Interview with Laura Jayes, Sky News AM Agenda

LAURA JAYES: Okay, let’s go back to Canberra now and joining me is the Energy and Climate Change Minister, Chris Bowen. Before I go any further, Minister, can you hear me?

CHRIS BOWEN: Got you loud and clear, Laura. Not sure what happened there.

LAURA JAYES: It’s all good. Let’s move on. Can we talk about price and reliability for a moment, because at the moment, particularly in New South Wales on the east coast, people want to know if they’re going to be able to keep the lights on and how much they’re going to pay for it. People are being told as well in New South Wales to turn off appliances during peak hours. Is this what we can come to expect as the new normal?

CHRIS BOWEN: No. What we saw yesterday in New South Wales was something that does happen from time to time in our energy grid, which is very hot conditions, which obviously under any circumstances sees electricity use go up, and quite rightly. And then we had five units of fossil fuels out of action, three of which we knew about, two of which were breakdowns at very short notice. And that did put pressure on the grid, but AEMO managed it well. They instituted all of the various weapons they have at their disposal, and we had enough energy to get through the afternoon and evening. But things were tighter than usual and, hence, the Premier suggested that if electricity use wasn’t absolutely essential, in that sort of 3 to 8 o’clock period, then maybe put it off until later or do it earlier. Which is, you know, not the first time that that has been suggested.

This is about what I’ve been saying for some time, Laura, that the biggest threat to reliability in our energy system is coal-fired power stations which aren’t getting any younger and, like all of us, as they get older, they get that little bit less reliable every day.

LAURA JAYES: Yeah, they are unreliable and they’ve been quite unreliable for quite some time. AEMO has been warning about that. We get regular updates where they say, well, the reliability going into summer months because of these ageing coal-fire systems, coal powered systems, well, that’s just the way it is. But we have known that for quite some time. You have known that as you put this energy system together. So can we expect demand management and essentially energy rationing to be part of this government’s plan? It has to be, doesn’t it?

CHRIS BOWEN: Well, no. I mean, there are methods and weapons that AEMO has always had at its disposal which it has used under governments of all persuasions, like a thing called the RERT, which is where big industrial users who sign up for that program who know that they’re part of that program can turn down their energy use as part of that arrangement they have with AEMO. Big aluminium smelters and things like that do do that, and government bodies also reduce their energy need in circumstances like that. That is not what – that’s not what I would call, you know, widespread demand measurement or measures, as you put them, but it is part of the management that AEMO has always had and will continue to have that will be put into place on those unusual circumstances where things are a bit tighter than normal.

LAURA JAYES: Yeah.

CHRIS BOWEN: But, you know, last summer we had people – Ted O’Brien said there were going to be backouts all last summer. There were no blackouts last summer caused by a lack of energy. He jumps on any warning or any action by AEMO and said, “Look, the blackouts are coming.” He’s predicted 10 out the last zero blackouts, has Ted O’Brien. He wants to see blackouts.

LAURA JAYES: But it’s AEMO saying it, right? But AEMO is worried about the blackouts as well.

CHRIS BOWEN: AEMO is – AEMO is doing their job. No, no, that’s not what AEMO is doing, with respect, Laura. What AEMO is doing is saying that they’re issuing notices, as they do, lack of reserve notices. They issued notices yesterday, there’s a lack of reserve 1 for New South Wales today, which is the lowest form of notice. In the last quarter of the Morrison government they issued 36 lack of reserve notices. In the second last quarter they issued 55.

LAURA JAYES: Yeah.

CHRIS BOWEN: This is not, you know, an extreme or unusual circumstance. It is part of managing our grid.

Now, to your point, Laura, though about the energy system, yes, we’re seeing coal-fired power being very unreliable. That means we need to bring on the new investment. Figures I’m releasing today so that this year is a record year, biggest ever on record, for renewable energy investment.

LAURA JAYES: Yeah.

CHRIS BOWEN: We’ve seen more investment in the last quarter than we did in all of last year. We’ve got a pipeline of investment which is equal in size to two-thirds of our National Energy Market, so the new investment is coming. It took our government to get the circumstances in place to see that investment, but after 10 years of denial and delay, I mean, we saw coal-fired power leave the grid under the last government, not enough new power come on. They saw 4 gigawatts of dispatchable power leave and 1 gigawatt come on. We’re fixing that. But, yes, it has meant that from time to time particular markets like New South Wales yesterday have been a bit tighter than usual.

LAURA JAYES: Well, that’s going to be happening more and more into the future, isn’t it? And, yes, I accept, you know, the last 10 years you weren’t in power, but when you came to power, you knew what the situation was. And how is your program going to make –

CHRIS BOWEN: Yes, and hence –

LAURA JAYES: – the electricity grid more reliable and cheaper when we’re talking about 80 per cent renewables in the system by 2030? I mean, the only reason we’ve got the power on at the moment – the only reliable system that you can call on – is coal. You can’t tell me when the wind is going to blow and the sun is going to shine.

CHRIS BOWEN: Yeah, well, I can’t tell you when the rain is going to fall either, Laura –

LAURA JAYES: That’s right.

CHRIS BOWEN: – but we drink water every day because we store it.

LAURA JAYES: But that goes to the whole reliability issue, doesn’t it?

CHRIS BOWEN: It does. And that’s why we’re going to build – we are building the transmission and the storage and backed by gas peaking when necessary to ensure a reliable system. But here’s the thing: the least reliable part of our energy grid at the moment is coal-fired power. That’s just a statement of fact. There hasn’t been a day in the last 18 months when we haven’t had a breakdown in a coal-fired power station. Expected outages – that’s maintenance, closing down – that’s different. We know about them, we factor them in. We had three of those yesterday in New South Wales getting ready for summer, making sure that the plants were up to scratch. Perfectly fine. But also on top of that we had two that just broke down.

LAURA JAYES: Sure.

CHRIS BOWEN: Now, that means that you’ve – so that means you’re right, we’ve got to get more investment on earlier. That’s exactly what we’re doing. That’s what our Capacity Investment Scheme, which the previous government promised by the way but they never delivered. They also had a thing called UNGI – Underwriting New Generation Investment – which actually should have stood for Unfortunately No Generation Involved because it never delivered a watt. I mean, not a kilowatt, not a watt, not a megawatt – nothing. Angus Taylor’s scheme. In contrast, our scheme is delivering 32 gigawatts of renewable dispatchable energy. That’s the difference Laura.

LAURA JAYES: Sure, but it’s still not enough right now, isn’t it? So my issue with this, Minister, is that, you know, we talk about reliable and cheaper power. And that coming from a main source of renewables, wind and solar. And that’s under your plan going to be 82 per cent by 2030. It is not cheaper and more reliable right now, because you don’t have the battery storage to back it up and it was underestimated the gas capacity that was required, was it not?

CHRIS BOWEN: No, I don’t agree with that. I mean, gas capacity, look at the ISP, it’s the most detailed energy plan of any country anywhere in the world.

LAURA JAYES: Well, hang on, you didn’t include it –

CHRIS BOWEN: You know, I talk to energy ministers –

LAURA JAYES: But you didn’t include it in the Capacity Investment Scheme when the Energy Security Board recommended you should do in 2022.

CHRIS BOWEN: Well, we’re dealing with a different set of circumstances. The previous government promised a capacity investment scheme and couldn’t deliver one –

LAURA JAYES: It was only two years ago.

CHRIS BOWEN: Yeah, and I’ve delivered one. But the economics of gas and renewables are very different. The economics of gas is very different to the economics of renewables. Now, if you look at the ISP, the point I was making, is that it calls and suggests and indicates that we need more gas capacity but less gas dispatched – ie, more to call on where necessary but you’re going to need it less and less. That’s appropriate. That’s very different to renewables, which are going to be operating all the time, but you need the batteries. Now, we’ve got a lot of batteries under construction. Our Capacity Investment Scheme Supports batteries. And, in fact, Laura, your point about reliability, what the Chief Executive of AEMO told me yesterday was that batteries were essential for getting New South Wales through yesterday, that batteries played a very big role yesterday.

LAURA JAYES: Yeah.

CHRIS BOWEN: Now, we have more coming on.

LAURA JAYES: Okay.

CHRIS BOWEN: We have the Waratah battery, big ones are coming on. They’re coming on over the next year or so. But, of course, that means we’ve got to keep our foot on the accelerator and keep to task. Now, the alternative is to slow down, stop all that investment and wait for nuclear in the 2040s. I’m not sure that helps us in the 2030s. On the contrary – it makes the situation less reliable in the 2030s.

LAURA JAYES: Yeah, that’s right. We have a less reliable system until –

CHRIS BOWEN: Yeah.

LAURA JAYES: – and beyond between now.

CHRIS BOWEN: If we wait. If we sit –

LAURA JAYES: But we have an unreliable system now, don’t we, Minister, because the transition has been messy. Let’s put it down to that. Essentially we’re being gaslit to think that our energy system is reliable and cheaper. I can’t see any evidence of that.

CHRIS BOWEN: Well, yesterday you saw the biggest reduction in energy prices in Australian history in the ABS statistics.

LAURA JAYES: Okay, all right.

CHRIS BOWEN: Today you’ve seen –

LAURA JAYES: Let’s go to that.

CHRIS BOWEN: And today you’ve seen the Australian Energy Market Commission put out its report showing that renewable energy will reduce energy prices over the next 10 years by 13 per cent and making the point that we have to keep going on that journey.

LAURA JAYES: Okay.

CHRIS BOWEN: We can talk about energy prices and those two reports, if you like.

LAURA JAYES: Yeah, let’s talk about those reports. Because you promised that retail electricity bills – let’s talk retail because that’s what people care about – would fall by $275 by now essentially, by the end of this year, beginning of next year. They’ve gone up. So when will those prices actually come down? If you say they’ve fallen 5 per cent, we’re talking about a rise of 21 per cent since you made that promise. So – what – we’re still 16 per cent worse off. That’s a long way from a $275 reduction on our bills, wouldn’t you agree?

CHRIS BOWEN: I said 35 per cent, Laura, not 5 per cent.

LAURA JAYES: Okay.

CHRIS BOWEN: 35 per cent was the figures that the ABS put out yesterday.

LAURA JAYES: Okay, so –

CHRIS BOWEN: The biggest fall in energy prices in Australian history.

LAURA JAYES: Yeah, but is that retail?

CHRIS BOWEN: Yeah, that’s the prices that Australians pay. That’s the impact of government policies, rebates, state and federal –

LAURA JAYES: But, hang on –

CHRIS BOWEN: – as well as getting on with the job.

LAURA JAYES: But we’ve got to remove rebates from that, because that’s not what you promised when you were promising the $275. Taxpayers are still paying for that.

CHRIS BOWEN: No, but Australians have received the rebates, Laura.

LAURA JAYES: Okay –

CHRIS BOWEN: I mean, they do exist.

LAURA JAYES: But if you removed the rebate –

CHRIS BOWEN: Australians are receiving them.

LAURA JAYES: If you removed that rebate how much are electricity prices really coming down by?

CHRIS BOWEN: Well, going forward what you’re seeing is the impact, and that’s where the Australian Energy Market Commission’s report comes in. If you’ve had a chance to look at that –

LAURA JAYES: I haven’t.

CHRIS BOWEN: – it shows very clearly the impact of our policies of the renewables that we will bring into the system. They confirm renewables are the cheapest form of energy available to Australians, indeed, to anyone really, but particularly Australians at the moment with our very strong renewable resources which are the envy of the world. We would be mad – we would be mad – it would be a disaster for emissions, for reliability and for prices to pause that renewable investment and wait for nuclear to come on in the late 2030s or 2040s.

LAURA JAYES: Okay. Well, let’s stick on your plan for a moment, because I know your feelings about nuclear, but to say that wind and solar is the cheapest form of energy, coal is also – doesn’t have a price tag until you start digging it out of the ground. So it really goes to the cost of distribution and transmission. Can you really say that about renewable energy when you’re spending billions and billions of dollars on transmission lines?

CHRIS BOWEN: Well, every – well, I’m not sure. I don’t really follow your point about coal because, yes, of course there’s costs of digging it up and then transferring it to the power station and burning it and distributing.

LAURA JAYES: And there’s costs of turning wind and solar into actual useable power as well.

CHRIS BOWEN: Well, it’s capital. It’s capital. There’s capital costs, of course. Their ongoing costs are very, very low. But I think if I can try and interpret your question, distribution and network costs exist regardless of how you generate the energy. I mean, you’ve got to get energy around the country. Look at Ontario, which is the opposition’s poster child. They’re spending between $20 and $60 billion Canadian on transmission even though they are planning to build nuclear. I mean, you need to move energy around your country or your province or your jurisdiction regardless of how you generate it. Same with distribution, which is the telegraph – the poles and wires, if you like. Unless they’re going to do nuclear to the node, you’ve got to get – you’ve got to invest in distribution regardless of whether the generation is from renewables or nuclear or coal or gas.

LAURA JAYES: And the Ontario example is a good one, but there’s also a few others. So the lead of Germany, for example, it has the second highest power prices in the world. They’ve gone pretty hard on renewables. The United Kingdom, which is about the highest electricity price in the world at the moment. California has a retail electricity price almost twice the average of other US states. So, I mean, we do have very different circumstances here, but it goes back to that cost –

CHRIS BOWEN: Yes, of course –

LAURA JAYES: The lived experience right around the world is the cost. And we’re the only country – I mean, China is building nuclear at record prices. They are still burning, you know, 60 per cent coal and they’re aiming to have about 150 nuclear power plants in the next couple of decades.

CHRIS BOWEN: Well, if you want to talk about China, I mean, China’s nuclear investment is a tiny, tiny fraction of their renewable investment.

LAURA JAYES: Okay.

CHRIS BOWEN: I mean, I’ve just come from meetings with the Chinese government. They are investing more in renewable energy than the rest of the world combined. And nuclear is a tiny fraction of their investment in renewables –

LAURA JAYES: Yeah, but it’s the combination, isn’t it? It’s the combination, isn’t it?

CHRIS BOWEN: But a tiny, tiny – it’s a tiny fraction. As it is everywhere in the world, as it would be in Australia under the Liberal Party’s plans. They want to spend hundreds of billions of dollars on – of taxpayers’ money. You know, they’re saying, “Oh, there’s too many of- budget funds.” This would be an off-budget fund of, you know, up to $650 billion, and it would provide 4 per cent of Australia’s energy needs.

LAURA JAYES: Okay.

CHRIS BOWEN: At best case. At best case, Laura.

LAURA JAYES: All right. Okay.

CHRIS BOWEN: I mean, this is a –

LAURA JAYES: Well, let’s talk about cost, then.

CHRIS BOWEN: They have not thought this through.

LAURA JAYES: Let’s drill this down, because I think the bells are going to ring in the House – they might be ringing.

CHRIS BOWEN: Yeah.

LAURA JAYES: But will you commit here and now to bringing down power prices? When will they come down and how?

CHRIS BOWEN: Well, as I said, we’re not walking away from our commitments and plans to bring in more renewable energy which is the cheapest form of energy. You’re seeing that play out, whether it be the ABS figures or the Australian Energy Market Commission figures, which are showing –

LAURA JAYES: With respect, I don’t think any household cares about those reports.

CHRIS BOWEN: – very clearly, as all the other figures –

LAURA JAYES: Look, I haven’t ready them, but it’s the retail price.

CHRIS BOWEN: Well, I have, Laura –

LAURA JAYES: You promised in – that $275 would come off people’s power bills by the end of this year. That hasn’t happened. So let’s start from this point now, from where the power prices are at the moment, which is about $1,979, the average household bill. How much is that going to come down by under your plan and when?

CHRIS BOWEN: Well, Laura, we are not walking away from our plans to introduce more renewable energy into the system. We released modelling from opposition which showed the impact of getting more renewables in by 2025. We’re keeping going with those policies. You say you don’t care about those reports. I do, because they show the impact of government policies. They actually do show that Australians are benefitting from our policies. That is real and Australians are, despite what you say – of course, energy prices have been going up around the world and we have always recognised people are doing it tough and are under pressure. That’s why we have enacted two rounds of energy bill relief. That’s why we capped coal and gas prices, as opposed by the Liberal Party who said they should continue to go up.

LAURA JAYES: Sure.

CHRIS BOWEN: So, we are taking those policies and we’re keeping going with the policy which increases reliability, increases our chance of reducing prices and reduces emissions.

LAURA JAYES: So, you’re telling me that people have to pay more to have a reliable system in the short term and you’re saying you’re keeping on with your plans –

CHRIS BOWEN: We’re not saying that, Laura.

LAURA JAYES: Well –

CHRIS BOWEN: When did I say that, Laura?

LAURA JAYES: Well, I’m trying to interpret what you’re saying, because I’m just trying to get – you know, you’re walking away from this commitment to bring power prices down. It was $275 in 2021 by now –

CHRIS BOWEN: No, I’ve just said – how many times – Laura, how many times have I said we’re not walking away from our commitments in this interview, Laura?

LAURA JAYES: I know, but I was talking specifically about price.

CHRIS BOWEN: Yeah.

LAURA JAYES: So, can we talk specifically about price?

CHRIS BOWEN: And we’re not walking away from our commitments.

LAURA JAYES: What is the commitment, though?

CHRIS BOWEN: We’ve been talking about price specifically for the last 5 minutes.

LAURA JAYES: So, what is the commitment?

CHRIS BOWEN: Well, you’ve out- well, our commitment is to continue with the policies we went to the election with, which is to introduce more renewables to reduce prices and to reduce emissions and to increase reliability –

LAURA JAYES: By how much and when, Minister? By how much and when?

CHRIS BOWEN: And the modelling shows, as you’ve said, $275 by 2025. That’s the modelling. We don’t walk away from the policies that that modelling was based on. Australians will judge us based on what we’ve done. They will judge us based on what we say we’ll continue to do, and they’ll compare our plans with the alternative, which is to stop, to pause and to see prices go up as we wait for nuclear, a form of energy that Australia has never used, to be developed for Australia in circumstances that are completely unrealistic.

LAURA JAYES: So, $275 on 2021 level retail bills within three months? Is that a commitment?

CHRIS BOWEN: Well, the modelling is there that we released from opposition. We’re not walking away from those policies –

LAURA JAYES: Why is it so hard to say, Minister? Seriously? I mean, like, I hate playing these games with you.

CHRIS BOWEN: Well, we’ve been talking about –

LAURA JAYES: We’re talking about cheaper power bills. People can’t see it coming down. We’re about to go into an election –

CHRIS BOWEN: I think we’re having a good chat –

LAURA JAYES: You promised this – we always do. We always do, Chris. And I really appreciate it.

CHRIS BOWEN: We always do.

LAURA JAYES: But this is forefront of people’s minds in a cost of living –

CHRIS BOWEN: Absolutely.

LAURA JAYES: – going into an election, you promised $275 off their bills by now in 2021. That hasn’t happened. And we can read all the reports, but the only report people are reading is when their energy – their bills go in their letterbox, right?

CHRIS BOWEN: Yeah, and when they get – yeah, and when they get those energy bills, they’re seeing a $75 a quarter rebate from the Albanese government.

LAURA JAYES: That’s artificial.

CHRIS BOWEN: In some states they’re seeing state rebates –

LAURA JAYES: It’s artificial, and they’re still paying for it.

CHRIS BOWEN: Well, I don’t think the people who are –

LAURA JAYES: It’s their taxes.

CHRIS BOWEN: I don’t think people who are seeing it come off their energy bills regard it as artificial. Maybe the Liberal Party, who voted against it, regards it as artificial, but we don’t. And I think – look, when I’m out and about, as I often am in Western Sydney where I live and other places around Australia, people understand that, you know, the energy markets around the world have been under huge pressure. You went through energy prices around the world, you know, just a few minutes ago. And you’re right – they’re very high in every country. But what people want to see is their government doing something about it. Now, we’ve got short-term plans for rebates which are helping Australians through this cost of living crisis, as you put it correctly. And we’ve got longer term plans – medium and longer term plans which see the cheapest form of energy come on more and more supported by storage, supported by transmission, supported by gas speaking to ensure reliability. That’s a good thing for Australia, the right policy mix for Australia.

LAURA JAYES: How is it the cheapest form of energy when we’re having to pay tens of billions that might even blow out even more for the cost of upgrading transmission? So it might be cheaper soon if batteries evolve –

CHRIS BOWEN: Well, I think I’ve –

LAURA JAYES: But it’s not cheaper right now, is it?

CHRIS BOWEN: Well, I think I just pointed out, Laura, that transmission has to be built regardless.

LAURA JAYES: Okay.

CHRIS BOWEN: You know, the Liberal Party says they’re going to build a nuclear power plant in Port Augusta. Well, the transmission lines are full from Port Augusta to Adelaide. They’re going to have to build new transmission. They’re going to need to have to build new transmission from the Hunter to Sydney if they build a nuclear power plant in the Hunter Valley because the transmission lines are full. I mean, this fantasy story that somehow you don’t need transmission if you build nuclear, that’s not the experience in Ontario. It won’t be the experience in Australia. Their plans are undercooked, undeveloped and not thought through.

LAURA JAYES: Okay.

CHRIS BOWEN: They don’t survive contact with reality. Yes, we need new transmission. Yes, we do. We’re building 5,000 kilometres between now and 2030, not the – they make up figures, the opposition. We’re building 5,000 kilometres of transmission by 2030. A thousand kilometres are already either built or under construction today. And the rest are well advanced in planning. So, yes, that’s got to be done. But that has to be done regardless. Angus Taylor used to say the same thing. When he held my job he talked about the importance of transmission. When he held my job he introduced regulations – laws of the land – to make transmission-building easier. That regulation tells you he runs through the transmission lines that he said were so essential to Australia’s future. They’re the same transmission lines that we’re building, Laura.

LAURA JAYES: Okay.

CHRIS BOWEN: This is not – we don’t – you know, I don’t say we invented this. On the contrary, I acknowledge, this has been a long time coming, this transmission. The difference is we’re getting on with it. We’ve allocated $20 billion to make it cheaper and faster. That’s the difference.

LAURA JAYES: Not cheaper now. Not faster yet. But, look –

CHRIS BOWEN: The transmission build –

LAURA JAYES: I wish – sure. I wish we could talk for another hour, but the bells are ringing and I’m told that you have to go.

CHRIS BOWEN: Yeah.

LAURA JAYES: So, look, you can come back any time, and it’s my pleasure to talk to you.

CHRIS BOWEN: I always enjoy seeing you and talking to you, Laura.

LAURA JAYES: It’s been a while. We’ll see you soon.