Interview with Patricia Karvelas, ABC Radio National

PATRICIA KARVELAS: The Government has conceded Australia is not on track to meet its 82 per cent renewable target. It will now massively expand a taxpayer funded scheme to subsidise and to underwrite new renewable energy projects. It's an admission that Australia is not currently on track to reach its 2030 target in the power grid.

To explain what it actually means for you, Chris Bowen is the Minister for Climate Change and Energy, and he joins us now. Welcome.

CHRIS BOWEN: Good to be back with you, PK, good morning.

PATRICIA KARVELAS: When did you realise you were not going to meet this target?

CHRIS BOWEN: Well, PK, this is a confirmation of what I've been saying for some time, including on your show on several occasions, that we were doing well, but not well enough.

We've been making that clear, and we're in a global race for capital and critical supply chain elements, and we need to make Australia as welcoming and as stable a policy environment as possible for this most important economic transformation, and that's exactly what we're doing.

And in many senses, PK, this is mainly about reliability. As you know, we've had four gigawatts of dispatchable power leave our grid over the last decade and only one gigawatt come on.

Yesterday, Penny Sharpe, the New South Wales Minister and I, announced a full gigawatt of dispatchable power. That's more than the previous government delivered in their entire nine years.

And that's the same system which we're expanding today to reduce emissions, and of course energy and electricity is about a third of our emissions, so that's very important, but also get more investment on before coal fired power leaves, not after, which has been the way it's been done up till now, and get it on as coal fired power, frankly, PK, is becoming increasingly unreliable, as the coal fired power stations are ageing, and that's the biggest threat to reliability in our grid.

PATRICIA KARVELAS: Okay. So under this scheme, the Commonwealth, so the Federal Government will underwrite new projects that removes risk for investors. So can you level with the Australian public and tell us how much it will cost?
CHRIS BOWEN: Well, it's an auction, PK. Now when you're putting a house on the market you don't issue a press release saying, "This is what we expect to get" and when you're bidding you don't, you know, write to the seller, saying, "This is what we're going to bid," it's an auction.

PATRICIA KARVELAS: No, but you know the range, don't you; you always know the range.

CHRIS BOWEN: Well, what we're not going to do is give a hint to bidders as to where they should be bidding. I want the best possible deal for taxpayers. Just as yesterday's announcement was, and it was a very good deal for taxpayers, we need to keep bidders with their pencils sharp, we want them competing against everyone else and not knowing what the Commonwealth expects.

Now the way this auction works is that we will ask bidders, renewable energy investors, to tell us what's their minimum return, what's their minimum price and what's the maximum price they expect and when will they share profits with the Commonwealth or the taxpayer, and we expect very strong and good bids.

Also, importantly, what we're announcing today, PK, is that we are entering into renewable energy transformation agreements with the states, negotiations to come, but of course we've already consulted with the states about this, because there's a lot of goodwill between the Commonwealth and the states, you know, we're all working well together, but we need this transmission more orderly. We need all our policies pointing in exactly the same direction, we need to be working with States to reform planning systems, we need to be working with States to ensure reliability reserves underpinning this transformation and that's exactly what these reforms will deliver.

PATRICIA KARVELAS: So again, just for, you know, a regular person who's listening to understand, for an Australian, is this about ensuring that the power supply stays on, that the lights stay on? Did you feel like you needed to dramatically expand this to ensure that happens?

CHRIS BOWEN: In short, yes, because coal fired power will leave the grid, we all know that, and only really the National Party pretends otherwise, that they can build new coal fired power stations, and some Liberals.

So everybody sensible knows that that's not going to happen, and also, you know, coal fired power stations, the workers are doing a great job keeping them operating and running, but they're getting older, and they are increasingly out both in expected outages, which is manageable, because AEMO knows that's coming and can build it into their plans, but unexpected outages at very short notice, and we're dealing with one of those at the moment, and if that happens, you know, in an environment where we're dealing with a heat wave, that's going to really provide pressure on the grid.

So what we need to do is bring forward new investment.  Now, we've got a massive pipeline - this is why I choose to, you know, see the upside - we've got a massive pipeline of renewable energy investment in Australia. But we want it moving to final investment decision more quickly, and we want it making its way through the planning systems more quickly, and really, what we're announcing today will see that happen.

PATRICIA KARVELAS: And what happens to bills? Will this investment have an impact on how much we pay for our power?

CHRIS BOWEN: Certainly no negative impact, PK, because the Commonwealth is underwriting it. So that's the case, but it is the case though that over time the more renewables you have in the system the more downward pressure that puts on bills, because renewable energy is the cheapest form of energy.

We're seeing wholesale prices massively below where they were last year, that's in no small part due to the very high solar penetration we're experiencing at the moment, and the more renewables set the wholesale price, the lower prices will be.

I know people don't pay wholesale prices, but they do flow through to retail prices after a period of time, it’s one of the key inputs to retail prices.

You know, the only people who pretend that renewable energy isn't the cheapest form of energy are our political opponents. Australians who've got solar panels on their roof know it, and anybody sensible looking at the energy market knows it as well.

PATRICIA KARVELAS: There's a lot of community opposition, Minister, to wind farms and transmission lines in particular. How much has that slowed down approvals, and how do you plan to get around that?

CHRIS BOWEN: I don't think it's slowed down approvals, but it's a very legitimate issue. We've inherited a situation where community consultation hasn't been up to scratch, particularly on transmission lines, and we're moving to fix that, because these are big deals for communities with impacts.

PATRICIA KARVELAS: Sorry to interrupt, but are you conceding that the process that you embarked on wasn't consultative enough?

CHRIS BOWEN: No, no, I'm making the point that the consultation mechanism for new transmission lines in particular, that's been in place for many, many years, I don't think was fit for purpose, and we've reformed it, and we are continuing to reform it.

PATRICIA KARVELAS: But there's also been criticism of your government for not consulting affected communities that will have transmission lines in their communities.

CHRIS BOWEN: Well, we are going through that process, PK. Now, transmission lines, for example, we are in the process of connecting Snowy 2.0 to the grid. There's no point building Snowy 2.0 unless you're going to plug it in. The previous government didn't really develop the plans to do that.

I understand that communities want to be consulted about how we do that. We've commissioned Andrew Dyer the Energy Infrastructure Commissioner to work with us and the states to improve the system. Transgrid has entered into agreements with more than 50 per cent of the land holders, which is a good thing, but there is more consultation to do.

The States are doing a good job. All the eastern States have good packages of payments to land holders who have transition lines on them, but it's not just about payments to land holders, it's also about bringing communities with us on the broader impacts.

But, you know, we also need to work in the planning system, no the to make planning more lax or reduce conditions, far from it, but to get to yes or no more quickly for renewable energy investments right across the board. Not every renewable energy proposal is in the right place at the right time, as much as we need them, we need to carefully manage the environment impacts, but we need to get to yes or no more quickly.

PATRICIA KARVELAS: Let's just talk about a particular project. In September this year the New South Wales Government began talks with Origin to extend the life of the Eraring Power Station beyond 2025. Will this policy allow it to close in 2025?

CHRIS BOWEN: Well, it's no secret that the New South Wales Government is looking at the previously announced likely closure date of Eraring, which will be in a staged process, you know, there's several units there. Penny Sharpe, the New South Wales Minister, has the same view as me: you don't want to see that coal fired power station close a day earlier than it should or a day later than it needs to.

They're in conversations with Origin, and that's quite appropriate, States do that, but one of the things we will do in these renewable energy transformation agreements is work with States to ensure underpinning reliability, and that we have a strategic reserve of, if you like, a redundant capacity that only gets called upon in an emergency.

The States will do that in different ways, there's lots of different options, and I imagine the New South Wales Government will continue to look at the potential reliability issues. But yesterday we announced more than a gigawatt of dispatchable power to be on by December 2025, so that's a significant contribution as well to ensuring that New South Wales has as reliable grid as possible going forward.

PATRICIA KARVELAS: Minister, just briefly, next week you'll be attending the COP28 Climate Conference, it will be held in Dubai. You've welcomed even incremental change from the meeting. Is Australia prepared to lift its targets and its ambitions?

CHRIS BOWEN: Well, we'll be arguing for stronger mitigation language, we'll be arguing for progress on things like loss and damage and global climate finance, et cetera. We've set our targets, we'll be announcing our 2035 target in due course, but we'll be, unlike under previous management, Australia will be seen at the table arguing for progress, being very constructive partners with our like minded parties.

I've spent a lot of time, PK, talking, including in the middle of the night to my international counterparts about how we can best progress at this COP. Last COP Australia and others were working just to maintain the status quo, just to defend what had been done at Glasgow.

We want to see forward progress at this COP and we're working closely with the COP presidency and with like mindeds to get as good as an outcome as possible. How will we go? I don't know. It's a very difficult geopolitical environment. But we'll be in there complying with, you know, Australia's ambition to be very strong advocates for our region, and for strong action across the board.

And my point about incrementalism was that I understand people's cynicism about multilateral events these days, there have been too many that are too disappointing, but there has been progress made. Before Paris, you know, the world was on track to much closer to 4 degrees of warming, we are making progress, and we've just got to keep at it.

PATRICIA KARVELAS: Okay. Minister, finally, you are in a seat where you represent many affected people who are really affected by the war we're seeing in the Middle East. We're seeing a deal for a temporary ceasefire. Would you like that to become a permanent ceasefire?

CHRIS BOWEN: Yes, as Penny Wong has said, we are calling for steps towards a ceasefire. This is a positive development overnight, which we very much welcome. Every life is - every innocent life is precious, PK, I don't care whether it's a Palestinian life or an Israeli hostage, every innocent life is precious.

PATRICIA KARVELAS: And what are your constituents asking from you?

CHRIS BOWEN: Well, my constituents would have a view very similar to the one that I've just expressed, PK, that this is a terrible situation. Penny Wong has made it very clear Australia would like to see steps towards a ceasefire, which sees hostages released and which sees Palestinians living in the circumstances to which they're entitled, which is in safety.

The attacks by Hamas were evil, we all recognise that. What we also want to see is not one more loss of an innocent life, and I'm very pleased that those calls for steps towards a ceasefire have progressed overnight.

PATRICIA KARVELAS: Thank you so much for your time, Minister.

CHRIS BOWEN: Nice to chat, PK.

PATRICIA KARVELAS: Minister for Climate Change and Energy, Chris Bowen. You're listening to RN Breakfast.