SUBJECTS: Liddell Power Station, AGL, Bayswater Power Station, Hunter’s energy future
HOST LAURA JAYES: Member for Hunter Joel Fitzgibbon joins me from Sydney. Mr Fitzgibbon, thanks for your time. What do you think of this proposal from Alinta?
JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: Well I’m not sure it is a proposal Laura. I think the Prime Minister picked up the phone to Alinta and said would you be prepared to say publicly that you’re interested in buying this plant? And as any smart CEO would respond, of course Prime Minister - prepared to say that, we would have to say it would be subject to us doing due diligence. I think Bill Shorten is absolutely right. This is a political play by Malcolm Turnbull. He has two audiences. After six years of policy inertia under this Government, we’ve got a broader electorate concern about both prices and reliability and of course there’s the ginger group, the so-called Monash group of MPs who are causing Malcolm Turnbull extraordinary political pain and this is a way of him trying to tidy that up.
JAYES: Just back to this whole pantomime that you have suggested put forward, so you think the Prime Minister got on the phone to Alinta and said, you know can you just pretend like you’re a genuine buyer so we can you know sort this out politically?
FITZGIBBON: I think the Prime Minister was probably on the phone to a few entities trying to persuade them to give some thought to investing in Liddell a power station of course not owned by the Government. Bill Shorten again is right, the Government shouldn’t be interfering in commercial decisions. Malcolm Turnbull for many months has been saying that his so called NEG is both technology neutral and a market based mechanism, while at the same time now, severely intervening in the market, confusing the signals and from my perspective frustrating our opportunity to secure that investment we need in the Upper Hunter so we can remain the power house of NSW.
JAYES: Jeff Dimery would be a pretty weak CEO of Alinta wouldn’t he if just capitulated to Malcolm Turnbull on this and went through this whole rigmarole of doing media interviews saying he was interested when he was just put up to the Prime Minister. I actually find that a little bit hard to believe Mr Fitzgibbon.
FITZGIBBON: Well you know Laura, because I am the Member for Hunter, the Hunter Valley, energy intense as it is, I spend a lot of time looking at these issues and a lot of time talking to industry leaders and experts in the field and I have not spoken to anyone who believes that you can make Liddell a viable commercial proposition beyond 2022 and that is a key point Bill Shorten is making. Surely the Prime Minister isn’t suggesting that the tax payer should be subsiding any such investment.
JAYES: Well Jeff Dimery did say this morning that he is not asking for a taxpayer handout and they have to do a bit of due diligence and if it stacks up they want to buy it. What’s wrong with that?
FITZGIBBON: Well look, as the Member for Hunter Laura, if someone wants to keep Liddell operating for two or three years beyond 2022 that’s fine and I would be happy about that except Malcolm Turnbull is now confusing the market and interfering in the market and my great concern is that the outcome would be the maintenance of some existing jobs for two or three years at the expense of the hundreds of jobs we would secure in the Upper Hunter for 30, 40, 50, 60 years if AGL’s investment plans are forthcoming. What we don’t want now is a short-term political fix crowding out he market and denying AGL the opportunity to progress its plans. And of course then there’s the workforce.
JAYES: But would it really crowd out the market though? Because, okay you say this extends the life for two or three years and you say for you that would be acceptable and would be good for workers in the Hunter. But by giving Liddell that extra life of two or three years and extending it, doesn’t that take the pressure off the energy grid, it creates a smooth transition while other projects like Snowy 2.0 come online?
FITZGIBBON: Well because we have had policy inertia for the last six years time is now of the essence. If we are going to fill that capacity gap, we need to allow AGL and other energy companies who plan renewable companies to get on with their plans. But when you have the Prime Minister of the country running interference and sending mixed signals you risk retarding those plans. That’s the first point. In terms of workforce, Liddell, there will always be exceptions to the rule but Liddell’s workforce falls into two categories: one group of workers which are nearing retirement age who are actually looking forward to the forced redundancies they will receive as a result of Liddell’s closure in 2022. The other group have been guaranteed by AGL a just and fair transition across to Bayswater Power Station which of course AGL is upgrading and making more efficient and therefore lifting the capacity now. So that workforce is quite settled now. Now you have the Prime Minister saying, well, we might force someone to sell Liddell; Liddell will be then owned by a different entity. No forced redundancies. No guarantees of transitions to Bayswater - a transition which would last up to 15 years. But only the promise of keeping their existing jobs – no redundancies in play for two or three years. That is not what the workforce in the Hunter is looking for Laura.
JAYES: Have you spoken to the workforce? When was the last time you spoke to some of these workers?
FITZGIBBON: I have spoken to the workforce in recent times but not since Alinta’s intervention over the last 24 hours or so. But I have spoken to both union leadership and the workforce on the ground there sufficiently regularly enough to know what they are thinking. The workforce knows better than anyone Laura the state of disrepair this power station is in. It only runs at around 50 per cent for most of the time because its infrastructure can’t handle full capacity generation. So that is the state of the generator we are talking about. The workforce understands that better than most, they know there are some safety concerns there as well. No one there believes it can be extended beyond 2022. Remember AGL was the only company ever to give a government five years warning of its intention to withdraw from the market.
JAYES: Ok, the workforce is important, so are power consumers, which is all of us really, unless you live in a tent in the bush and using solar power or you have got a home full of solar panels. But surely, conventional wisdom would tell us if AGL stays open for a little bit longer power prices stay lower don’t they?
FITZGIBBON: No, because it is all about capacity Laura. It is a supply and demand equation. And of course renewables are now increasingly less expensive. So what is the capacity going to be made up of? We know what it will look like with Liddell in the system for the next five years. But if AGL is not allowed a free path to make its investments, starting tomorrow if you like, then there could be a capacity gap. So if there is a capacity gap the blame will lie at the feet of Malcolm Turnbull, who now after six years of policy inertia, is further confusing the investment side. They don’t know what the rules are going to be tomorrow. He needs to get out of the way and let the various energy companies with a real interest and commitment to building these new technologies do their thing. In the Upper Hunter we want reliable and affordable power and jobs; and the transition AGL is talking about will provide all three.
JAYES: Seeing you are so interested about solving this policy inertia and getting some solid policy going forward when it comes to energy – will Labor offer their bipartisan support to the National Energy Guarantee then?
FITZGIBBON: I think thus far, with the limited information the Government has given us, we have provided in principle support to the so-called NEG. Why? Because after six years of uncertainty what the market needs more than ever is certainty. I always say never let the perfect get in the way of the possible. I hope the States can see their way forward to back a market-based mechanism. But Malcolm Turnbull should stop arguing that he supports a market-based mechanism then as Prime Minister start bullying companies and intervening in the market because it is only confusing the market and it is going to make things worse.
JAYES: Just finally, when it comes to AGL, it seems their reluctance to sell the aging Liddell plant after 2022, does Andy Vesey have a profit motive in shutting it down rather than selling it?
FITZGIBBON: This is the typical right-wing conspiracy defence. No. AGL has plans to use their assets there as part of the development of their new technologies: pumped hydro; large scale solar; battery storage. They have a fantastic asset sitting there right on the electricity grid of course with Bayswater coal-fired station right across the road. They are perfectly placed and why would you allow a competitor to get their hands on those assets? That is just a normal, sane business decision.
JAYES: There is just one final question, it is a bit out of your jurisdiction, but Hazelwood 2.0 – it has been an idea that has been put forward by the Monash Forum. Is it a good idea?
FITZGIBBON: Well I enjoyed Paul Kelly’s piece in The Australian today Laura. Paul has never been accused of being left of centre. I think he summarised that very, very well. This Monash group thing is not about energy, if it was they wouldn’t be going down this path. It is all about leadership in the Coalition.
JAYES: Joel Fitzgibbon thanks for your time today.
FITZGIBBON: Thanks Laura.