Interview with Katie Woolf, Mix 104.9 Darwin
5 June 2020
Subject: The Regional and Remote Communities Reliability Fund and microgrid grants, gas generation, and the US-Australia Strategic Petroleum Reserve Lease Agreement.
KATIE WOOLF: You’re listening to MIX 104.9’s 360. Now, regional and Indigenous communities are set to benefit with the Federal Government backing feasibility studies into microgrids. The Government’s announced that they’re backing 17 microgrid projects with over $19 million in grant funding under round one of the Regional and Remote Communities Reliability Fund. Five of those projects are here in the Northern Territory, and joining me on the line to talk more about this is the Federal Energy and Emissions Reduction Minister, Angus Taylor. Good morning.
ANGUS TAYLOR: Morning Katie.
KATIE WOOLF: Minister, thanks so much for your time. These projects are located all around Australia, from very remote Indigenous communities in Western Australia and the Northern Territory to rural farming communities in Victoria. Can you tell me exactly what these studies are going to be looking into?
ANGUS TAYLOR: Well, they're looking into establishing microgrids. So this is a little self-contained electricity system that can support a local business or community that can be disconnected from the grid. The reason this is becoming so interesting now is the technology's changing, the cost of providing electricity to those communities is often very high because you've got to have long transmission lines which are expensive, and the new technologies that are emerging that can provide local electricity, dispatchable electricity - that means when the sun goes down and you've got solar cells, you've still got power – it’s coming down dramatically, and that can replace the old diesel generators which are expensive to run, dirty, and these are better alternatives. So, whether it's using hydrogen as your backup fuel, or we've got biogas using manure from dairy farms for instance, there's a range of ways you can actually ensure that you've got that 24/7 electricity you need to run a business or to deliver electricity at an affordable price, and this is crucial to one of those local communities. Five in the Northern Territory-
KATIE WOOLF: Yeah.
ANGUS TAYLOR: A range of different projects, and we're really looking forward to see some successful projects out of that.
KATIE WOOLF: Well, it sounds as though they could be real game changers for some of these locations. I mean, when you talk about being able to have that reliable electricity in remote communities and also, you know, in some of those rural areas, it would be a real game changer.
ANGUS TAYLOR: It sure would. And you know, they've got a problem where they have expensive electricity now either because they've got an old set up - a lot of them have microgrids but they're very old and very reliant on diesel - or they've got transmission lines over long distances which are very expensive to maintain, and they'll end up having to pay some of the cost of that. So, that's the challenge, and this is technology that's emerging all around the world now. Australia's really leading the way because we have so many regional communities, remote communities that need this kind of power. And so, we've got an opportunity I think to lead the world in how this is done. And in the process, we come up with technology solutions that can be used much more broadly.
KATIE WOOLF: So, what types of projects in the Northern Territory are we looking at?
ANGUS TAYLOR: Well, there’s a range. There’s five different projects but look, they'll tend to use some solar in the Northern Territory - certainly, at certain times a year that can play a very big role obviously - but they’ll tend to need some kind of backup as well. Hydrogen is one fuel source that a lot of them are talking about using. People talk about hydrogen, say that’s a new industry – it’s not. We produce lots of hydrogen-based fertiliser now, so it's not a new industry at all. But using it in electricity is new. So that's one area. Biogas is another area where there's potential, or in some cases, there's potentially access to methane, to natural gas as well, to use that backup. And there's new technologies emerging that make natural gas easier to integrate into it a little local system. So, a range of different technologies that can provide that dispatchable component alongside any renewables that are likely to be part of most of these projects.
KATIE WOOLF: So Minister, obviously this is funding for a feasibility study. How far away are we really from some of these microgrids from getting up and running?
ANGUS TAYLOR: We already have microgrids around Australia now. You know, so a lot of farmers now won't bother connecting up to the grid. They'll create their own little microgrid and that's becoming increasingly common because the costs of building these microgrids is coming down so fast. So, it’s not entirely new but doing this on this scale is new, and we definitely want to use new technology. So we want to get these feasibility studies done very quickly, and then move into building projects as fast as we can. Obviously, that'll depend on the individual project but, you know, we don't want to muck around here. We want to get some of these built and it solves a very real problem that these communities face.
KATIE WOOLF: Yeah, absolutely. Certainly sounds like a step in the right direction. Minister, can we talk more generally about the Territory and our energy? Where do you see the NT in terms of our economic recovery? You know, when we talk about the economic recovery of Australia post COVID-19, and where do you think the Territory fits into that?
ANGUS TAYLOR: I want the Territory to be an energy powerhouse for Australia, and potentially for the world. I think in my portfolio area, and there's other areas where the Territory has great strengths of course, but in my portfolio area, there's enormous potential in the Territory. And I look at the Beetaloo and McArthur basins. They are some of the most prospective opportunities for gas and oil in not just in Australia but in the world, and we've got to make the most of that. Gas in particular is a fuel source the world wants. It’s growing, demand for it is growing very, very fast, all around the world right now, faster than almost any other fuel source. And that is a phenomenal opportunity for the Northern Territory, because you have basins there in the Beetaloo and the McArthur that look as good as what we've seen around the world. For instance, in the US, we've seen a transformation of their energy sector on the back of reservoirs, of basins that look very much like what you've got in the Northern Territory. So this is a great opportunity. We've been working closely with the Northern Territory Government to get it happening. We want it to happen as quickly as possible and that solves a whole lot of problems. It creates an export industry, a new source of exports for Australia. It shores up our fuel security which is a big challenge for Australia as the Bass Strait, which is our traditional source of gas, runs down. And of course, you know, great economic opportunities in that for the Northern Territory.
KATIE WOOLF: Well speaking about that fuel security, of course that $94 million was invested when the crude oil prices were at record lows. You purchased that oil and arranged for it to be stored in the US. Is there capacity though for, you know, for Australia to have our own fuel storage and could somewhere like the Northern Territory be the perfect place for that?
ANGUS TAYLOR: Yes and yes, in simple terms. So the only reason we store it in the US now is because there's no storage left almost anywhere in the world except for the US controlled by the US Government. And so we were able to get that cheap fuel and we're able to store it there for now. But what we ultimately want is more storage in Australia. Where are some good places to store in Australia? Well where we've got existing refineries obviously is a good opportunity, but also in areas where we're seeing new basins opening up and the Territory is obviously the best example we have of that. So, it's been put to me, there's people who are doing work on this from the Territory and we'll have more to say about the process in short order, but we do think there are real opportunities for more storage in the Territory
KATIE WOOLF: When we'd previously spoken to Matt Canavan and I know I spoke to Keith Pitt about this last week as well, the Minister for Northern Australia now, we've talked a lot, I guess, about the Northern Territory being a future gas and manufacturing hub. The Northern Territory Government announced their recovery team, their Territory Economic Reconstruction Commission. Andrew Liveris is heading that up along with Paul Henderson, a former-Chief Minister here in the Northern Territory. It seems as though it's something it's been spoken about for quite some time though, for us here in the Territory. What do you think the hold-up is and why is it sort of taking so long?
ANGUS TAYLOR: Look, there's no doubt there's been some resistance politically to gas development in Australia in new areas like the Territory. On the east coast of Australia, we saw it for many years. I think that's fading because people realise this is a great industry. The industry made some mistakes, the gas industry made some mistakes early on on the east coast - in Queensland, for instance, and in New South Wales - and they've learnt from those mistakes and I think we're in much better shape now to build that industry out in the Territory. The Territory Government has been very supportive which is good news. That wasn't the case historically. We'd had a moratorium in place. And so I think things are aligning now to really open this up and we haven't seen that alignment to the same degree until now. Andrew Liveris, I know, has been a terrific exponent of this and of course, he's a Territorian originally.
KATIE WOOLF: Yep.
ANGUS TAYLOR: And has been working closely with us at the Federal level on thinking through some of these issues. But you know, it's great to see him working with the Territory as well.
KATIE WOOLF: Well I guess a lot of people in the Territory, there are still people who are concerned about gas and concerned about the fracking industry but there's a lot of us as well who are thinking: ‘okay, well we need to get the Northern Territory moving, so if we're able to do it in a safe and reliable way, which benefits the Northern Territory and can help the rest of Australia, it could be a good thing’. I guess the other part of it is the Northern Territory Government is touting renewables, as governments all around Australia are and should be, but they've committed themselves to 50 per cent renewable energy by 2030. Do you think that's attainable?
ANGUS TAYLOR: Look, that's a matter for the Northern Territory Government but what I can say is that the key to making renewables work is to having flexible gas generation. You need a flexible generator that can flick on when the sun goes down or the wind stops blowing, and it'll be probably an element of both solar and wind in the Territory, but solar in particular, and you know, you don't have solar 24/7. That's the reality of it. So you've got to have a complementary backup fuel source and gas is perfect for that. So I don't think these things are mutually exclusive and I think that's part of the reason why the support for gas has grown in recent years. Your point about the environmental issues with the gas developments - look, this is about balance, you've got to make sure you're managing those environmental issues and the approval processes are important. There's no doubt about that. We've learnt a lot about that on the east coast, as I said, we've had real challenges on this. I think the companies themselves have got a lot better over time. They're understanding much more now about how to build that support in the local community based on good science about avoiding negative environmental impacts. And you know, I think that bodes well for making this work in the Territory in a way that is good for the Territory economy and at the same time is good for the environment.
KATIE WOOLF: Well Minister for Energy and Emissions Reduction, Angus Taylor, we really appreciate your time this morning. Thanks for having a chat with me.
ANGUS TAYLOR: That's a pleasure.