SKY NEWS: 22/05/20

May 22, 2020

FRIDAY, 22 MAY 2020

TOM CONNELL: The Government released a discussion paper on its technology roadmap to reduce emissions. To get response on that I’m joined now by the Shadow Climate Change and Energy Minister Mark Butler. Mark, thanks very much for your time. Some interesting things here, presumably Labor doesn’t have an issue with, renewable energy is the cheapest form of power going forward albeit it does need to be firmed up. It doesn’t look like there is much of a future for new coal-fired power stations either. How do you feel about the direction being issued here?
MARK BUTLER: Well the roadmap, as a draft, is as good as far as it goes I guess. There is no shortage of reports lining the bookcases of Government Ministers and Shadow Ministers all through Australia talking about what is happening in the electricity sector with new technology and they all come to the same conclusion, which is renewable energy is not just the cheapest but also the cleanest way to renew an ageing and increasingly unreliable electricity system. Of course it has to be firmed up, which is why there is such interest in storage technology like batteries and pumped hydro and the like. We will have to have, for some time at least, some gas peaking plants as well.
There is nothing strikingly new about the draft discussion paper. But what we need to reaffirm is that a technology roadmap, whether it is draft or final, to all of the other reports that have come broadly to the same conclusion – it doesn’t mean anything if you don’t have an investment framework, like the National Energy Guarantee was intended to be. Something that gives investors the confidence to put their money on the table and actually make this roadmap a reality. We saw already last year, before the bushfires, before the COVID-19 pandemic, renewable energy investment was down - according to the Reserve Bank by 50 per cent last year. In a large part because of a lack of an energy policy. I want to be positive. I want to be constructive. It is good as far as it goes but there is no shortage of reports that essentially come to the same conclusion.
The other thing about this roadmap, I’ll just quickly say Tom, is that there are still some of the hoary old chestnuts the Coalition continues to insist upon hanging onto: nuclear power for Australia. A monumentally expensive technology. Not something we have an industry to support here, so it would take a couple of decades to build. Coal-fired power is not ruled out so the idea of building a new coal-fired power station with taxpayers money is apparently still on the books unless they rule it out. There are some hoary old chestnuts but maybe there is something to work with if the Prime Minister comes back to a more centrist position instead of this being dictated by the extremists in his party room.   

CONNELL: There has been a big focus on gas from the Government. You spoke about that as a transition fuel, the big question is for how long now? It has been spoken about for a lot of years, do you think the amount of time gas can be that transitional fuel is limited given this is a fossil fuel and unless we are talking about cheap sequestration or CCS of some sort it doesn’t necessarily mean a low-emissions future if there is a lot of gas?     
BUTLER: Obviously we want to take account of two things, we want the cheapest and most reliable energy system. Whether gas can beat pumped hydro and batteries is ultimately a matter for the market. What we are seeing even from the Market Operator is they have recently rebased or recalculated all of their cost estimates for batteries and pumped hydro. Batteries have come down very substantially because of the technology advances we are seeing around the world. Gas, by contrast, has become more expensive over the course of the last few years because of the tripling of gas prices that followed the opening of the export operations, the LNG export operations in Gladstone. The market is going to determine this to some degree. But we also have got to take account of the greenhouse gas emissions from gas. You are seeing investors, regulators around the world including here in Australia, saying that investment, economic stimulus that is needed to bring us out of the COVID pandemic and bring us out of the economic recession that is flowing from it, needs to take account of these carbon issues. We saw a coalition earlier this week of the major banks here in Australia, the insurers, the super funds, the big investors that are ultimately going to have to bankroll this renewal all saying you shouldn’t be investing in old  technology, you should be investing in new technology that takes account of the need to get to net zero emissions by the middle of the century.
CONNEL: There might be, though, less need for that dependent on Government subsidies. Are you concerned about this leaked report from the COVID-19 Coordination Commission, plenty of representatives from the gas industry on this, that encourage major underwriting of gas projects and also lifting moratoria in the eastern states. Does that indicate to you that this might be seeking to lock in gas for many years to come in Australia. Does that concern you?  
BUTLER: You’re right - it is a very gas heavy commission and it does seem to focus very, very heavily on gas as an option rather than the range of other technologies – particularly the cleaner technologies and emerging storage technologies. I’m reluctant to place too much emphasis on leaked reports that haven’t yet been received by the Government, but I think there are some real questions for the Government to answer about this report if they are intending to follow it. For example, this pipeline idea across the continent that was the subject of a feasibility study delivered to Josh Frydenberg when he was the Energy Minister only a couple of years ago – it said that it doesn’t stack up. There is no cheap gas in the eastern gas market if you ask any of the gas companies. The cheap gas that we used to rely upon has largely been depleted, in the Bass Strait fields, in the Cooper Basin and such like. So I’m not quite sure where they get the cheap gas from. We still have the problem of so much of our gas going overseas to markets instead of being available at an affordable price for businesses and households here. I’m not going to place too much emphasis on a leaked report that hasn’t yet been received, but it does seem a little bit singular in its focus on gas rather than a range of different technologies that don’t seem to have been considered by this group.              
CONNELL: What about the big focus from the Government on carbon capture and storage, including allowing ARENA and the CEFC to make investments here or give out loans? Is that fair enough, is that a good approach?

BUTLER: I’m not sure if they’ve actually indicated if they do want ARENA or the CEFC to work in CCS because the legislation excludes that. What we did 10 or 12 years ago, when we were in Government, was to build on some CCS funding that John Howard had set up when he was in Government. Kevin Rudd expanded that very substantially, a CCS fund from Government to support these technologies because we had heard the advice of the Chief Scientist most recently here in Australia but also the International Energy Agency and others who have said CCS needs to be on the table as part of a suite of options to deal with climate change. That fund was abolished by Tony Abbott, it was abolished in his first budget and it hasn’t been fulfilled or replaced since from this Government. In the past we haven’t supported the idea that the Government would now raid clean energy funding, funding set up for renewable energy, storage and those sorts of things because they went and abolished funding that John Howard and Kevin Rudd set up for carbon capture and storage. We think there is some interest, apparently, to see if this technology can work in gas fields. Not for electricity generation, where I don’t think that is going to work economically, it is not going to stack up. If industry wants to fund that sort of technology they have to show that it can stack up, to the experts and the expert panel will consider that. Let’s see how that goes. I don’t think we would support clean energy finance bodies being raided to essentially fund this fossil fuel technology.
CONNELL: Just finally the Government has indicated it wouldn’t go ahead with vehicle emissions standards, the tightening of them despite their delve into electric vehicles. Where does Labor stand on vehicle emissions?   
BUTLER: We have been for some time the only developed country that doesn’t have vehicle emissions standards, fuel efficiency standards, that not only obviously cut pollution in particularly our major cities quite substantially, but according to modelling that was done for Malcolm Turnbull and Josh Frydenberg, when they were in their previous positions, would save motorists $500 a year. Because if you have more efficient cars you are paying less at the bowser. You need less petrol.
CONNELL: So you would bring in those standards?
BUTLER: That’s been our position for the last couple of elections. Obviously, all our policies are up for review.
CONNELL: But you imagine that would be your view?
BUTLER: Why are we the only developed country when the car industry across the world is now building models according to fuel efficiency standards that now operate in 80 per cent of the global car market, but not Australia. All that means is that dirtier, less efficient cars are being dumped on the Australian car market. Not only are our cities more polluted because of that, but motorists are paying more at the bowser.
CONNELL: Mark Butler appreciate your time today, thank you.
BUTLER: Thanks Tom.