, I saw Dave Sharma out here this morning saying that this wasn’t well handle, give me a break. He was the man with his former boss, Scott Morrison, who changed decades of bipartisan policy on a delicate and sensitive matter in a partisan play, a cheap attempt to get votes in the Wentworth by-election

KARVELAS: I’m about to speak to Dave Sharma any moment now. So let's go back to—you called it delicate. If it’s delicate, don't you have to deal with it delicately too?

BOWEN: And we have. While I won’t obviously-- we don't talk about Cabinet. Cabinet agreed to the recommendation to change back to what had been a bipartisan policy since the 1940s that the capital of Israel should be resolved in terms of that discussion as part of the two state solution. That used to be uncontroversial until Scott Morrison and Dave Sharma in the most pathetic attempt at partisan politics I have seen in a long time change their policy on the run in the middle of a byelection campaign.

KARVELAS: Thanks for your time.

BOWEN: Always a pleasure PK.