Transcript - 1233 ABC Newcastle & New England - Wednesday, 6 September 2017

SUBJECTS: Liddell Power Station; Australia’s Energy Crisis; Energy Prices





PAUL TURTON: So where do you stand in the transition to renewables, do you reckon we’ve got it all wrong? Have we kind of jumped too early maybe? Joel Fitzgibbon is the Labor Member for Hunter and he is with me now. Thanks for joining us Joel.


TURTON: There are two competing management notions on moving forward, the Chinese would say the journey of a thousand miles begins with a single step. The Inuits in North America say that it’s impossible to jump a chasm with two small leaks. Have we got our philosophy in regard to transition to renewable energy right?

FITZGIBBON: That’s very good Paul, well we do know that the whole world is moving very quickly towards a cleaner energy future there’s no doubt about that and what’s happening as a result of that in Australian is that the energy companies have their eyes set on the next generation of generators, not the last generation of generators.

TURTON: Did we ditch coal too prematurely? 

FITZGIBBON: Well no one has ditched coal, that’s the key point here, no one is ditching coal. The energy companies with their aging coal fired power plants have come to the decision or the conclusion that it’s not worth spending literally billions of dollars in new coal fired plants when you need at least 40 years of operations to get a good return and when the energy landscape is changing so quickly, we don’t know what the energy landscape is going to look like in ten years let alone in 40 years so they are simply not interested in investing in new coal generators so it’s not up to government, it’s up to them. But it is up to government to put an energy policy in place that provides them with investment certainty and this is what’s been happening. Five years ago now Tony Abbott promised to unravel the carbon price the former Labor government had legislated so investors had certainty and since then we’ve had no policy certainty there and therefore no investment.

TURTON: So what about intention consensus, we know that Trump has retreating from previous agreements as well, is the whole international energy market up in the air.

FITZGIBBON: Well none of us are really sure what Donald Trump is doing on energy policy but I think it’s still true to say notwithstanding what he may or may not be saying, the world remains committed to a lower carbon future but in any case Paul you know these technologies in renewables and battery storage and the like are developing so quickly that they are just better than the systems we had in the 60s, 70s and 80s.

TURTON: Joel how do you feel as the Labor Member for the patch that Liddell is parked on of course and being the spokesperson for energy matters for the Labor Party, what’s your reaction to the Liddell news?

FITZGIBBON: Well I‘m angry. No one would be happier Paul than me if AGL popped up or any company popped up tomorrow and said we are extending the life of our coal fire generators but I just know that they’re not  going to say that. And I’m angry because Malcolm Turnbull is, I think, raising false hopes in my local communities that that might be the case. I mean he is just prepared to say anything Paul to cling to power and of course Barnaby Joyce has also been in a more nuanced way leading people to believe that there is an opportunity to extend coal or indeed to build new coal generators in the Hunter Valley and elsewhere. The problem Paul is that we’ve already had investment drying up because of policy uncertainty and all this talk of government somehow making it easier for coal to stay only provides more uncertainty and therefore is going to further dampen the investment which is bad news for all of us. Now I want the Hunter to remain the powerhouse of NSW, a title it has held for many decades and we can do that. We have the land around the power stations, the transmission lines are right there, the gas is not too far away, we have the skills which are easily transferable from the current industry to new industries and of course its geography is well-placed. So let’s allow the investment to flow into the new opportunities including gas without wasting time pretending that someone is going to pop up and magically build a new coal powered station or extend an existing station and by the way the proposal to extend Liddell would be a little bit more realistic if it were a plant built in the 80s but it’s not, it was built in the 70s, it’s too old, it would take at least half a billion dollars to extend its time and if you extend its time it would be less reliable than it is now.

TURTON: Joel Fitzgibbon you mentioned that the Hunter was the powerhouse of energy in NSW, well clearly as the pendulum swings, the New England area which we are broadcasting into today will become pretty much the renewable capital with major wind projects and indeed solar projects in that area. And the contrast between the two of course is that if you take the Sapphire Wind Farm as an example, a $590million project, will require just 20 or 30 people to maintain it in on an ongoing basis. Does Labor have to be careful about protecting the interests of working people with renewable energy simply employing less.

FITZGIBBON: Absolutely we do and we need to in the first instance make sure people have the skills necessary to take up these new opportunities. That’s why we are so determined to rebuilding our TAFE and vocational education systems making sure that our universities have the courses that match the opportunities in particular regions, these are all important things. But you know, Barnaby Joyce demonises renewable energy on a regular basis but he was happy to go to the opening of that new wind farm and have his photo taken in an attempt to in part take credit for it so he can’t have it both ways. What we need here more than anything is a message to the investors that we have rules around carbon and they will be the rules for many decades to come because there is a bipartisan view about them and then investment can start flowing. Now Malcolm Turnbull could fix this today by adopting all of the Finkel review recommendations in full including the clean energy target. We stand ready to do that with him. If he did that today, the investors would stand up and start investing again.

TURTON: Joel listen Malcolm Turnbull’s defence of Liddell and other fossil fuel powered power stations is supporting workers.

FITZGIBBON: Well he doesn’t have a plan though Paul, he’s got a phone call. A phone call we now know he misrepresented. He said in Parliament yesterday that he was in discussions with AGL about extending the life of the plant, that was wrong. Then about three hours later he said that in fact he was having a discussion about persuading them to sell it to someone else, someone else unknown. So the story didn’t last any more than three or four hours. This is just political spin in an attempt to fix the next Newspoll for Malcolm Turnbull.

TURTON: Alright well what role do the energy suppliers provide in this. We’ve gone through a system of privatisation. It seems to me that AGL is going to have extraordinary power in the lead up to 2022 in terms of what happens to that asset. Do you expect them to be responsible in wielding that power or is it just part of the market at work.

FITZGIBBON: Well I will demand that they are responsible and so should every Member of Parliament including of course the Government regulators. This is a very, very important sector to us all both in industry and in terms of our households and government has a role to play in making sure that those large amounts of market power do the right thing.

TURTON: The Prime Minister is specifically talking about keeping Liddell open for an extended period of time. That’s going to give AGL an extraordinary amount of leverage, surely.

FITZGIBBON: Well, you know, his Energy Minister Josh Frydenberg was on the ABC this morning and he was asked to put meat on the bone, asked to explain what a government would do to extend, the help extend Liddell, what sort of money would it be prepared to offer and he walked completely away from it. He said it’s far too early to be talking about details and money, so I don’t know what we are even debating here other than Malcolm Turnbull’s phone call and his desperate bid to cling to power.

TURTON: How serious is the energy problem going to be as early as this summer? Should we not stockpile in our freezers?

FITZGIBBON: Well I believe it’s going to be problematic and depending on conditions we could be facing substantial blackouts and people will be asking how could this happen? Well it happened because for five years now ever since Tony Abbott starting railing against the architecture which was legislated here in the parliament investment has been drying up. People have not been prepared to invest in large generation capacity because they simply don’t know what the rules in the future are going to be.

TURTON: Joel Fitzgibbon thank you for joining us.

FITZGIBBON: A great pleasure Paul.

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