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Interview with Brian Carlton, Triple M Hobart

27 May 2020

Interviewer: 
Brian Carlton

Subject: Electricity, Hazelwood power station, nuclear energy, carbon capture and storage, Marinus Link, hydrogen, technology.

E&OE

BRIAN CARLTON: The Energy Minister Angus Taylor joins me now. Good morning. How are you?

ANGUS TAYLOR: Thanks for having me, Brian. Very well, thank you.

BRIAN CARLTON: Pleasure. Tasmania's role in this, I'll get to shortly. What made you decide to put the small modular reactors - nuclear - on the agenda?

ANGUS TAYLOR: Well we need a lot of horses in the race. I mean, that's the point. We need a range of technologies. This is about balance. The point I make about nuclear is we have a moratorium, there's no plans to change that. But technology is changing. We're seeing these small modular reactors emerging. Only three have been built around the world, all in developing countries, but there's a pipeline of builds planned in developed countries. We need to watch that very closely. It's one of many technologies we need to watch.

BRIAN CARLTON: But we're using very similar technology to power warships and submarines, I mean, the French do it, the Brits do it, the Americans, the Chinese, the Russians. This is not entirely new technology.

ANGUS TAYLOR: No, but it's new in electricity generation for the broader community so that's the new piece. Watching the way that unfolds is, I think, very important. But the broader point I'd make here is we need to have a lot of horses in this race, and we need to back any horse that has potential to win. I don't think any one technology is going to solve all our problems. There's a little bit of an inclination in this area of energy for everyone to pick their favourite fuel source or their favourite technology and just back it into the hilt. The truth is, though, we need a balance, we need a range. Tasmania of course is wonderfully positioned on this and I'm sure we'll talk about that.

BRIAN CARLTON: Yeah, indeed, I will. Tell me, the Hazelwood stacks came down a few days ago and sort of made headlines all over the place and made some spectacular pictures on the TV. Was that symbolic for the death of coal as an energy source here in Australia?

ANGUS TAYLOR: Well Hazelwood was a grave error from the Victorian Government, where they closed a coal-fired power station, without any replacement. And we saw a spike in prices and a loss of reliability.

BRIAN CARLTON: And plenty of opportunity for Tasmania if we can export some of ours.

ANGUS TAYLOR: Sure. And of course we're very supportive of Tasmania moving into that position, and you do some of that now, of course, through Basslink. But look, the point about Hazelwood is, there were two parts to this. Number one is it was completely unplanned, and that is a disaster and we cannot have that. Coal will continue to play an important role in our grid for many years to come and we need to manage that very, very carefully and avoid that kind of outcome that we saw with Hazelwood.

BRIAN CARLTON: Yeah I noticed the blueprint, just on coal for a second, Minister, if I may. Just on coal, I noticed you're still having a crack at carbon capture and storage?

ANGUS TAYLOR: Carbon capture and storage is now widely accepted across the world. It seems to be more controversial here in Australia than almost anywhere else. The IPCC is recommending it, the International Energy Agency. I mean, they're not strongly right wing kind of organisations, but they're strongly supporting it. It plays, it's already playing a significant role in a number of countries. We've got the biggest project in the world here now at Gorgon in Western Australia. So, it's an important part of the mix, and this is the point I'd make, we need a range of technologies here. It's one that can play an important role as we move, for instance, towards producing green fertiliser for agriculture. Carbon capture and storage offers enormous potential. So this is a very, very important technology, one of many.

BRIAN CARLTON: Okay. There's a lot of talk around Tassie at the moment. Again we'll get to Marinus Link and all that in a sec, but hydrogen, making a hydrogen hub in the north of the state particularly. Are you backing that?

ANGUS TAYLOR: Very much so. I mean, we launched the National Hydrogen Strategy with the Tasmanian and other state governments late last year. We've committed $500 million, as Federal Government, behind that. And we've set up a $300 million fund which is dedicated to hydrogen. We'd like to see a number of hubs emerge across Australia. Obviously, we've got to put the money where the opportunities are best but I know the Tasmanian Government has strong aspirations in this area. What's so interesting about hydrogen is - two things in particular - one is it is dispatchable, and your point in your intro is absolutely right. You know, solar and wind - great. The costs have come down enormously but it's intermittent, and you've got to have that dispatchable back-up and storage if you're going to make sure the grid is reliable and affordable 24/7. So that's very important. And then the second point about hydrogen is it's very, has great potential in industrial processes. So whether it's production of fertiliser or petrochemicals or, you know, what is plastics right now. Hydrogen has enormous potential.

BRIAN CARLTON: The export itself, yeah, the export itself would be in the form of ammonia, would it not?

ANGUS TAYLOR: That's one way to do it and in fact ammonia is exported around the world now, but from gas. There's potential to do this from hydrogen created particularly from solar and wind as well.

BRIAN CARLTON: It's just a bit more stable and a little more cost effective in terms of the transportation of it rather than actually compressing the hydrogen gas down into liquid form as you'd be very aware. Tell me the Marinus Link - if we're going to have a so-called Battery of the Nation here with pumped hydro which we've discussed program at some length, the capacity to get it off the island and into the mainland markets - particularly Victoria where, as you've indicated, they're going to struggle to meet demand from time to time - we need the extra capacity. How far along the planning chain is the Marinus Link?

ANGUS TAYLOR: It's progressing well. I mean we're talking regularly with the Tasmanian Government on it. I mean, we want to give this every chance of success. I was around, working in northern Tasmania, at Bell Bay of all places when Basslink was first planned and everyone said: ‘Oh geez, it'll never happen.’ But it did of course and I think Marinus, similarly, is a great project but we've got to make it work. We've got to make sure that it's not an impost on the electricity consumers of Tasmania-

BRIAN CARLTON: Who is going to pay for it, Minister? Who is going to pay?

ANGUS TAYLOR: That's the point. That's exactly my point which is that consumers need to pay for it and it is likely that most of the power and this is the work that's been done now - will be used by Victorian consumers to firm up their intermittent grid. And so if that's the case, the consumer needs to pay. I mean it's as simple as that.

BRIAN CARLTON: So you'd be wanting some kind of, what, financial contribution from the Victorian Government at the front end of the project?

ANGUS TAYLOR: Well, consumers need to pay for the power they use and the type of power they need, and that's in their bills. Now, when that comes and, you know the structuring issues we’ve got to work our way through but the idea that there should be an impost on Tasmanian electricity consumers for power that's mostly used elsewhere in the nation, you know, that doesn't make sense obviously.

BRIAN CARLTON: Yeah, indeed, and you would get some vigorous opposition I would imagine from the state government here should that be considered as part of the plan. Tell me, grid stability is a problem too, is it not? And look, supplementary to that, the Tasmanian State Government is planning on pulling out of the National Electricity Market in the not too distant future. Does that impact any of your planning at a federal level?

ANGUS TAYLOR: I'm not sure the Tasmanian Government can pull out of the National Electricity Market because it wants to sell to Victoria and already does, and uses power from time to time from Victoria. I mean that integration isn't going to go away any time soon.

BRIAN CARLTON: Okay. Alright.

ANGUS TAYLOR: But look, the important point, you make a point about grid stability - it is extremely important that we deal with this. It means we've got to have dispatchable power. Whether that's hydro - of course, Tasmania is blessed on that - gas or hydrogen over time, batteries can play a role in this, we need that mix of dispatchable generation.

BRIAN CARLTON: Okay.

ANGUS TAYLOR: And technology is helping to solve this problem.

BRIAN CARLTON: Can you promise us cheaper bills? [Laughter]

ANGUS TAYLOR: Well, I mean, look, I think the point about this is it is technology not taxes. We don't want to tax energy. We don't want to make it more expensive. We want to use technology to bring the price of energy down and maintain reliability and security.

BRIAN CARLTON: Okay. Appreciate your time, Minister. Thank you and we'll do it again. Thanks.

ANGUS TAYLOR: Cheers.

ENDS