SUBJECTS: Meeting with AGL; Energy policy.
Well, good morning. I want to say a little bit about the meeting with the AGL Managing Director last night, Andy Vesey. It was a constructive meeting.
As you know, the government's concern is that the closure of the Liddell power station in 2022 will, as we have been advised, create a large gap in baseload power in New South Wales, and hence in the whole electricity market, indeed most of Australia.
We can't allow this to happen, we can't allow that gap to occur. We've seen what happened when Hazelwood closed at very short notice, and there was a near doubling in wholesale electricity prices in New South Wales. They rose by over $50 following the closure of Hazelwood.
Now, the only people that benefit from electricity being in short supply are the energy companies because the price goes up. So, my concern, my commitment, is to do everything I can to ensure that Australians have affordable and reliable power.
Now, one obvious solution or option to deal with this is to keep Liddell running for longer and so we've raised that with the AGL CEO some time ago, in fact, more than a month ago. And he stated then that he would be prepared to sell it to a responsible party, because he said his company did not want to operate it past 2022.
We've had a meeting yesterday to continue that discussion, we've obviously had discussions with him since, between that, as well. And what he has agreed to do is to take our proposal to his board that either AGL should continue to run the station for longer, or they should sell it to somebody else who would. And he's agreed to do that. He's also said that he will come back to us in 90 days with his plan to ensure that the gap in baseload power will be filled by alternative means in the event of Liddell closing and we look forward to that as well.
But the important thing here is that we are doing everything we can to ensure that Australians have reliable and affordable power - that's the critical objective. We can't get into the situation where we have done before, where we have large amounts of baseload or dispatchable power going out of the system, and then you get a shortage of power, and then you get a rapid increase in prices.
Now, I'm very disappointed that the Labor Party has decided to take, you know, oppose us on this. I think the approach we are taking is commonsense, it's practical, it's business-like. This is not a question of ideology. The way Labor is going on, it just reminds you of the idiocy that they continually bring to energy policy. They have no - there is no clearly set-out plan to replace Liddell.
Now, you can either take - with Labor, if you're with Bill Shorten, you’re with old Blackout Bill himself, he says that's an issue for down the track. Well I'm sorry, that's how we got into the problem with Hazelwood, with the very late notice of closure.
We know they say they want to close it in 2022 - it's five years away - that is not a very long time in fact in terms of putting in place new infrastructure. So, we need to get the options on the table right now and we need - and the obvious option - the most obvious option is to keep it running. But if AGL want to put up others, we'll obviously consider them, as indeed will the energy market operator and others.
Prime Minister, in a statement from AGL last night, it appeared to favour finding alternative sources. Does it matter to you what they come back with?
Well, it absolutely does matter what they come back with because what we want to be assured of is that any alternative is, is going - and they have not articulated what it is, so we don't know. And, frankly, I don't think they do either by the way, I don't think they do either. If they had a plan, they'd be able to put it on the table now.
But clearly the objective is to get, to ensure, that we have reliable and affordable power. So, the gap that is going to be created by if were Liddell to close, is, we're advised, around a thousand megawatts of power, but that is dispatchable power. It's not like a thousand megawatts capacity from a wind farm that's only there when the wind is blowing. That's a thousand megawatts that is available 24/7, or whenever you want it.
So, it's very important to remember that, you know, when you hear - I heard the Mayor of Muswellbrook talking today about looking forward to baseload renewables. Well, really, if you're talking about wind and solar, they are not baseload. You know, there are not a lot of baseload renewables. Hydro can be one, but we don't have a lot of that in Australia, we're obviously augmenting Snowy. But Snowy 2 will not be available in 2022.
So you know we've got - this is why it takes time and why a competent, business-like, pragmatic government that's concerned to look after Australians in terms of reliable and affordable energy plans ahead and makes sure we get all the options on the table now, and the most obvious one - screamingly obvious, in fact - is to keep it, the station, running for longer.
Prime Minister, won’t AGL have to know what the government's policy is? Can you guarantee in that 90 days the Coalition will have a plan on the Renewable Energy Target and they will know where they can invest with confidence that the sector doesn’t have at the moment?
Well look, AGL has stated that they have got - speaking for themselves, they have said they have no interest in investing in further coal-fired power.
But you've got to remember, AGL is making a fortune out of coal-fired power. I mean if they were to close Liddell, they will still be running Bayswater and other power stations, but Bayswater, which is just next door, for decades to come.
So, you know, you've got to be - you've got to look at this from my point of view as Prime Minister, in a very clear-eyed, hard-headed way. I mean, AGL's management want to look after their shareholders. For them, scarcity of energy is good, because it enables them to raise prices.
It's not good for the Australian people. My duty is to look after the Australian people.
Energy companies want to look after their shareholders. My job is to look after the people with more affordable and reliable power.
Thank you very much.