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Doorstop with Tasmanian Premier, Will Hodgman, Poatina Power Station, Tasmania

13 December 2018

Subject: Energy

E&OE

STEPHEN DAVY: Good morning and welcome to Poatina Power Station. First of all, I'd like to pay my respects to the Traditional Owners of this land and their leaders, past, present and emerging. Here at Poatina, we're at a site that's very important in our history. Great Lake was the site of our first large-scale hydro power about 100 years ago, and that power station in Waddamana was decommissioned when Poatina was built 50 years ago, and Poatina now uses the water at Great Lake. And that water then ends up in Launceston down the Cataract Gorge. But Poatina is also the site of one of our 14 pumped hydro projects that we're investigating with the support of ARENA. So it is very appropriate that we're here at Poatina while we talk about the white paper that we released today. But I'm also very proud to have the federal Energy Minister, Angus Taylor, here; the Premier of Tasmania, Will Hodgman; and the Tasmanian Energy Minister, Guy Barnett; as well as representatives from TasNetworks. So, Minister Taylor is now going to talk about the exciting new announcement that he has to make today. So I'd like to hand you over to Angus Taylor.

ANGUS TAYLOR: Well it's absolutely wonderful to be here with Stephen and the Premier and Guy. This is important for the federal Government, but it's a particular pleasure for me to be here in Tassie, seeing how Tasmania is jumping ahead, again, and doing so well. The economy is going gang-busters for many years now. They have a very good government. Tourism, of course, education in Launceston and many other initiatives that are happening which the federal Government has supported over recent years. But of course, one of the areas where Tasmania has enormous potential is in energy, and it's great to be here at Poatina looking at the extraordinary assets that Tas Hydro has and the potential they have to deliver, not just for Tasmania, but for all of Australia in the future. Today, we have announced that we're opening expressions of interest in our Underwriting New Generation program. This is about making sure we have enough supply and enough competition in the market to drive prices down across the national electricity market and ensure that all customers get a fair deal. And Tasmania has an important role to play in that process of making sure all Australians get a fair deal on their electricity prices; making sure we've got that 24/7 reliable, affordable power that is so central to our policy and so critical for all Australian households, hardworking families, small businesses and, of course, big businesses that employ so many Australians in energy-intensive industries. Of course, we've also seen the release today of an important new report from Tas Hydro telling us how much extra potential there is in the Tasmanian Hydro system. I've always believed that hydro has an extremely important role to play in our energy network, and certainly always has here in Tasmania, but it can play a bigger role across Australia. And of course, the report released today tells us how much extra potential there is here. This is an extraordinary opportunity for Tasmania; a great opportunity for the rest of Australia; and most importantly, very important for ensuring that Australian electricity consumers, households, families and businesses get a fair deal on their electricity prices.

WILL HODGMAN: Can I just make some brief remarks, and then we can take questions. Thank you. Look, wonderful to be here. To Steve and the Hydro Tas team and to TasNetworks: thank you very much for the great work you're doing and for hosting us today. Angus, wonderful to have you here in Tasmania and to continue what has been a very strong collaboration between the state and Commonwealth governments for some time and significant investments, but most importantly, working in sync to deliver on all that we've promised and to realise our dream of Tasmania being established as the nation's renewable energy state, but also the nations renewable energy battery, and it's wonderful to have Angus here, who's in close contact with my Minister, Guy Barnett, to continue that work. But we've been working collaboratively for some time now and the former energy minister Josh Frydenberg now happens to be our nation's Treasurer, and former treasurer, Scott Morrison, who's of course now our Prime Minister. And with a new Minister for Energy picking up, the amount of work that's been done - we're in a real strong place to move our ambitions forward. Our plan for Tasmania's energy sector is not only to be the nation's battery and to export what is a valuable commodity into the national market and increase revenue base for our state and to continue our strong economic growth; but to make sure that we continue to keep power prices down, to keep Tasmania's energy system secure and reliable and position Tasmania with that great, competitive advantage at a national level that will transform Tasmania's economic future like never before. This is once-in-a-generation stuff and it's why we're working so closely with the Commonwealth, and piece by piece we're putting together a very strong case for Tasmania. And I want to thank the extraordinary commitment that's been demonstrated by the Commonwealth Government. They have, like no government before, wanted to work very closely with us in this once in a generation opportunity, and we look forward to that work continuing over the coming months and beyond. So, thank you very much, Angus, for being here. We will take some questions.

JOURNALIST: Energy Minister, you've talked about Tassie's potential. We obviously can't really get all that potential out to the mainland without a second Basslink Interconnector; is there any chance that that could happen - you might provide funding for that in the lead-up to the next federal election?

ANGUS TAYLOR: Well of course, we've already provided funding jointly with the Tasmanian Government on doing feasibility work. That work is ongoing. We're looking forward to seeing the outcomes of that in the near future, and that is a very important part of making sure we realise the full potential of Tasmania's energy sector. That work we're keeping a very close interest in and we're watching closely, we're very involved. ARENA, of course, is part-funding it, which is a Commonwealth Government agency, and we look forward to the outcomes.

JOURNALIST: How is that study going?

ANGUS TAYLOR: It's progressing well, and as I say- look, Basslink was the first connection to the mainland and that was good for Tasmania and good for the mainland. We've got a similar business case emerging here which shows - and will show, I'm sure - that there's real potential there. We've got to make sure it stacks up. Any investment by Australian taxpayers or Australian energy consumers has to stack up. But, we know what extraordinary assets, what extraordinary potential, there is in the energy sector here and how that can help the rest of Australia.

JOURNALIST: Why announce this registrations of interest process here in Tasmania when we don't have that guarantee of a second Basslink Interconnector?

ANGUS TAYLOR: Well I think Tasmania has enormous potential to provide that 24/7 reliable, affordable power that Australia needs. And of course, we're doing the work right now in making sure that if- that the interconnection between here and the mainland is what is needed to make the most of that. So that work is ongoing, it's work that we're investing in, we're working at it as quickly as is possible. But, it's all got to stack up. We are responsible for every Australian taxpayer and consumer to make sure they get a fair deal. And the truth is that Australians have paid too much for electricity and we need to make sure they get a fairer, better deal.

JOURNALIST: What kind of projects could be- could receive federal Government investment through this process?

ANGUS TAYLOR: Well it has to be 24/7 reliable, affordable power; power that means that when you flick the switch, on it goes. Now, we're getting an enormous amount of solar and wind coming into the system - a 250 per cent increase in the national electricity market in the next three years. From nine per cent, up to 23 per cent in the next few years. And that means that we have to be able to have power available when we need it, when we flick the switch, to complement that solar and wind coming into the system. And hydro is one extremely good means of doing that. It's not the only one. So there's a range of technologies but they must be dispatchable.

JOURNALIST: What's the process from here? When we announced which projects you'll support?

ANGUS TAYLOR: Well, we're working towards expressions of interest coming through mid-January. We'll work that down to a short list, and then we'll be working through those individual projects and picking the very best of them. Ultimately, they will be chosen on very clear criteria, which is making sure we've got enough supply in the market, to drive prices down, and to keep lights on; and making sure we've got enough competition in the market to ensure that Australians get a fair deal.

JOURNALIST: Obviously, it's a lengthy process. I mean, can the public sector rest assure that it's on track for Tassie?

ANGUS TAYLOR: Well, it's a pretty quick process. We're moving at a rate of knots here. We've gone through consultation over the last couple of months. The expressions of interest will go through to January. Of course, this process will roll for four years, that's the intention, but the first round of it - expressions of interest by the middle of January or so, and then we'll be moving into a short list and working on each of those projects.

JOURNALIST: Will you rule out supporting coal-fired power stations as part of this?

ANGUS TAYLOR: This is technology-neutral. I mean, what we need is reliable, affordable power, which is available for when Australians flick that light switch; when factories and other big energy users around Australia need it. And that means we've got to complement the enormous investment - $15 billion of investment right now going into solar and wind - with power that is there when you need it when you flick the switch.

JOURNALIST: Are there any specific projects in Tassie that you would like to put forward in the expression of interest in this?

ANGUS TAYLOR: Well, we're standing here with Tas Hydro and they've got some pretty interesting opportunities here. There's no doubt about that. So we would very much like Tasmania and Hydro Tas to be involved in this process. [Inaudible talking]

JOURNALIST: How important is it that Tassie has a second Basslink interconnector?

WILL HODGMAN: Oh look, the most important thing that we're focused on is ensuring that we've got reliable, secure energy, and we've got that. Our dam storage levels are up where they should be and we are investing in our renewable energy base, not only in hydro, but also wind; and that secures Tasmania's energy future. The opportunity for us to export what is a valuable commodity into our national grid that's been unstable and to profit; and to reinvest that into improving the lives of Tasmanians, the services we deliver and strengthening our economy even more, is a once-in-a-generation opportunity.

JOURNALIST: What kind of projects do you think should receive- or a Tasmanian project should receive investment through this?

WILL HODGMAN: Sure. There's plenty of opportunities for Tasmania to continue to be a leader, in the national context, in renewable energy. We'll be 100 per cent self-sufficient by 2022. So Tasmania is the nation's renewable energy state. We've got a lot of great ways that our Commonwealth Government could co-partner and invest here.

JOURNALIST: In terms of jobs, I guess a lot of Tasmanians could be given a job with this whole process. How important is that?

WILL HODGMAN: Yeah, and I should allow also Minister Barnett, who's come a long way, as have you all. Thank you for being here - to talk a little further too if required. But I mean, what we are talking about here is an extraordinary amount of investment in infrastructure. It's job creating, and it would further drive Tasmania's economy. We're already the fastest growing economy in the nation. Imagine what multibillion dollar investments and thousands of jobs created in an energy sector into the next generation would mean for our state?

JOURNALIST: Is there any point pushing forward with all these projects now we've got nowhere to send all the power?

WILL HODGMAN: Well, we will continue to make a very strong case for a second interconnector. It's not simple work and it requires a lot of effort; and that's being done collaboratively between the State and Commonwealth governments. We'll continue to, not only produce sufficient energy for Tasmanians, but into the future, make sure we will, in fact, have the capacity to export our product into the national grid.

JOURNALIST: Can I ask another question [inaudible]?

WILL HODGMAN: Sure.

JOURNALIST: So, the AEU's about to dump 2000 Christmas Grinch cards your way. How do you feel about that?

WILL HODGMAN: Well, what I think most Tasmanians want to see is union leaders being serious about negotiations, not stunts. We've got an affordable, sensible pay rise that we want to start extending to those who work in our schools and our hospitals, in public services. At Christmas time, we want them to receive the benefit of that pay rise. I would hope that union leaders, rather doing stunts, would actually engage with our members. Ask them what they want. Do they want to accept the pay rise and the improved conditions that we are offering through these negotiations? Or are they just worried about stunts?

JOURNALIST: [Inaudible] Hydro maybe? [Inaudible] Thank you.

STEPHEN DAVY: Hi, thank you.

JOURNALIST: What kind of project do you think Hydro could put forward as part of this process?

STEPHEN DAVY: So first of all, today, we're releasing our white paper which demonstrates that there's 400 megawatts of capacities here in Tasmania that will be unleashed with further interconnection. Victoria's demand peaks in the summer, and during summer, demand in Tasmania is low, so that the excess hydro capacity in Tasmania is the first thing that will get utilised if there was more interconnection. There's also the potential to invest in our existing plant and to build the level of Lake Gordon to create hundreds of- more megawatts of capacity. Then on top of that, we've got 14 pumped hydro projects that we're investigating at the moment. One of those projects is here at Poatina. That would mean a new pond at the bottom of Poatina, a new Poatina power station of about 500 or 600 megawatts, and a new [inaudible] set alongside this wonderful piece of infrastructure that you see behind you.

JOURNALIST: And where would all that energy go?

STEPHEN DAVY: Well, this is Tasmania's opportunity to meet the challenge in the national market. While we're seeing a lot of new renewable energy being built, that solar and wind energy being built across the nation, that's making the lives of the coal-fired generation a little bit more difficult. So, if that coal-fired generation closes, new dispatchable forms of energy are going to be needed; and pumped hydro is a great source of that new dispatchable energy, and Tasmania is a great place to build new pumped hydro projects. We have the existing hydro system. We have the elevations required, and we've also got very short distances from our existing reservoirs to new reservoirs [inaudible].

JOURNALIST: With the analysis released today, can you talk us through the actual work that were involved in that?

STEPHEN DAVY: Sure. So, we've been supported by ARENA to develop this analysis today; and what we've released today is a white paper that summarises the amount of surplus capacity that exists in Tasmania's hydro system that would be unleashed with limited action. So [inaudible] additional investment, we 400 megawatts of available hydro capacity here in Tasmania, and that would be available as soon as more interconnection was available to help meet Victoria's summer demand peak.

JOURNALIST: I'd imagine a new interconnector would cost a lot of money and take a lot of time to build, though?

STEPHEN DAVY: Well, TasNetworks are working very hard with ARENA to understand what would be needed for more interconnection, and they've put out estimates in their initial discussion paper about the cost of further interconnection.

JOURNALIST: How vital is another interconnector for you and would you like to see that announced in the next federal election campaign?

STEPHEN DAVY: Look, it would be great to see more interconnection. The details about how such a project should be funded and financed is really something that TasNetworks and the Tasmanian Government are working on.

JOURNALIST: Great. Thank you.

STEPHEN DAVY: Great, thanks everybody. Thank you very much, and thanks for coming to Poatina.