Press conference with Lily d'Ambrosio, Victorian Minister for Climate Action

CHRIS BOWEN: Well, thanks for coming, everyone. I’m delighted to be here with my friend and colleague Lily D’Ambrosio to announce the important next steps of the rollout of our plans to underwrite renewable energy in Australia. The Capacity Investment Scheme is a very important element for the federal government, the Albanese government, working in consultation with state governments to support the rollout of dispatchable, renewable energy. It’s a concept that’s been around for years, but I was delighted last year to reach agreement with all my state and territory colleagues about how it would be done, and we are rolling it out. And today we’re announcing that the process for projects to register with AEMO, their interests are being supported by the Capacity Investment Scheme here in Victoria and in South Australia is opening today.

Of course, projects can bid in and apply for support under the Capacity Investment Scheme, they must be renewable, they must be dispatchable, they must meet certain criteria, and then the best bids will win. We’re looking to deploy 600 megawatts across South Australia and Victoria, 200 megawatts here in Victoria, 200 megawatts in South Australia, 200 megawatts up for the best bids across both jurisdictions.

Of course, South Australia and Victoria are very closely linked grids, and it makes sense to do this together. We are working to identify and to eliminate the foreseen gaps in our renewable energy system. AEMO does important work in advising governments and investors about where gaps could emerge, and this Capacity Investment Scheme will ensure that those gaps are dealt with well in advance.

So by opening bids today, opening registration, we are taking the important next step. South Australia and Victoria follow New South Wales where the bids have been open for some time and are in the final stages of considering. I’m looking forward to the process working very well. I want to thank and congratulate both governments – Victoria and South Australia – for their very strong renewable energy projects. But this has to be all in. It has to be all in. Governments working together and the Capacity Investment Scheme is a very, very important way for the Albanese government to come in and provide support for those dispatchable, renewable energy projects that are so vital not only for emissions reduction but for energy security.

You know, renewable energy is secure energy when it’s properly stored and firmed and by making this dispatchable, renewable criteria, we’re ensuring that our energy security across Australia improves as well as, of course, the important task of reducing emissions.

I’m going to ask Lily to say a few words, then we’ll take your questions on this or other matters of the day.

LILY D’AMBROSIO: Thank you very much, Chris. And this is a really exciting day for Victoria but also for the country. And I’m really delighted that Chris is here in Victoria to make a really important announcement. It’s an announcement that is backed by a real serious effort of the commonwealth government, a real commitment to make sure that we can get to the renewable energy targets that we've each set, and making sure that as we get there we’ve got dispatchable capacity in the system to give all Victorians and all Australians the confidence that we can have electricity when we need it.

And, really, that’s the point of all of this. We, of course, here in Victoria are the home of the big batteries. We like to pride ourselves on that. We’ve put in quite a significant amount of funding support for getting big batteries built in Victoria. But we know that there is a lot more work that needs to be done. And, of course, batteries are not the only technologies that we need to support this transition. By 2035 Victoria will be on 95 per cent renewable electricity. And that means, of course, that we need to achieve a 6.3 gigawatt target, at least 6.3 gigawatts, of dispatchable capacity – storage, if you like – by 2035. And we need about 2.6 gigawatts at least by 2030.

There is a big job ahead of all of us, and we can only get there by working together. And I’m delighted that Chris has been a really fantastic Minister for Energy, a fantastic Minister for Climate. He’s absolutely left no day without a serious decision being made and serious work being done to get us where we need to be and where Victoria, if I can speak on behalf of Victorians, want to see us. And this is really critical to ensure that not only can we get more clean, renewable, affordable new power coming into our system to support this transition and to support our means but we’ve got that dispatchable capacity available to us.

So it is a big job but one that together with all governments working together we can get done. And we will get it done. And I really do want to be really clear about my support and enthusiasm and commendation of Chris’s work in this regard. We had a capacity scheme that had been worked on for a while, but certainly with Chris now coming on board, having been on board now for quite a while as the new Energy Minister federally, we’ve now got a scheme that will actually work and work well and deliver results as soon as possible and build on what we need to achieve. And certainly in Victoria I’m really pleased that we’ve got a fantastic partner in Canberra.

CHRIS BOWEN: Thanks, Lily. What I’m going to suggest is we’ll take questions on this announcement and associated, you know, energy matters for either Lily or myself, and then open it up for questions on other matters of the day. So questions on this announcement?

JOURNALIST: Can I ask both of you: this is a great scheme obviously –

CHRIS BOWEN: Thank you.

JOURNALIST: – but it’s not going to be available this summer or possibly the next summer [indistinct] capacity [indistinct]. So are you confident that [indistinct] energy experts [indistinct] yesterday afternoon warned about [indistinct] Victoria and South Australia and especially this summer [indistinct]? Are you confident that, AEMO primarily, but the energy markets as a whole have this under control and are going to come up with a bullet proof plan for the summer?

CHRIS BOWEN: Yes, I am confident that everything prudent and necessary that should be done is being done. This is going to be a long, hot summer. That is, you know, no surprise. We’ve been saying that for some time. That also underlines, you know, why we’re doing so many of these things. You know, climate change is real. It’s not a projection or a forecast, it’s a lived reality. We’ve just had the hottest September on record which followed the hottest August on record which followed the hottest month ever on record. And, you know, El Nino is going to have an impact on Australia and we need to ensure – unlike the previous government that was warned about a hot summer in 2019 and did nothing, Minister Watt has been preparing for, you know, natural disaster implications and we’ve been preparing for the energy grid. We have the Capacity and Connections Committee which consist of the secretary of my department Daniel Westerman and myself and state ministers as necessary, which ensures that connections are being improved as quickly as possible ready for summer. There are major pieces that have been put in place. A hot summer is not something that we can avoid. A hot summer is something we can prepare for, and the entire government apparatus, state and federal, AEMO is preparing for it.

I don’t know if Lily wants to say anything.

LILY D’AMBROSIO: Yeah, thank you, Chris. And thank you again for that question. I think what’s really important here is that AEMO has got the role to ensure that there is sufficient supply of electricity in the system to meet whatever the projected demand is going to be looking like. And certainly they do that every year. And they do that by each state. And from time to time AEMO will identify some gaps, potential gaps, in electricity supply in the event that we have the extreme summer, prolonged summer and impacts that has on the grid as a result of extreme heat with these events.

And, of course, it is their job – and they’ve got the schemes in place – to be able to contract for additional reserves in the event that there is a gap that emerges and is needed to be plugged. And AEMO has informed us – it keeps me up to date – with their contracting. They’ve got contracts in place. They’re going out for more contracts, and they’re very confident, of course, of ensuring, being able to ensure that they will have more than sufficient reserves in place to meet any gap if the gap arises this summer. And they do that periodically. So, we haven’t had that situation in Victoria for about two, three years. I think New South Wales and Queensland have had gaps identified by AEMO in the last couple of years, three years. And AEMO then of course goes out and contracts for additional reserves to meet these gaps.

Now, going to the broader issue which Chris is absolutely correct on, of course, is that we need to do more. We need to keep building, and as this transition grows in terms of the move towards more renewable electricity, we need to make sure that we’ve got also the systems in place to give people confidence that there is security of supply, not just reliability and affordability. Those three things are always coming together, and that’s what drives us each and every day. And, of course, what that means for climate is absolutely one that is understood by us also every day.

JOURNALIST: Have AEMO updated you they’ve got a tender opened only a few weeks ago for [indistinct] emergency ?

LILY D’AMBROSIO: Well, yes.

JOURNALIST: The reserve trader program, have they updated you on the application [indistinct] that?

LILY D’AMBROSIO: Well, there’s a couple initiatives that they use, and one is what’s called a short-term – and I’m sure they’ll be more than happy to describe these in more detail, but they’ve got a couple of schemes that they roll out when they believe that they need to. And there’s a short-term contracted scheme there, then there’s, of course, a longer term one. And they’ve already made some progress and they’ve already got some of that gap if not all of that gap already filled and they’re going out for more. And this is about making sure that Victorians can be confident that we’ve got the backup and the reserves and the buffer in place in case that gap eventuates. And that’s really what people want. And that’s what we expect from AEMO, and they’re doing the job and they’re doing it well.

JOURNALIST: Minister Bowen, what are the projects you’re looking at? How much are you willing to chip in? What are the projects you’re looking at for the security of supply? Are we expecting more batteries to be approved or what are you looking for specifically?

CHRIS BOWEN: Well, we’ve put criteria out and then the market will determine who bids. And the best bids will win. We’ve put criteria on it’s got to be renewable, it’s got to be dispatchable, it’s got to be at least 30 megawatts, it’s got to be at least 2 hours’ duration. Now, inevitably there’ll be projects for batteries, there’ll be projects for wind and solar, there may be other projects. We don’t – we don’t, you know, have a predilection. We’ll get the best value for the taxpayer and the best value for energy generation and they will be determined through a process where AEMO’s services will give me advice and the best projects will win.

JOURNALIST: And how much is the federal government chipping into this process? Is it shared 

CHRIS BOWEN: We don’t announce – this is entirely federally underwritten, but we don’t announce the figures because that would give an indication to bidders as to how they might want to cater their busy. We keep that information commercial in confidence because we don’t want to signal to bidders that, you know, this particular bid might be within our range. We want them to have their pencils nice and sharp.

JOURNALIST: And you said the New South Wales process is starting to wrap up. How long until you think decisions start getting made here in Victoria?

CHRIS BOWEN: I think we’d be looking for the early part of next year to be making announcements about finalised approved projects.

JOURNALIST: And these are done by reverse auction?

CHRIS BOWEN: Yeah. Correct.

JOURNALIST: Another one for Minister D’Ambrosio: do you have any response to [indistinct] remarks yesterday [indistinct] organic matter about the need for gas [indistinct] capacity to [indistinct] the scheme?

LILY D’AMBROSIO: Look, I don’t think I have to try very hard to be more eloquent than that gentleman. I don’t think I’ve ever shared my number with him, by the way, but anyway. Look, the fact is this: there are a whole range of energy producers out there and they’ll all be pushing their product. They’ll always be pushing their product and that’s always the case. With any sector, when you’ve got a whole range of technologies that are available, they’ll push their product and you’ll hear from each of those, and they’ll put their case forward. What I’m committed to and I’ve always been committed to and I’ve always been guided by this, is that our transition to 95 per cent renewable electricity by 2035 will be based on the best renewable energy technology that can give us also the dispatchability that we need, the lower power prices that everyone is seeking and the response to climate and the jobs that come with that and the security and reliability of supply. That’s what I’m interested in. Others can spruik their wares. They’ll do that. Let them do that. Not interested in that. And I’m not interest in having a slanging match with someone whose name I don’t easily recall.

JOURNALIST: Can I just ask about the 2035 target [indistinct].

LILY D’AMBROSIO: Which target, sorry?

JOURNALIST: 2035.

LILY D’AMBROSIO: Yes.

JOURNALIST: So I thought you said yesterday, looking at the transcript this morning, the other 5 per cent would be gas feed-in. Some gas industry people are pointing out to me today that, you know, gas in the Victorian grid mix has only been two and a half, 2.6 per cent on average for the last few years–

LILY D’AMBROSIO: Well, you know, this is – I’ve understood that, but you know what? Gas is the most expensive – is one of the more expensive forms of electricity generation that can come into the system. Now, we’ve got the capacity of 5 per cent of gas electricity production in Victoria. The last two or three years have been very – fairly mild summers. So we’ve not needed – gas dispatchers themselves have not been called on to provide gas-powered – gas-fired electricity because there’s been, because of our support for renewable energy, there’s been, you know, a significant amount and an adequate amount of renewable electricity available in the system to meet the demand.

So the [indistinct] are there. There’s a focus in capacity there. It doesn’t mean that it has to be used all the time. It’s used when it’s needed. And we want to make sure that it’s only needed when it’s absolutely needed because it is more expensive than other forms of electricity generation. This is what the facts are, and I think they need to reflect on that because it’s a bit mischievous for them to claim that we’ve got a – you know, there’s a 5 per cent capacity there that we’re expecting gas generators to fill by 2035. Well, they’re there now. If you go back three or four years you will find that our gas generators in Victoria have delivered around about 5 per cent of our electricity supply in Victoria. It depends on the demand and it depends on whether you’ve got enough other affordable – more affordable supply available. You know the way Economics 101 works, Ben – that’s the way it works.

JOURNALIST: So you’re confident there doesn’t need to be any additional peak in gas capacity in Victoria to meet this target?

LILY D’AMBROSIO: Well, I’m responding to your question, which was those people who are interested in, you know, selling their wares that we’ve only relied on 2 per cent of our electricity needs from gas generators in the last two years because we haven’t needed it. We’ve had sufficient cheaper forms, cheaper alternatives, available. Two, three, four years before that I think it’s the case that we have needed about 5 per cent, more of that capacity coming on line, and they provided that, and that’s a good thing. So we’re going to not be distracted by this because it’s a bit of a furphy. By 2035 we’ll have 95 per cent of our electricity coming from renewable sources. We’ll have lots of storage in place and the other 5 per cent will be supported – well, will be there and met by gas electricity generation.

CHRIS BOWEN: Okay, does that end on this announcement?

JOURNALIST: I think so.

CHRIS BOWEN: Okay, matters of the day?

JOURNALIST: Over the last few days with the pictures you’ve seen out of Israel and Palestine, how does that make you feel, and is the federal government doing enough to help Australians in the region?

CHRIS BOWEN: Yeah, let me deal with this matter firstly: what we’ve seen in Israel is, of course, a terrible, terrible tragedy. There have been innocent people killed, targeted at civilians, targeted at events of young people having a good time. It’s terrorism which has been condemned around the world and condemned by our country, as it rightly should be. That is very clear.

Also, we’ve seen events the in Australia, and the Australian government has made our view clear about what should be protested and what should not be protested about and how people should conducted themselves, as the Prime Minister has made crystal clear.

Now, in terms of consular support, these are all obviously very difficult situations, but the DFAT under the Foreign Minister’s leadership does a great job in providing that consular support in difficult circumstances to Australians who find themselves wherever they may be in an unusual circumstance who need assistance. The Foreign Minister can provide more advice about how that consular support is working.

I want to say this though: I’ve been surprised and disappointed this morning to see politicians in Australia try to make partisan political points about this. This is an international tragedy. This is terrorism. People have died, hostages have been taken. The Australian government has responded strongly and in line with governments around the world, and I’ve seen Peter Dutton and Sussan Ley try and make political points, partisan political points, criticising the Prime Minister, criticising various members of government, including me. Have a look at yourselves, guys. Have a good look at yourselves in the mirror, Peter Dutton and Sussan Ley. Is it really appropriate to be trying to score political points in Australia about a tragedy in Israel? It is not. And by this action Peter Dutton and Sussan Ley are actually showing that they’re not up to the job.

This is a moment to come together, for our country to come together. Regardless of what we think about domestic politics in Australia, these are difficult circumstances. The government of the day – when we were in opposition we used to provide support for the government of the day on matters like this. For Peter Dutton and Sussan Ley to try and score political points is beneath contempt and they should have a good look in the mirror.

JOURNALIST: [Indistinct] back to the Voice, sorry. With the Voice referendum fast approaching, will you be out and about down in polling booths this week and the weekend with your show of support?

CHRIS BOWEN: Yes. Yes, I’ll be handing out how to votes all day on Saturday. I’ve been campaigning strongly for a Yes vote, as all of us have been. This is an important moment for our country. You know, if we were writing the Australian constitution in 2023 you wouldn’t ignore 60,000 years of history. We can have a chance to write a part of the Australian constitution on Saturday, and let’s not ignore that 60,000 years of history.

JOURNALIST: So the polling is showing a lean towards the No vote still. Is the campaigning beginning to feel futile?

CHRIS BOWEN: This isn’t over until 6 o’clock on Saturday night. I read the opinion polls. I’m not going to pretend that I don’t. But I also talk to people. And I know that people understand fairness and they understand this chance. So I’m not predicting a result. I’m not predicting a Yes win or a No win. We’ll know soon enough. I know – I talk to a lot of people who haven’t been opinion-polled who tell me they’re voting Yes, so we’ll see. Other questions?

JOURNALIST: Just a couple of cost-of-living ones. The International Monetary Fund has found that Australia leads the world when it comes to mortgage stress. Is there anything else from a cost-of-living relief perspective that people should expect from the federal government?

CHRIS BOWEN: Well, of course – well, a couple of things. Firstly, we are the first government in many years to deliver a budget surplus, which is important for ensuring that we are working in sync with the Reserve Bank. The federal government’s delivering a surplus and the Reserve Bank is trying to reduce inflation, and we’re working in the same direction. We’ve got cost living packages, there’s energy relief, cheaper childcare, free TAFE, the cost of living support. Obviously in every budget we look at what is necessary in those circumstances. But we have delivered a lot of cost of living relief and, most importantly, we’re working hand in glove with the Reserve Bank in the same direction.

JOURNALIST: Interest rate rises have stabilised. Some experts are predicting they’re going to rise again. [Indistinct]?

CHRIS BOWEN: No, that is not the answer. That is not the answer. Okay? All in, all done? All righty, thank you.