Interview on ABC Radio Adelaide Breakfast with Matthew Abraham and David Bevan
Topics: South Australia’s energy supply; Turnbull Government’s work to drive energy security, reliability and affordability
Matthew Abraham: Let’s go right now to Simon Birmingham. He’s the Liberal Senator for South Australia, and would normally be joining us on ‘Super Wednesday’, but we’re rebranded it ‘Super Solo Wednesday’. Senator Birmingham, welcome.
Simon Birmingham: Good morning. Good to be with you.
David Bevan: Simon Birmingham, the Prime Minister has been saying and the Deputy Prime Minister has been saying for months, ‘it’s South Australia’s problem, you should fix it’. Well, Jay Weatherill’s finally decided to fix it. He is going it alone. You can’t complain now, surely.
Simon Birmingham: Well, I’m pleased Jay Weatherill acknowledges there was a problem, acknowledges that his policies were flawed. Only last month he was saying his 50 per cent renewable energy target was good for jobs, good for affordability, good for reliability, and yet here he is now saying what we actually need to do is spend hundreds of millions of dollars building a new gas-fired power plant; notwithstanding the fact that under his watch over the last few years, we’ve seen multiple thermal generators, coal plants close, gas plants mothballed, all here in South Australia. Now he wants to spend taxpayer dollars building a new one.
Matthew Abraham: Not just in South Australia. The Hazelwood plant is not in South Australia. It produces a massive amount of base load power, and it’s closing, and it’s a coal plant.
Simon Birmingham: Indeed, Matthew, but Jay has championed and defended his 50 per cent renewable energy target, and of course, now he’s saying clearly that was the wrong thing to do, because what we need is thermal generation. What we need is 100 plus, a multi hundred million dollar taxpayer-funded new gas-fired generator to prop up South Australia’s grid and get stability. So it’s completely contrary to what he was saying a month ago.
Matthew Abraham: [Talks over] What would you propose? What would you propose? What would you propose to keep the lights on, Simon Birmingham?
Simon Birmingham: Well, we do need to make sure that we get the market working effectively. The Turnbull Government’s already investing more than $50 million in projects such as AGL’s virtual power plant, which did help the security and stability; the feasibility study into the pumped hydro storage facility at Cultana, which can help provide stability and storage capacity in the grid. We’ve already taken actions in this space. We’re working through properly the process of the Finkel review so that you don’t destroy the National Energy Market, but you actually make it work more effectively in the future.
And just on that point, you guys rightly called Jay out in terms of South Australia’s role as the lead legislator for the National Energy Market. You know, Tom Koutsantonis just last September said of the NEM that: we have designed it, we have built it, and it worked and served us well. So that wasn’t Pat Conlon a decade ago; that was Tom Koutsantonis six months ago saying the National Energy Market has worked well and taking ownership of having designed it. So there’s a lot of blame-shifting going on from Jay there.
David Bevan: Well, how much ownership do you and the Coalition take for the confusion over power policy over the last five years? I mean, there was a piece on the front page of The Australian – which is hardly a left-wing rag – which said just last week that if only we’d- if all we’d done was stick with Julia Gillard’s carbon tax, it wouldn’t have been- power would not be as expensive as it is now. All of the confusion which is brought- caused an investment strike, to use the Premier’s words, has actually pushed up the cost of power, much more than anything Julia Gillard was promising.
Simon Birmingham: But David, there hasn’t been an investment strike. Billions of dollars have been invested as a result of renewable energy targets. Billions of dollars have been invested while at the same time we’ve seen coal plants closed, gas plants mothballed, and so forth. So this idea from Jay Weatherill that there’s been some sort of investment strike, it does not stand the test of the facts if you look at how much money has been spent and invested in new capacity, but new capacity that doesn’t give us reliability and stability in our grid.
Matthew Abraham: Now, is the Federal Government going to try to block legislation that would give Tom Koutsantonis or an Energy Minister, a State Energy Minister power to override effectively NEM and direct local generators?
Simon Birmingham: Well, let’s look at the detail of what they’re actually proposing there, because you guys tried to challenge Jay on exactly when they would be used, and he couldn’t tell you if it was in an emergency or to prevent an emergency or what would be the trigger point there.
But what I’d invite listeners to think about is obviously if South Australia says ‘well, we’ll just randomly ad hoc step into the market and direct generators whenever we want to’, what’s to stop the Victorian Minister doing the same? And if they do the same when we are still significantly reliant, even with this new gas-fired plant, on a great big extension cord that goes into Victoria called the interconnector, then we could be incredibly exposed. That’s why we need to make the National Market work effectively, and we’ll have a look at exactly what’s proposed. I suspect that what Jay’s saying is a lot of hyperbole, and we’ll find that actually the interventions aren’t too different from the existing powers that the state already had to direct Pelican Point to be switched on in any event.
David Bevan: We can take this up tomorrow with the Federal Energy Minister Josh Frydenberg. Simon Birmingham, Liberal Senator for South Australia and Cabinet minister. Thanks for talking to us.
Simon Birmingham: Thanks so much, guys.
Matthew Abraham: Thank you.