Interview - ABC Radio National Breakfast
PATRICIA KARVELAS: Chris Bowen is the Federal Minister for Climate Change and Energy and I spoke with him a very short time ago.
CHRIS BOWEN: Thanks, PK.
PATRICIA KARVELAS: You’ve agreed to 11 points of action with the states but say there’s no silver bullet and no magic answers. So, will this plan do anything to get energy prices down for households and industry in the short term?
CHRIS BOWEN: Well, I think, Patricia, it is a big step forward, important step forward. Some of the steps will apply very quickly and others of them are an agreement to work in the medium term, and these are all important things. There was a real spirit of cooperation around the room and state and territory colleagues – Labor, Liberal and Greens all represented at the table – all agreed that we’re in this task together. Now, some of the immediate things, like giving AEMO the power to buy some gas and keep it in storage so it can be released in crises like the one we faced last week, will have a pretty early effect and certainly give us more powers to help us navigate crises like these. Others like –
PATRICIA KARVELAS: How quickly could that kick in – sorry to interrupt.
CHRIS BOWEN: Yeah, well, that will be implemented very quickly. So, that gives AEMO those powers to help us navigate this crisis, you know, in the nearer future as opposed to, say, our agreement to have what I call a supercharged integrated systems plan, an agreement to have all the investments across all the technologies necessary for the massive transition that we need to do to renewables, to have that integrated at a state and federal level. Obviously, that’s a longer term plan but a very important one as well.
PATRICIA KARVELAS: One of the key agreements is to move forward with the so called capacity mechanism. Now, that would see energy retailers pay power providers to keep extra capacity. How much capacity are you hoping they’ll hold on to, and what would be the trigger for starting to use it?
CHRIS BOWEN: Well, it’s an important, if you like – it’s an important safety measure. It’s an important safety net to say in issues again like the ones we had last week we want spare capacity in the system that can be turned on. So, what we have said is we want that to encourage new investments in renewables and storage, for example. That’s very important. It can’t just be old style energy generation. We want that to encourage new investments. And that provides that extra capacity. The previous government had it on a time line for 2025. We’re going to do it quicker than that and we’ve asked the Energy Security Board to come out with their next iteration of the plans in the coming days, and they’ll do so.
PATRICIA KARVELAS: So, what kind of capacity are we talking about? You just mentioned renewables, but will it include extra gas or coal or is that excluded?
CHRIS BOWEN: What we’ve asked is for the experts in the Energy Security Board to issue the next draft. And what we’ve said is we’ve given clear instructions as the state and territory ministers, we want it to encourage investments in new styles of technology. That can include things like pumped hydrogen and it can include renewables. But in terms of the detailed design, the Energy Security Board will issue the next paper in the next few days.
PATRICIA KARVELAS: So, does that mean if they come back in the next few days gas and coal still has to be in, that you have to accept that?
CHRIS BOWEN: No, it will be a decision for ministers.
PATRICIA KARVELAS: Okay. And do we know what your predisposition is on that?
CHRIS BOWEN: But we’ll work it through, Patricia. I want to see the expert paper. I believe in letting people get on with their jobs. The Energy Security Board are a panel of experts. I have confidence in their work. I want it out for ministers to see the next round of work. Obviously, there will be – this has been a very controversial thing. From Opposition, I supported the capacity mechanism. We were very constructive. I did say that it needs to meet certain criteria, like being consistent with getting to net zero, consistent with the transition task underway, consistent with renewables. That was reinforced by ministers unanimously yesterday – as I said, Labor, Liberals and Greens working together across the table. That’s reinforced and endorsed by them, effectively. And I welcome that. I also think we’ve got the Energy Security Board. Let them – I’m not going to write their paper. I want them to do their work and to get it out for ministers and for everybody to see in the next few days so we can get on with it.
PATRICIA KARVELAS: The plan here is to make the retailers pay. Have you spoken to them? Do they accept they’ll have to accept that cost to help stabilise prices in the longer term?
CHRIS BOWEN: I’ve been in constant contact with the retailers since I was sworn in last Wednesday. I’ve done little else, Patricia. And, yes, there is support for the capacity mechanism. There’s different views, as you would expect, around the energy sector, around some of the details about how it should work. I’ve heard those views from energy companies, and I’ve said that we’ll work for a sensible outcome. Perhaps not everyone will be happy with the outcome in all instances. That’s how the system works, as you would expect. But yes, there’s broad recognition that we need something like this and, as I said, I want to see it happen sooner than the previously announced time line.
PATRICIA KARVELAS: Chris Bowen, just on gas, you’ve argued the government can’t force more gas to move from Queensland to southern states because pipelines are already at full capacity, but the Australian Pipelines and Gas Association says it’s not true and that one key pipeline was only at 59 per cent capacity yesterday. So, what is going on? Is there room to send more gas south?
CHRIS BOWEN: The pipelines have been full certainly at various points last week. When the Liberal Party was out there saying the government should be getting on the phone to get more gas into the pipelines, the pipelines were full. I’m not sure how they wanted the gas brought down to the eastern states – by telepathy, for example. We were briefed yesterday by AEMO, for example, all the state and territory ministers, who said they’re satisfied with the amount of gas in the system – coming into the system at the moment. So, this has been primarily a coal fired power crisis. Obviously, there’s a lot of issues at play here. There’s been international circumstances. There’s been all sorts of circumstances. But at its core, this has been – this crisis has been led by outages in coal fired power stations, floods in coalmines, et cetera. So, getting more gas into the system has been important and we did that.
The gas supply mechanism was triggered last Tuesday night. It worked. We got more gas into the system. Madeleine King and I both got on the phone to gas companies, to energy companies, and worked across the board, as I said, through all the waking hours to get more gas into the system with the gas companies and it worked. And the pipelines were full when Peter Dutton and others were out there, and David Littleproud, saying all the government needs to do is get on the phone in some sort of fancy land; all you need to do is a phone led recovery, they didn’t know at that point that the gas pipelines were full and working at 100% capacity. I’m really not sure how they thought we were going to get more gas around the system. Either they were being very effectively naive or dishonest. Maybe they thought there were carrier pigeons that could pull gas around in little balloons or something. I’m not sure what they were getting at.
PATRICIA KARVELAS: On the domestic gas trigger, there was talk it would be rejigged to be activated by price and not supply. Will that happen?
CHRIS BOWEN: Well, look, as Madeleine King has said, she’s looking at the full options there and I think that’s a good thing, because the gas trigger – the ADGSM, to use its technical term – is a very blunt instrument as I’ve said, blunter than a basketball, in effect, and if it were pulled today it wouldn’t come into force until 1 January and, as you’ve correctly pointed out, Patricia, it’s a price trigger, not a supply trigger. So, Madeleine King has flagged that she’s looking at that going forward, and I support her in that work.
PATRICIA KARVELAS: Former Energy Security Board chair Kerry Schott says the current crisis shows gas is a key transition fuel as we head towards zero net emissions by 2050. Is that your view as well? Is gas going to play a major role in our transition?
CHRIS BOWEN: I’ve said consistently that gas has a role to play for the foreseeable future, Patricia. I said that in Opposition. I say that in government. And there’s been ideology on both sides of this debate. We’ve had the previous government say there’s a gas fired recovery. That was a lie. It was fraud. There is no gas fired recovery. We’ve had others say all gas should leave the system immediately. That’s equally silly, frankly. We need gas to stabilise to peak and firm while we’re building the storage in the transmission, which has to go along with renewables. We don’t have that storage and that transmission infrastructure at the moment. When you’re peaking and firming, you only really have a few options and gas is an important one. One of the benefits of gas is of course gas fired power stations, unlike coal fired power stations, can be turned on and off really quickly. That’s very important flexibility. That means you’re not burning fossil fuels when they’re not required. That’s why gas will play a role. I’ve said that consistently since I became the Shadow Minister for Climate Change and Energy and also consistently as Minister for Climate Change and Energy.
PATRICIA KARVELAS: Many existing coal fired power stations have been shut down for maintenance. The New South Wales Energy Minister wants them reopened to help meet immediate power supply needs. Will more plants be fired up? Do you have a guarantee on that?
CHRIS BOWEN: Yeah, Matt Kean in particular is working on that in New South Wales. There’s all sorts of issues about coal supply, train rights, coalmines, et cetera. He and I have been working closely together as have all the state and territory ministers. It wasn’t just the meeting yesterday. I spent, again, plenty of time on the phone to all of them over the last week and particularly in New South Wales that’s an issue and Matt Kean has indicated he’ll continue to work on that, and I welcome that.
PATRICIA KARVELAS: We’re out of time. Thank you so much for joining us.
CHRIS BOWEN: Good on you, PK. Nice to chat.