SUBJECT/S: Energy crisis
TUESDAY 12 SEPTEMBER 2017
EMMA ALBERICI: It's been a day of heated exchanges over energy policy in Canberra. First, a clash in the corridors of Parliament House between Energy Minister Josh Frydenberg and Labor frontbencher Joel Fitzgibbon. It was over the future of the Liddell power station and that meeting yesterday between the Government and the chief of AGL...
[GRAB] FRYDENBERG: Joel, we met with Andy yesterday...
FRYDENBERG: You're now defending the big energy companies, are you, who are making big profits, who are seeing family highs...
FITZGIBBON: High prices you created.
ALBERICI: Joel Fitzgibbon then faced a concerted attack by Coalition MPs during Question Time...
[GRAB] JOYCE: So the member for Hunter - which one is it? Is it your energetic support to keep coal-fired power plants humming, or is it supporting your Leader of the Opposition and motions in the Senate to close down our coal-fired power stations? You can't have it both ways. It is extraordinary to see - whether it's the member for Hunter, or the member for Shortland, who represent all of these workers in the power industry, all of these workers in the coal mining industry, becoming these extraordinary apologists for AGL. The member for Hunter - he's a knight in Newcastle, but he's a coward in Canberra!
ALBERICI: Opposition frontbencher Joel Fitzgibbon is the member for Hunter, home to AGL's Liddell coal-fired power station. He's also the Shadow Minister for Agriculture, and joins us now from Canberra. Welcome.
FITZGIBBON: Good to be with you, Emma.
ALBERICI: The Energy Minister, Josh Frydenberg, says there's really no alternative but to keep Liddell operating for another five years past 2022. What's your view on that?
FITZGIBBON: First of all, let's put it into some perspective, Emma. We've had now four years of rising prices. Four years with an investment drought in the sector. And this summer, not too far away, we're facing blackouts. Malcolm Turnbull now has a plan to do something about it in five years' time. So even if he was able to achieve the extension of Liddell, it's not going to help people this summer, and it's certainly not going to help power prices over the next five years. Indeed, the whole Liddell proposal is predicated on ongoing high energy prices in the out years. It's the only way it could possibly work. All the experts tell me that it's just simply not possible physically for that machine that is Liddell to operate until it's 55 years of age, and it's certainly not economically viable.
ALBERICI: Liddell supplies 10 per cent of the power for New South Wales. What would Labor replace it with?
FITZGIBBON: We’ve said that - I mean, Andy Vesey and AGL did us all a big favour. They did what no-one else has ever done before. They gave us seven years' notice that this power plant will close in 2022.
ALBERICI: OK, so what was Labor's plan to replace it?
FITZGIBBON: In the meantime, we've been working on the just transition for the workforce and designing, developing, a new clean energy hub for the Upper Hunter, replacing Liddell. What you would have is Bayswater coal-power station, supported by new gas generators, new large-scale sole, new pumped hydro, new battery storage. Utilising...
ALBERICI: Sorry for the interruption. Has that been the basis for conversations you've had with Andy Vesey and AGL?
FITZGIBBON: I haven't had them directly with Andy Vesey, but if you check my record, you'll see I've been saying this for a number of years.
ALBERICI: So you haven't had a conversation with the head of AGL?
FITZGIBBON: No - I had a very quick conversation with Andy Vesey yesterday, but I've had detailed discussions with the people who work underneath him, and the people who are working on these plans. He's got $2 billion to invest. And my job is to make sure that the lion's share of that investment comes to the Upper Hunter, replacing existing infrastructure and making sure that the Upper Hunter remains the powerhouse of New South Wales, we continue to create jobs, and we have a system in place that won't feed the grid for the next 5 years, but for the next 50 years, in a cleaner way.
ALBERICI: Has AGL given you an undertaking that those 200 workers currently at Liddell would be gainfully employed in any alternative energy generation that would replace Liddell?
FITZGIBBON: They have given me some detail of those plans, and they do have runs on the board - you know when they closed Hazelwood, they did set up a compensation scheme to make sure all those retrenched employees were adequately taken care of, found work for others where that was possible, and they tell me that's what they intend to do in the Upper Hunter. But if we can help them get this new energy hub in place, all that will be much easier. They've said that, as older people retire from Bayswater - which is the generator straight across the road - they will start transitioning people from Liddell to Bayswater. We've got a 2-tracked approach to that. The best way of retaining jobs, and growing more jobs in the Hunter, is to embrace this new energy hub, not pretend that we're going to extend jobs for five years - something which I think is fanciful in any case. No one would be happier than me, Emma, if we could extend Liddell. The reality is, it's a 1970s generator, it's clapped out, and it will certainly be time to go in 2020, and it certainly can't last five years beyond that.
ALBERICI: What do you make of Barnaby Joyce's claim that AGL is "shorting" the energy market, or Craig Kelly accusing AGL of acting in an anti-competitive manner and threatening to bring in the ACCC?
FITZGIBBON: This is their fifth year in government, and they want to blame the Labor Party for high power prices. It's just ridiculous. Barnaby Joyce's antics today reminded me of his Hansard doctoring. He changes his story. He says one thing in the party room, and on television today refused to back up his claims. I've never seen a right-of-centre government so anti-business and so interventionist in the market. They've become the socialist party, Malcolm Turnbull and his followers. We know what it's about - it's all about Malcolm Turnbull desperately clinging to power.
ALBERICI: The Deputy Prime Minister reckons AGL hasn't provided a reasonable answer to the question of why it would decommission the Liddell plant if a rival generation company wants to buy it. Indeed, he says he knows of two potential buyers who are very serious about it.
FITZGIBBON: Barnaby Joyce says a lot of things, Emma. None of these potential buyers have shown their hand. Again, this could only ever happen if two things are in play. First - the Government's willing to substantially subsidise the purchase - in other words, pay someone to take it - and of course they're relying on energy prices to continue to stay very high, the very thing we are trying to avoid.
ALBERICI: Tony Abbott today said it was inevitable that the government would have to fund new coal-fired power stations because Snowy Hydro 2.0 will "scarcely replace Hazelwood".
FITZGIBBON: Like Malcolm Turnbull, Tony's always looking in the rear-vision mirror.
ALBERICI: He's got a point, though - nobody really knows what's going to replace coal in terms of dispatchable, reliable, affordable power.
FITZGIBBON: Well, let's be very honest about it, Emma. We've had, now, four years of policy vacuum. Over that time, people haven't been investing...
ALBERICI: OK, you've just said you don't want to look in the rear-view mirror - going forward, what's it about to be?
FITZGIBBON: I'm about to concede, it's going to be very hard to restore that capacity in quick time, with given now we've just lost four or five years of investment certainty. We find ourselves in a very, very difficult position now, and Malcolm Turnbull cannot just simply produce an answer, and that's why he's trying to pretend he has an answer in Liddell. But of course, that in itself is five years away. Snowy Hydro 2.0, as he calls it, is at least seven years away, and possibly more. Malcolm Turnbull doesn't have any answer. Prices will continue to rise under him, and blackouts - unfortunately - are imminent.
ALBERICI: I need a very quick answer to this one. Coal currently provides more than 70 per cent of Australia's power needs. Under Labor, where do you see that being phased out to, and over what time frame?
FITZGIBBON: First of all, let me take a check on Josh Frydenberg on his numbers on coal. In the Hunter Valley, about 94 per cent of our coal is exported. So making this link between the coal industry and the power industry is, again, a misleading thing to do. But of course, it's going to be hard now to build the capacity that AEMO has identified, because we just lost 4-5 years, Emma. This is the problem. Since the day Tony Abbott promised to unravel the carbon architecture we have in place, investors stopped investing in generation in this country. Four or five years on, we have a very big problem that simply can't be fixed overnight. Malcolm Turnbull knows that. That's why he's trying to pretend he has a solution, but it's no solution at all. My real concern is that we're trying to move towards this new clean energy hub in the Upper Hunter, and every day Malcolm Turnbull talks about extending Liddell is a day when these investments potentially become deferred. If Malcolm Turnbull...
ALBERICI: Joel Fitzgibbon, I'm so sorry. I need to cut you off there - sorry! We have completely run out of time. Thank you for your time.
FITZGIBBON: A great pleasure, Emma.