Interview with Neil Breen, 4BC

Neil Breen
Electricity market reforms, electricity prices, renewable energy, electricity generation

NEIL BREEN: There's a big shift happening when it comes to Australia's power grid, and it could have ramifications for your household budget. The Energy Security Board has put forward a range of recommendations designed to guarantee energy supply for our growing population while transitioning from coal fired power to renewables like pumped hydro, battery, wind and gas generation as part of the plan for Australia's energy future post 2025. Key to the reforms though are putting special subsidy payments in place, okay, to stop the early closure of traditional coal fired power plants. And it's all designed to keep your power prices lower. Energy Minister, Angus Taylor, joins me on the line. Energy Minister, Angus Taylor, I have to say, I would pay $1000 to an average Australian who could explain to me Australia's power policy. I think the Morrison Government has tied us in knots and it's a riddle.

ANGUS TAYLOR: Well look, I bring it down to a very, very simple principle. The focus is on affordable, reliable energy. It has to be. That has to be a top priority. We've got to bring down emissions while we're doing that. But if we don't have affordable, reliable energy we don't have a pathway to make sure those 900,000 people who work in manufacturing have jobs; we don't have a means of making sure that small businesses, pubs and others who are doing it tough at the moment can, can make ends meet and we can't make household ends meet. So, that's why affordability and reliability has been the centrepiece of our focus. And look, Neil, it's working. We are seeing real improvement in that over the last couple of years. The truth is, the biggest barrier to that that we've seen in the last five years or so is the premature closure of big generators. We saw that down in South Australia. We saw it with Hazelwood in Victoria. We're going through the same, kind of, process in New South Wales with Liddell. And frankly, just recently, we saw what happens when you lose a big coal fired generator unexpectedly from the grid for a period of time with Callide in Queensland. So, you know, preventing that from happening, making sure there's enough supply in the market for affordable, reliable power, is absolutely central to our policy. And, that's why these reforms are so important.

NEIL BREEN: So we're going to subsidise the old coal fired power plants while we get our act together so post 2025 we're going to start relying more on renewables? Is that the basic story?

ANGUS TAYLOR: No. No. That's not, that's not right at all. That's not right at all. And the word subsidy is not a word the ESB has used or would use. It's not actually the right characterisation of what's going on here. What we're saying is you've got to have a balance in the grid if you're going to have affordability and reliability. You've got to have a balance between the intermittent renewables, which is going up on peoples rooves - you know, highest level of household solar in the world in Australia, and particularly strong in Queensland - you got to have a balance between that and the dispatchable power, the power that you can flick on whenever you need it. Now, coal has a role to play in that, gas has a role to play in that, hydro has a role to play in that. A balance of those different sources of energy, with the renewables coming into the grid at breakneck pace - very, very fast in Australia, faster than almost any other country in the world - getting that balance right is the key. It's not about subsidies. This is about making sure we've got dispatchability alongside the renewables that are coming in so fast, and bringing down emissions at a very rapid pace in our electricity grid.

NEIL BREEN: So, are any of the coal fired power plants getting any money from the public purse at all to keep operating?

ANGUS TAYLOR:  No. Well, in Queensland, of course, your generation is largely owned by the Queensland Government but it is run as a commercial entity. Look, this is a change in the market, not a set of subsidies. This is actually about making sure that the market has the right mix of generation. Most electricity markets in the world now are designed in the way the ESB is recommending. There's very few that aren't, we are one of the exceptions. The Western Australia market is designed in a similar way to what the ESB is recommending here. So this is not unusual. It's actually absolutely typical. In fact, our market has been unusual for not having this kind of design to make sure you've got enough dispatchable, reliable power that's in the system when you really need it.

NEIL BREEN: So post 2025, the report, what's it saying?

ANGUS TAYLOR: It's saying to keep that balance between the fast investment in renewables and having that dispatchable power that could be flicked on when you need it - whether it's hydro, or batteries, or gas, or indeed our ageing coal generators - to keep that balance, you've got to change the way the market works to ensure that there is reward for being available when the power is needed. There's got to be reward for that. And that's how any electricity market needs to work with fast rising investment in renewables. That's what they're saying. I think that's eminently sensible. That's how we're going to keep the lights on. That's how we're going to keep prices at an affordable level. And that's why these reforms are so important.

NEIL BREEN: Okay. Energy Minister, Angus Taylor, thanks for your time on 4BC Breakfast.

ANGUS TAYLOR: Good on you. Thanks.