RN BREAKFAST: 22/01/19

January 22, 2019


FRAN KELLY: Australia’s hydrogen sector will receive a major boost in this country if Labor wins the next federal election. Bill Shorten today will announce a $1 billion National Hydrogen Plan to - in his words - supercharge Australia’s renewable energy industry. Political support for the clean energy source, which has close to zero emissions, comes as British naturalist Sir David Attenborough warns that world leaders have a decade to solve climate change or the planet is doomed. Mark Butler is the Shadow Minister for Climate Change and Energy; he joins us from Adelaide this morning. Mark Butler, welcome back to breakfast.  

MARK BUTLER: Thank you Fran.

KELLY: Hydrogen it is not often spoken about as an industry, and we are talking clean energy. What is the basis of a hydrogen energy sector, how does it work?

BUTLER: It has been long talked about actually by scientists and industry as a potential clean energy source but there have been some real barriers. Firstly, how do you make it affordably and cleanly? Secondly, how do you transport it? Really over the last few years there have been some great innovations in dealing with both of those long standing barriers.

The first is to be able to make it using renewable energy to electrolyse water by separating hydrogen from oxygen. This opens great opportunities for Australia given that we will have the lowest cost renewable energy of all our competitor nations. Secondly, again those incredibly clever men and women from CSIRO have developed a membrane that means we can now store hydrogen and liquid ammonia, ship it off to export destinations like Japan, Korea, China, Germany, all of those nations that are now talking to Australia about this, and have this membrane that CSIRO have developed extract the hydrogen from the liquid ammonia at the source, at the point of use. Dealing with that barrier that people really for many decades thought was going to be insurmountable.

There is a great opportunity here. The International Energy Agency says that this industry will be worth, within three years, more than $200 billion globally and around the world Australia is recognised as a potential leader in capturing those opportunities.       

KELLY: So pardon my ignorance, this is a hydrogen gas industry and the countries we are talking about - do they have industries ready and prepared and able to use it?

BUTLER:  They do. Japan, a bit like the LNG industry in the 1970’s is really leading the drive in this industry globally, but Germany, China, Korea and many others as well are exploring opportunities across industries. In manufacturing, for hydrogen to replace for example, coal in steelmaking and many other manufacturing technologies. Particularly in transport, the Asian car makers are heavily investing in hydrogen as a potential alternative in the car industry to battery electric vehicles, but particularly in heavy vehicles so trucks, buses and trains that will be very difficult to power with battery electric vehicles hydrogen is seen as a great opportunity.

There is big demand for hydrogen to be able to be sourced from a country like Australia, into those nations. Japan again leading, they’ve said the Olympic Games next year in Tokyo will be the hydrogen Olympics, but they need hydrogen from another country and Australia has extraordinary opportunities to capture this, we just need a Government that will put some money behind those opportunities.   

KELLY: The Chief Scientist, Alan Finkel, he has been onto this. He has said in the past hydrogen’s time has come as an energy source but that notion of it being traditionally produced from water using coal or methane, you’re talking about renewable sources. Is that happening? Is that already being produced by renewable sources elsewhere?

BUTLER: It is and the cost of electrolyses, so the machines that use the electricity to separate hydrogen from oxygen, are coming down very fast. The CSIRO, which has done probably the most detailed work on hydrogen in Australia, says that by 2025 at the latest that technology will be very cost competitive. So again, around the world using renewable energy to power this in a clean way is seen as the future, the way of the future. This really dovetails very neatly into Labor’s focus on making Australia a renewable energy powerhouse for the future because, for example, Japan, which is leading this, has said by 2030 any hydrogen sourced from around the world must be zero emissions. 

KELLY: So Labor’s pledge today will be $1 billion that would come, I understand, from the Clean Energy Finance Corporation or the so-called ‘green bank’. Is this a future Labor Government directing the CEFC to back hydrogen?

BUTLER: That’s right, the CEFC has already indicated a very high level of interest in hydrogen but this will put some real grunt behind that level of interest.

KELLY: Can I just interrupt you; is there a problem with a Government directing the CEFC where to invest?

BUTLER: No, the Government is able to give some investment direction to the CEFC. Obviously they will choose the projects, they will make sure that the appropriate risks, the appropriate opportunities are analysed and determined by the CEFC as deserving of support. But as a matter of policy the Government is able to direct the CEFC to explore these opportunities in a particular industry. This is a part of the additional $10 billion that Bill Shorten and I announced for the Clean Energy Finance Corporation just before Christmas – so building on our very detailed, fully costed, energy plan. 

KELLY: You’re listening to RN Breakfast; our guest is the Shadow Climate and Energy Minister, Mark Butler. Mark Butler, Tanya Constable who is the Chief Executive of the Minerals Council of Australia is today proposing in papers that nuclear energy be allowed to be developed as a zero emissions fuel. She says Australia will only be catching up with the rest of the world, there are new technologies in this area ready to be deployable, they produce zero emissions and thirty other countries around the world use them. Is Labor prepared to exercise or even consider that option?

BUTLER: No, this is not a technology that has any opportunity for Australia. There are legal barriers to it, which we reindorsed at our National Conference just before Christmas as Labor Party policy. Where nuclear power is being explored, new nuclear power plants around the developed world in particular, for example the UK, it is extraordinarily expensive power as well. Rather than focus on these sorts of technologies that really are of no practical use to Australia, we want to focus on renewable energy which is going to bring down emissions, bring down power prices, and power thousands and thousands of jobs.  

KELLY: More broadly, Sir David Attenborough has just addressed the World Economic Forum in Davos just within the last few hours. Let’s have a listen:

SIR DAVID ATTENBOROUGH (RECORDING): The Holocene has ended. The Garden of Eden is no more. The only conditions modern humans have ever known so far, are changing, and changing fast.

KELLY: David Attenborough warning the Garden of Eden is no more. He went onto say that the planet has only a matter of years to tackle climate change before the damage is irreparable. Now that’s a view shared by many, but not all. Where do you think global attitudes are at here and overseas in terms of the timeline for zero emissions? And are contributions from someone like David Attenborough making any difference?   

BUTLER: David Attenborough gave a very, very powerful speech to the Conference of the Parties at the Climate Change Conference in December as well, where he largely said what he just said in your piece now.

I think also at Davos, this big collection of very big wealthy business leaders that happens from time to time, there was a survey of those business leaders published over the last 48 hours that said that those business leaders regard climate change as the most significant risk and challenge for the global financial system that exists. So I think if you are asking about global attitudes there is increasing recognition of the need to come to grips with climate change and bring down emission to zero emissions in the next couple of decades as a matter of necessity. 

Unfortunately, that is not yet something that has taken the current Government, under Tony Abbott, Malcolm Turnbull, and Scott Morrison. We’ve had glib clichés rather than real action on climate change. That is out of touch with what the rest of the world is doing.

KELLY: The Government has said its priorities, and its priorities are to bring down power prices and make sure we have a reliable, sustainable, baseload generation. Power operators have until tomorrow to propose what the Government has describes as, “fair dinkum baseload generation projects,” which the Government may consider underwriting. Businessman Trevor St Baker has come up with a $6 billion plan; apparently, backed by Chinese interests to develop Australia’s first HELE that is High-Efficiency Low-Emissions coal plants in Victoria and New South Wales. Would these HELE plants be worth backing in your view?

BUTLER: No, they wouldn’t. They would provide very expensive power to the system. They would provide relatively high levels of pollution, particularly if it is using brown coal from Victoria. It would be completely inconsistent with our climate change commitments and it would require billions and billions of support from taxpayers.

The Australian Industry Group, for example, estimated that the cost of indemnifying just one new coal-fired power plant against carbon risk, which is what the Government is currently looking at doing, the cost of just one would run to almost $7 billion. This is an extraordinarily irresponsible, ideological, foray from the Government instead of looking at renewable energy which is going to bring down pollution, create thousands of jobs, and bring down power prices.  

KELLY: Well it hasn’t happened yet and as I say it is a proposal being brought forward by a businessman Trevor St Baker, but we are five months out from an election. If contracts are entered into before an election, and if Labor should win the election, would Labor honour those contracts?

BUTLER: Labor has a long standing position, as any responsible party of Government should have, to respect any contracts that are in place at the time of taking Government. But it is hard to see how a Government could responsibly enter into contracts over such a short period of time involving such an extraordinary use of taxpayers’ money. Our position on this is pretty clear; I’ve indicated this over a matter of months. I can’t see how the Government could possibly propose to finalise contracts on this matter when there is a questionable legislative basis – just to take one point – a questionable legislative basis for those contracts and instead start to put the brakes on this and get a focus back on the real potential in the future, and that is renewable energy.

KELLY: Mark Butler, thank you very much for joining us.

BUTLER: Thanks Fran.