Interview on ABC Adelaide Drive with Jules Schiller
Topics: National Energy Guarantee

Jules Schiller: Let’s go to the Minister for Education and Training. Josh Frydenberg was unavailable today so Simon Birmingham is joining us. Thank you for joining us Minister.

Simon Birmingham: G’day Jules, great to be with you.

Jules Schiller: Is this an admission that Paris Climate Accord is dead and you’re just focusing on power bills rather than the environment.

Simon Birmingham: No, this is a clear-cut way to meet the emissions reduction targets set in the Paris Agreement. Australia has committed to a target reduction of 26 to 28 per cent by 2030 and part of the Energy Guarantee that the Turnbull Government has committed to today as a result of advice coming from all of the top energy agencies in Australia is an Emissions Guarantee. A commitment that, built into the market rules, will be a target that helps get Australia to that emissions commitment that we’ve made to the world but doing so in a way that is coupled with a Reliability Guarantee which means that we won’t be generating purely intermittent sources of energy – more wind and solar without appropriate backup sources that guarantee when the wind’s not blowing or the sun’s not shining, you still want to have energy there.

So it’s about taking a fully integrated approach rather than all of the other half-baked ideas of the past where instead we will now have something where the energy market responds considering both the reliability objective and need, as well as the emissions objective and need and most importantly this advice says this also happens to be the cheapest way of actually meeting those emissions targets.

Jules Schiller: You’ve put the onus on the retailers though to ensure the power is efficient, really, rather than yourself, so if they use inefficient power what, do you have a penalty system set up?

Simon Birmingham: Well, the advice is very clear from the energy market regulators: you’ll get a far cheaper, better outcome by putting the onus on the energy market to do this rather than setting up a whole new system with a whole new bureaucracy and a trading scheme and certificates and cost and taxes and charges that flow through to consumers rather than just simply saying there are certain expectations and targets that must be met in terms of emissions intensity and energy generation and in terms of the reliability – the level of dispatchable energy that’s available in the system and ensuring that when energy retailers contract with energy generators and wholesalers, that they are meeting those targets which get us to 2030 with the certainty that the lights will stay on.

Jules Schiller: You’ve claimed that you could save between 110 and 115 dollars each year for a decade from 2020, Steven Marshall the Liberal leader here put a figure on what South Australians could save on power that he later had to retract. Is it dangerous to give an exact dollar figure on what we could save on our power bills considering all the fluidity and, you know, all the various variabilities of the power market?

Simon Birmingham: Jules, look, that figure’s not the Turnbull Government’s figure. It’s the advice that the Australian Energy Market Commission has provided in terms of their estimation of what the savings from this model would be. But more important than that, they’ll go on to do more detailed modelling and work around it. But even more important than that, what their clear advice is – compared to doing nothing, business as usual, this will provide cheaper energy in the future. Compared to a Clean Energy Target or any other type of carbon tax or trading scheme, this will provide cheaper energy in the future.

Jules Schiller: We have a question for you from Hugh on 1300 222 891, Minister. Hugh, what did you want to ask Minister Simon Birmingham?

Caller Hugh: Jules, I’d like to ask anybody that you have that comes in to talk about power, why neighbours and individuals can’t share power. I have solar power, my neighbours have solar power, I would like to buy solar power from them when I haven’t got power and I’d like to sell solar power into the network not through my reseller. So I’m with AGL, I don’t want to sell them my solar power, I want to sell it to somebody else.

Jules Schiller: Okay, good Samaritan you want to sell it to your neighbours. I’m not sure if Simon Birmingham is qualified to answer that, it sounds more like a futurist question. Do you have a response to that, Minister?

Simon Birmingham: Well, I think it’s a question probably best answered by the technical regulators and managers of the energy market. I mean, obviously there’s the question of how the market most efficiently operates in terms of energy going in and it being distributed effectively across the country or across the state and then who consumers are actually buying it from.

Jules Schiller: Okay –

Simon Birmingham: [Talks over]…And the point I’d make is, on that technical question, better to get a regulator on to answer it. On a broader point there of the complexities of the market and you asked about prices before, Jules, this isn’t the only action we’re taking around prices. That we have equally brought the retailers to task and are changing the way they engage with the Competition and Consumer Commission and more importantly consumers to make sure that consumers get the best retail deal, we’ve changed the network rules around poles and wires to make sure that the gaming of the system that we’ve seen from some of those energy network distributors and that we have also of course changed some of the gas rules and we’re investing in pumped hydro sources that over the next few years will also contribute to bringing prices down than they would otherwise be.

Jules Schiller Let me ask you, Minister, while I’ve got you. Tony Abbott looms large over energy policy especially when it’s announced by your government. Is it true that he spoke against this policy in the party room today and what influence did he have on it?

Simon Birmingham: Well the party room discussions are discussions between members of the government and I don’t run a commentary or repeat what other colleagues say in there. That’s for Tony to say what he wants to say. But in terms of the government’s approach, we received the report from the Chief Scientist earlier this year, we delivered on 49 out of the 50 recommendations, one of those recommendations was to set up an Energy Security Board – we set that up, it’s got on it members who were welcomed by the Labor Party, welcomed by the states and territories, include all the heads of the different energy market regulators around the country and they had a look at the Clean Energy Target, they’ve come up with this Energy Guarantee which the Chief Scientist this afternoon has said delivers on the objectives that he’s set and which they all believe can be delivered at lower cost than anything else.

Really we’ve gone through the proper process to get what I think is great policy to deliver on our emissions targets but to guarantee reliability of energy production in the future.

Jules Schiller: Alright, Simon Birmingham, Minister for Education and Training, thank you so much for your time.

Simon Birmingham: Thank you, Jules, pleasure.