Transcript: ABC Riverina Breakfast with Anne Delaney
Now, solar does get quite a mention in Rod Sims’ ACCC report with almost 60 recommendations. But what is the Government going to do about these recommendations? Recommendations; there is no obligation to adopt them. But these are very strong recommendations. Rod Sims was very blunt in his assessment of the current energy market, essentially saying that … well, not essentially, he did, he said it’s broken. So, what’s the next step, what happens, what will the Government do to fix it?
Michael McCormack is our local Federal Member and also the Deputy Prime Minister. Mr McCormack, thanks for your time this morning.
Good morning, Anne.
So, you’ve got the recommendations, the public’s aware of the recommendations, everything from addressing standing offers to solar tariffs to make sure that non-solar customers aren’t carrying the weight for solar customers. There’s a whole bunch of discussion about trying to make it more affordable and transparent with energy providers not generating energy at one particular level, then selling it to their own retail arms at an inflated price. So, we know what the recommendations are, what are you going to do?
Well, look, certainly the Government, which commissioned the ACCC to do this report, and Rod Sims has done a fantastic job, him and his very professional team, and look, we’ll certainly be considering them.
And if the Prime Minister’s speech to the Press Club yesterday, here in Brisbane, was any indication – I say here because I’m in Brisbane as well at the moment – any indication, then it’s very, very encouraging.
Certainly the ACCC has provided a case for government support of new large-scale generation projects requiring considerable upfront investment and which also carry significant risk. So, that was the danger that we would perhaps as a nation and as people who are financing investors, who are worried about whether there was any long-term risk, this has been somewhat dissipated by the fact that the ACCC says there is a role for government to play. And we’ll certainly be considering that now.
Now, given this role of government to try and support these newcomers to the market, the report’s also saying that there was a case for government to underpin those long-term contracts, bringing new dispatchable power generation.
Now, that baseload, dispatchable – they’re two really important words, especially when there’s so much focus on renewables. Could we now see support for either baseload coal or baseload gas – or dare I even say the ‘n’ word – nuclear, in order to meet what the ACCC is suggesting we have for affordable, reliable, sustainable power in our nation? Could this open the door for some new nuclear or coal plants?
Well, the short answer is yes. But, again, it has to be considered in the whole context of the suggestions by the ACCC, the recommendations – there’s more than 50 as you said at the top of the show and the fact that there’s 400 pages of the report.
So, it needs to be very, very carefully considered. The Federal Government doesn’t rush in and do anything that is going to distort power prices or distort the market, but certainly there’s great prospects here where private sector banks are unwilling to finance projects due to uncertainty about the future of an industrial or manufacturing business, the ACCC says, in its report, that there’s a role for the Commonwealth to play in providing support for projects in appropriate circumstances.
And as you said, specifically the ACCC said that the government… suggests that we introduce a program under which it will guarantee offtake from a new generation asset or a group of assets in the later years of a project, say, to those difficult six to 10 or six to 15 years is a low fix price, and that’s where the risk is for investors.
But Anne, there’s the possibly now under the Northern Australia Infrastructure Fund for an investor to use that fund to build a coal-fired power station in Northern Queensland. So, there’s the prospect there now but the ACCC report is very much welcome.
The Nationals, I know we’ve been talking about this, we’ve been agitating for this, the Liberals too. We want cheaper energy prices, we want affordable reliable power.
So, looking at that – and I’m just mindful of the time, Mr McCormack, looking at that – the ACCC recommendations are very strong, they do open the door for an increase in, like I said, that baseload dispatchable power generation, baseload coal or gas, and – if we’re ever mature enough to have the discussion – nuclear.
Does this pave the way now for the Government to do something, for instance, like walk away from the Paris Agreement and put the needs and wishes of not just the ACCC now, but the Australian consumers as well? Would this be the next move, does the Government have the political will to do that?
Well, it allows us to do both Anne. And I don’t think there’s any walking away from Paris agreements in as much as we’re meeting our emissions target now. And we can achieve and we are achieving 26 per cent of our emissions targets as per the Paris Agreement. We are reaching those now and we will continue to do that. And we can do that but also provide support that the energy market needs and investors need, as far as confidence is concerned, for investment in more dispatchable power.
Mr Sims was less than flattering about some of the way that the renewables energy market and industry is going, saying that there’s uncertainty, there’s an unwillingness for investment because of, again, this unreliability, this failure to provide dispatchable baseload power.
So, what’s the future there, considering if you went to the Parliament today and said, okay, well, we’re going to have to need to bring more coal online, you’d have a tough time winning the PR battle on that?
Well, I think there’s room for both. And we’re very technology agnostic in the National Energy Guarantee. And Josh Frydenberg will take that to the states next month.
And there’s room for everything, there’s room for renewables. There’s room for solar and room for other renewable energy sources. But we need cheap power, we need it in order to keep our businesses running, our factories churning, we need to keep our household lights on and the air conditioners in winter and summer. Heating in winter, of course. I’ve just heard you talking to and receiving texts from many local Riverina residents. And across regional Australia, we need to make sure that those people who need to stay warm – we all do during winter – can do so but in a reliable affordable way and the NEG guarantees that. I don’t see anything in the report yesterday by the ACCC suggesting that we walk away from any of our agreements.
We can do that, we can play a part of the international stage but at the same time have cheap and reliable power which is what the Federal Liberal and Nationals’ Government is all about.
My last question for you – and in 30 seconds – could this report bring a point of differentiation between the Coalition and Labor at the next election?
Well, there’s a big difference now - and yes it could, in short - but there’s a big difference now.
And Labor just wants to push renewables to 50 per cent, they want to deindustrialise our nation and make our household bills dearer. We are for cheaper, reliable power.
So, you’re going to act on the ACCC’s recommendations?
Absolutely we will.
Alright. Michael McCormack, thanks for your time this morning.