Press conference on the Energy Ministers’ meeting

Interviewer
Press conference
Subject
Energy
E&OE

CHRIS BOWEN: Thanks for coming late in the day, everyone. Energy ministers of Australia’s states and territories and myself have just finished a very long and very productive meeting. I will say the issues we’re tackling, the issues we’re dealing with are difficult. And one meeting is not going to solve every problem in the energy system.

However, I am pleased that state and territory energy ministers have come together, with me, in a very cooperative and constructive way, and taken material and positive steps forward to help us manage this crisis today and to avoid further crises into the future. State and territory energy ministers with me, so that means Labor, Liberal and Greens, all three represented at the table tonight, have unanimously agreed on several important pieces of action; in fact, 11 different pieces of action and a communiqué will be shortly finalised and released out of that meeting. 

But I do just want to focus on a few things. We have also received briefings tonight from the Australian Energy Regulator, from the Australian Energy Market Operator and from the Chair of the Energy Security Board. Those briefings were very important and, of course, we also agreed that we would work to enhance the powers of the regulators to ensure that they have full transparency, particularly the gas market, of what is occurring and to ensure that all behaviour is in the best interests of the market and consumers at all times. 

Importantly, as I said, we agreed many points of action – around 11 – but I just want to focus on a few of them, on what I regard as very significant steps forward. Again, no silver bullet, no magic answers, but material steps forward in a very positive fashion. Ministers agreed that we would instruct the regulator, particularly the Australian Energy Market Operator to proceed at pace with the development of the capacity mechanism. Now, this has been work which has occurred for some time. From Opposition I said that we supported the principle of a capacity mechanism provided it was consistent with net zero and encouraged new technology. Again, energy ministers have endorsed effectively an approach of ensuring that it encourages new technology, that we have instructed the Australian Energy Market Operator and the Energy Security Board to proceed at pace with the development of a capacity mechanism and they will – they informed us – put out a further draft in coming days. And we are very keen to see that implemented as a matter of some urgency. 

Secondly, we agreed that we would give, working together, the Australian Energy Market Operator the powers to appropriately procure and store gas as a supply for situations exactly like the ones we faced last week. Australians might be surprised to learn that that power did not exist, that the Australian Energy Market Operator could not procure some gas and keep it in reserve to be released for urgent and crisis situations. That is technically possible. There are storage facilities around the country. We agreed to work to give AEMO that power and to give them that power expeditiously. Again, that won’t work today but it will give us the capacity and tools necessary to manage this crisis going forward and to avoid crises like this into the future. 

The final point I just want to emphasise is that the ministers agreed – and I think this in time will be seen as a significant development – we agreed to work towards and to progress in the lead up to our next meeting in July a national transition plan. Now, the reason why we are in this crisis today is because there hasn’t been enough planning about the changes that are necessary. The work that we took to the election is even more important. We need more transmission. We need more renewables. We need more storage. 

Now, we have the ’Integrated Systems Plan’ in Australia, which is a world’s best practice development in relation to electricity transmission, about poles and wires and big transmission across the country. That’s a world class document. It’s very good and of course our Rewiring the Nation policy will actually see it funded. But it is not enough. We need an integrated plan that deals with the entire gamut of the transformation which is underway and needs to happen more quickly. So, we need, what I call, a supercharged ISP, which deals with hydrogen, which deals with all the energy sources, which deals with transmission and which deals with all the things necessary for this transition. Ministers unanimously agreed with that. As I said, Labor, Liberal and Greens, from the largest jurisdiction to the smallest, agreed that we would progress that work and we would take what I call a supercharged ISP and turn it into a national transition agreement which covers all the work necessary, and ministers were very enthusiastic about that. So, again, I stress this meeting was never designed to solve all the problems in one go, but it does give us more tools, give the regulators more tools, to do the work that is necessary. We received very important and useful briefings from the regulators about the tools they would like, and we agreed to give them those tools and also we made those other agreements that I’ve referred to and we have agreed to work towards that particularly at our next meeting in July. It’s not long between now and July, but we’ve agreed to work as quickly as we can to make these things a reality. 

Happy to take any questions. Peter. 

JOURNALIST: Minister, with the gas storage plan, it sounds like that’s separate from the gas reservation.
 
CHRIS BOWEN: Yes. 

JOURNALIST: Was there any progress on that side?  

CHRIS BOWEN: When you talk about gas reservation obviously there’s the ADGSM, which is a Commonwealth policy; so, we focused tonight on issues which are joint responsibilities. The ADGSM is entirely a commonwealth responsibility. We did talk about it; particularly ministers raised it. I informed ministers of what I’ve said and Minister King, Madeleine King, has said publicly that we recognise that there is a legitimate conversation about whether it’s fit for purpose. I’ve referred to it, for example, as being as blunt as a basketball currently. That was discussed but that’s not a matter of joint responsibility. That’s entirely a Commonwealth responsibility so, of course, there was no decision made on that this evening. 

JOURNALIST: Minister, just in relation to the capacity market mechanism. Do you support coal being included in the funding?
  
CHRIS BOWEN: Well, look what I support is a couple of things. I support it supporting new technologies, so particularly storage technologies and renewables. But, of course, it’s designed to improve the capacity in the system. Now, I also believe it should be expert led in terms of its design, and the Energy Security Board have assured ministers tonight that they will have a draft out in the very near future for all to see. It’s not a draft written by me; it’s a draft written by the Energy Security Board. And I don’t want to write it, I want them to write it and to put it out for consultation. But I am confident given the principles that we’ve put on it, that people will see that it is a very useful contribution to ensuring increased capacity across the board, across the board. 

JOURNALIST: But do you support coal being included in the funding?
 
CHRIS BOWEN: I support the next draft being issued and ministers coming back to consider it as a matter of some urgency. 

JOURNALIST: So you haven’t taken a position yet on coal?
  
CHRIS BOWEN: I think the principles I’ve outlined are pretty clear that it should be supporting new technologies and by that I mean, you know – I support storage and renewables being a particular focus of the capacity mechanism going forward. But in terms of the detailed design, it’s on the ESB to do their work and to put it out for detailed consultation. 

JOURNALIST: It sounds like consensus is important and from a previous minister the CoalKeeper reference was dismissed from Victoria from the get-go; they wouldn’t accept coal being part of it. So, in that sense can we say that CoalKeeper is definitely off the table?

CHRIS BOWEN: Again, I accept your point that it has been controversial in the past, but I also agree with you that consensus is important. And I do want to say this: there was a real spirit of consensus in the room this evening and a real spirit of teamwork between all of us – Labor, Liberal and Greens. All three parties were represented at the room tonight because energy ministers come from all three parties, so, what we have approved tonight was approved by all – Liberal and Greens and the Labor Party. Of course, there’ll be views expressed and that’s quite appropriate when the capacity mechanism’s next stage of design comes out. But as the federal minister I say, I think the capacity mechanism is very important. We were supportive of the principle in Opposition. Of course, the details haven’t been properly released in terms of the next stage and I am determined to see it come into reality, but I’ll work very closely, as I have done, with all my state and territory ministers to see that happen. 

JOURNALIST: Did the state and territory ministers disagree about whether or not coal should be in the funding?
  
CHRIS BOWEN: We agreed that it should go to the next stage and that it should be done as a matter of urgency. 

JOURNALIST: In terms of that next stage, when do you hope to see it up and running? 
 
CHRIS BOWEN: Well, I want to see it out – the next draft out imminently and I would like to see it up and running as soon as practicable. I’m not putting a date on it at this stage, but it is a priority for me. 

JOURNALIST: Could you put a time on the gas storage plan because that’s something that could be brought about soon?  
 
CHRIS BOWEN: Yes; again, I’m not putting an exact date on it, but ministers agreed it should be progressed very urgently. 

JOURNALIST: And having something like that would have avoided what we saw recently, requiring the gas price caps – 
 
CHRIS BOWEN: It certainly would have helped. It certainly would have helped to have some national storage of gas by AEMO which could be released if and when required, and I’m sure when we were facing the sort of circumstances we were in last week, it’s the sort of thing which would have been very useful to have. 

JOURNALIST: And just looking at the transition to clean energy – should people sort of be expecting, you know, the future for us is as we move to clean energy more outages are going to be likely as we go through that sort of teething period?  

CHRIS BOWEN: No, I don’t accept that as inevitable. What I do accept is that that is a result if you get it wrong. That’s what we’ve got in this last week or so. We’ve got the results of getting the transformation in the Australian energy system wrong. Not enough planning. Not enough transmission investment. Not enough storage. Too many tries at an energy policy. More tries than Wally Lewis to get an energy policy for the country – 23 over the last 9 years. That’s the result of poor planning and a previous government which didn’t see the opportunities of transmission, didn’t see the opportunities of renewable energy. What we took to the election – 82% renewables, massive investment in transmission, increasing storage – is more important now than ever before, more important, because you’ve got to get this transformation right. So, I don’t accept that it’s inevitable that we’re going to see the sort of crises we’ve seen over the last week. That’s not a result of transitioning to renewables. That’s a result of poor planning and poor policy. Okay. One last one. Peter?  

JOURNALIST: About coal – the outages of the coal fired power stations have been a trigger for a lot of the increase in resorting now to gas use. Did the ministers come to any agreement about how you might either increase supply or just encourage the companies I guess to do a better job of keeping their units working?  

CHRIS BOWEN: Yes, we did, and you’re right. This has been in some instances and reported as a gas crisis, and I don’t think that’s quite right because much of it has been led by coal shortages and coal fired power station outages for a range of reasons: flooding in coalmines, outages, some planned, some unplanned. But it hasn’t been led by a gas shortage; it’s been led by a shortage of coal fired power. So, I agree with the principles. We did agree to continue to work together. Often these are matters where state ministers will be focused on things like rail access to coalmines, et cetera, and we agreed that work would continue and is very important. So, yes, we did. Okay. All and done. Thanks for coming out so late.

ENDS