AM Agenda, Sky News

  • Transcript, E&OE
Subject: Energy.
17 October 2017

KIERAN GILBERT: Well the government making this decision based on the advice of the energy security board, as I mentioned there, so is ... The experts are on side?

STEVEN CIOBO: Well what we wanted to do, Kieran, was make sure that we had an approach that put consumers first. At its core this is about providing reliable and affordable energy that over time reduces emissions. It's a straight forward proposition. The key difference between what the Coalition's taking forward and what Labor's taking forward is under this Coalition plan we are making the electricity generators, the power retailers, do the heavy lifting. Whereas under Labor's plan, of course, their massive carbon tax, they're going to make consumers, make customers do the heavy lifting. So I wanted to invert it, put the emphasis back on making sure we had reliable and affordable power that over time, as I said, also reduces emissions.

KIERAN GILBERT: Underpinning that though is an expectation that the renewable sector, if we start there, that they will be able to stand on their own two feet. Is that right?

STEVEN CIOBO: Well I mean it's a straight forward proposition, right. So, Kieran, and bear in mind this is going to party room so it's not yet the policy of the Coalition, but-

KIERAN GILBERT: But as I said the back bench committee's happy with it. The outer ministry pleased with it, from what I've-

STEVEN CIOBO: Because obviously I always will respect the wishes of the party room. But at its core what we're saying is that really when you look at energy there's two major components to it. Of course, people want it to be, over time, reducing emissions, but they also want it to be reliable. We've seen the catastrophic failure in South Australia of Labor's approach there, which is all about just reducing emissions without a thought or care about making sure that it's reliable. Now, that's unacceptable.

We also want to make sure, though, that we have reliability and reduce emissions over time. That's the great thing about this approach, is a guarantee around reliability and a guarantee about reducing emissions. We put the focus and the emphasis and the heavy lifting back on the retailers in terms of what they're putting into the marketplace, and not penalisingconsumers by increasing power prices, which is what Labor's approach is.

KIERAN GILBERT: Now, the reliability guarantee, as it's going to be called, the Greens say by having that reliability guarantee that you're basically just ushering in more coal.

STEVEN CIOBO: Well, I mean, look, frankly the loopy Greens would say anything that's not 100% renewable and completely intermittent would be a failure. I mean you can't build an energy policy, you can't build a country, you can't build manufacturing, you can't build reliable energy supply off intermittent renewable power. When the sun's not shining, what do you do? Now, the key about this approach that the Coalition's putting forward, is that if you actually get a commercial approach that says - let's use solar and batteries, for example, and if the use of solar and batteries, which means it then becomes reliable, is put into the market and that is, of course, cheaper and more cost effective than, for example, burning coal or burning gas. Well, then that approach is obviously what will be adopted by energy retailers.

KIERAN GILBERT: So can you explain for our viewers, why is this approach - if you compare this national reliability guarantee versus a clean energy target, why is that better than that?

STEVEN CIOBO: Because it's about where you put the heavy lifting, you see, and this is the key. So under the Coalition policy, the heavy lifting is done by the energy retailers. They're the ones who have to make sure that they are complying with the two guarantees. That is reducing emissions, but also making sure that we have reliable or what's called dispatchable power. Whereas Labor's approach is to wack and to penalize consumers, making them pay much higher prices, an energy tax, a carbon tax, and so, they're the ones under Labor's policy that do the heavy lifting, and that's the key difference.

KIERAN GILBERT: In terms of the impact on power bills, I've been reporting this morning that my advice is that Mr. Turnbull and Mr. Frydenberg will today be detailing a reduction in the power bill for the average household of $115 per year.

STEVEN CIOBO: Well, we expect this will absolutely put downward pressure on energy prices. The great thing about this approach too, Kieran, is that it's technology agnostic. In other words, we're not there being prescriptive about what needs to happen in terms of the energy mix. We're saying the market will respond to the drivers from the energy retailers, the energy retailers, of course, will still be required to meet our emissions reductions target, so there's no walking backwards in terms of reducing emissions-

KIERAN GILBERT: But basically they come up with the mix in order ... They come up with the energy mix to achieve that.

STEVEN CIOBO: It's got to be two things. And just contrast it with South Australia. It's got to be reliable, and it needs to reduce emissions over time. And that's the difference to South Australia-

KIERAN GILBERT: Can you be that specific in terms of power bills though? Could it be more?

STEVEN CIOBO: It's about the guarantee the retailer offers, you see? So the regulator will impose on the retailer a requirement for them to use a certain amount of reliable baseload power and a certain amount of renewable power, and low emissions power actually-

KIERAN GILBERT: But in terms of the impact on the power bills of four households, the $115 reduction. Can you be that specific?

STEVEN CIOBO: Well that is the early modelling that's been done, that's been provided to us. This has got to be worked through. It requires the cooperation of the states and territories to come on board as well. We believe this is going to put downward pressure, because it's going to mean that there can be investor certainty.

The other big problem at the moment Kieran is that there's no certainty for a lot of those that might be investing into this space. Whether it's renewables or it's solar and batteries, whether it's hydro, whether it's gas, whatever the mix is, not a lot of certainty at the moment. And the government wants to fix that, put certainty back into the marketplace, so that people are investing. And bear in mind, with big energy assets, you're often talking multi decade returns.

KIERAN GILBERT: So you're not just placating the sceptics, the climate deniers?

STEVEN CIOBO: This is about reliable, affordable power that reduces emissions over time, and it's about making sure that we have a market based approach so that you've got the market itself, the energy market itself, the retailers responding to the requirements.

KIERAN GILBERT: Trade Minister, thanks as always, appreciate it.

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