Interview with Sabra Lane, ABC AM

SABRA LANE: Chris Bowen is the Federal Minister for Climate Change and Energy. Chris Bowen, welcome to AM. Does this report mean that consumers will see cheaper prices next year, or ongoing downward pressure?

CHRIS BOWEN: Well, the downward pressure is encouraging, Sabra, but of course we have more work to do. But what this underlines is that it is a fact that renewable energy is the cheapest form of energy, and the fact that solar production in particular was up so much has led to very reduced wholesale prices, $63 a megawatt hour, which is down 71 per cent from same down the year before. That's a good thing, and of course it's an encouraging development.

SABRA LANE: Yeah. So prices next year will be based on the wholesale prices this year, so you'll have your fingers crossed?

CHRIS BOWEN: Well, wholesale prices is one of the key inputs, it's not the only input to retail prices, but it's one of the key inputs, and of course it's a very handy forward indicator. Now we're not declaring victory, we're not saying that there aren't other pressures in the system, of course, in the global energy market, but the fact that we have seen such a big lift, and that indeed we've seen the highest renewable proportion for any third quarter and in fact 70 per cent of NEM generation came from renewable sources for a half an hour period, which is only in a half an hour period, but it shows what is possible with the right policy framework, and the right policy environment and the right investment environment.

SABRA LANE: We're heading into an El Nino summer with hotter and drier conditions. Air conditioning use could be well up than normal this coming summer. Demand for coal and gas with the northern winter and the wars that we're seeing in the northern hemisphere might increase too, which could make running the national energy grid this summer extremely challenging, couldn't it?

CHRIS BOWEN: Well, that's what I was referring to when I said, we're not claiming victory and there are other challenges and pressures in the market as well. We are in for a long, hot summer, Sabra, you can't avoid that, but you can prepare for it, and we have been preparing for it. It's one of the impacts of climate change, of course. 

Climate change is now a lived reality, and it means that longer, hotter summers are something we have to get more used to. It will put some pressure on the grid, but AEMO is working very closely with the federal government, with all the state governments to make sure that we're prepared.

We've seen an improvement in connections time, we're getting more energy into the system, we have been going through a process of summer readiness for some months now. When you know that a long, hot summer is coming, the right thing to do is to prepare for it, and that's what this government does.

SABRA LANE: With the additional renewable energy capacity joining this grid, the stability of the system is going to be an ongoing issue. Additional firming capacity is still needed to ensure a steady supply when the sun and wind aren't generating power. Can the government put a timeframe on when stability will cease to be a big issue?

CHRIS BOWEN: One of the biggest challenges to stability is frankly coal-fired power station outages that were unexpected. I mean we saw a big impact when the Callide Power Station in Queensland went offline a few years ago and is still not yet back online.

I don't think we can just put all the pressure on renewables for stability and reliability. We have 3.4 gigawatts more going into this summer than we had last summer of generation, that's a good thing. Yes, we need more storage. We have policies in place to get that through our Capacity Investment Scheme, which we've already begun rolling out. This is an ongoing task for governments and will continue to be.

SABRA LANE: One of the storage issues into the future will be the Snowy 2.0 project, Four Corners has taken a look at it, and it's had some big problems. Do you think it's still good value for taxpayer dollars? It's costing $2 billion extra because the appropriate machinery for boring through soft soils wasn't on site despite advice that it should be.

CHRIS BOWEN: The things that I saw when we came to office and the briefings I received, the state of Snowy 2.0 was very high on the list of things which deeply concerned me, and the lack of public disclosure of the delays and the blow outs deeply concerned me.

But I must say we have been working hard with Snowy Hydro management. The new CEO, Dennis Barnes, is doing a first-class job with his management team, and with the thousands of workers on the site, and it's important to say this is not their fault. The thousands of workers on the site are doing a good job. Should things have been done better and differently when the project was being designed by Snowy management? Yes. Is Snowy management doing a good job to turn that around now? Yes.

SABRA LANE: Could I just touch on your electorate. It's got a high percentage of Australians with Muslim ancestry. How concerned are you about ongoing social cohesion here with the events playing out in Israel and the Gaza?

CHRIS BOWEN: It's important in this very difficult time in the Middle East to know that you can believe in the legitimate aspirations and rights of the Palestinian people without exonerating in any sense the heinous acts of Hamas and condemning those.

You can also believe in the right of Israel to exist and to defend itself without expressing concern about the loss of innocent life of Palestinians who do not support Hamas and have nothing to do with Hamas.

You can believe, as I do, that Israel will only truly be free and secure when Palestine will be free and secure. You can believe all the above. I think it's important for all of us in leadership positions to express our solidarity with the people of Israel, but also our concerns for the legitimate concerns of the Palestinian people. We can and do that.

I have been concerned by the politicisation of this issue by some in the Australian political debate, you know, demanding stronger statements and stronger actions, when really I think the Prime Minister, the Foreign Minister and the government have set a very important and considered tone, and I think it's vital that the community hears that tone, and of course the final point, Sabra, is that there is absolutely no place in modern Australia for antisemitism or Islamophobia. Both should be equally condemned, and in an environment like this, it's particularly important to do so.

SABRA LANE: Chris Bowen, thanks for talking to AM.

CHRIS BOWEN: Always a pleasure, Sabra.