SUBJECTS: South Australia blackout; Energy security; Nuclear power.
Prime Minister, good morning to you.
Good morning, great to be with you.
Mr Turnbull, thanks very much for your time. Now everybody knows that the situation here in South Australia is completely unacceptable. Is there a role for Canberra in finding a solution? And if so, what do you think that solution is?
What we are working with is through the COAG Energy Council and we are getting advice from Alan Finkel, as you know, the Chief Scientist, to see how the national electricity market rules can be changed to improve the situation.
But you know the fundamental problem is that you need more generation in South Australia. You need more reliable back-up generation in South Australia.
Now, what I have set out is a road map to a technology agnostic and ‘all of the above’ approach to energy policy in Australia. We need to have energy, electricity that is affordable, that is reliable – you know what unreliable energy is like in South Australia – and of course we meet our emission reduction obligations.
The extraordinary complacency and reckless negligence of the South Australian Government has seen the introduction of a massive amount of renewable energy into the South Australian grid. Wind energy, that’s fine but the wind doesn’t blow all the time. But what the South Australian Government has done is nothing to provide the back-up power to support South Australians when the wind isn’t blowing and that is the fundamental problem.
So what would those alternative energy sources be? Do you think that South Australia could return to using coal? Because a lot of people would say that the northern power station and that Leigh Creek was actually running out of coal. So should we import coal from elsewhere and set up a new coal-fired power station? Or should we make sure that rather than being the sort of emergency back-up that Pelican Point, the gas station is always operating? Is that something that we should do?
Well certainly gas can provide the back-up because it is very quick to start. The problem with gas is it is expensive. That is the issue, that is why is mostly used for peaking power.
One aspect that has not been done very much, or there is very little of it in Australia is pumped hydro. If you are going to have intermittent renewable energy, variable renewable energy – whether it is sun or wind – obviously it is great when the sun is shining and the wind is blowing, it is not so good when it is not. So how do you store it? Batteries are there. They are a developing technology. But a very, very well established technology is pumped hydro. There is not a lot of it in Australia.
There is a site in South Australia that work has been done on at Cultana, up near Port Augusta and basically it involves pumped hydro schemes - pretty simple. They involve using off-peak power, which might be windmills, turning in the middle of the night or it may be base-load from a coal fired power station in the middle of the night. You use that off-peak power to pump water up the hill from a lower reservoir to a higher reservoir and then when you need it, say on a hot day, it runs down the hill through the turbine at a higher price.
Now this is done in the Snowy. Hydro system is done in Shoalhaven. There is also pumped hydro in Queensland.
But compared to other countries there is very little of it.
Now if the South Australian Government had not been so lazy and complacent, as they rolled out renewable energy, they would have said: ‘Gosh, all this wind energy is fantastic – isn’t it wonderful? Look at those beautiful windmills! But hang on! The wind doesn’t blow all the time. What are we going to do to back it up?’ And what they did in a lazy and complacent was they just assumed they could suck more and more energy from Victoria from those very emissions intensive brown coal generators in the La Trobe Valley.
It’s pie in the sky talking about alternative base load power generation in South Australia at the moment isn’t it? Do you truly believe that the market as currently constructed is the sort of place that is going to attract private investment in coal, hydro or anything else?
Well we are certainly looking at pumped hydro and I have got ARENA and the Clean Energy Finance Corporation looking at that. I think there is some urgent need for more storage in our network in Australia. And you know, we were just talking with the Chief Scientist about it.
But are private entities going to invest of their own volition? Or do state and federal governments need to do more to encourage, specifically, alternatives now to wind power in South Australia?
Well governments need to lead and we are doing that.
But fundamentally the responsibility for keeping the lights on and the air-conditioners on in South Australia is that of the South Australian Government. They have created it – it has taken them a while to create this situation of vulnerability.
See what they have done is in worshipping at their green ideology of renewable energy – and I’ve got no problems with renewable energy I hasten to add – but it has certain characteristics and one of them is that the wind doesn’t blow all the time. But they’re worshipped at the altar of renewable energy and failed to put in place the back-up, whether it is baseload, whether it is gas-peaking plants that are available like Pelican Point, whether it’s more of them or whether it is storage. They have failed to do the work to ensure that South Australians can keep the lights and air-conditioners on.
What’s the sum of the South Australian experience then, in a sort of a practical policy sense?
In your view is there a main merit in the setting of things like aspirational renewable energy targets? Or do we say: ‘We’ve tried that here, we’ve been bold in our ambition on that front, but that concept now doesn’t have merit’?
Well you need to have a plan, you can’t just –
Do you need to have targets?
There’s no point having a target unless you know how you can meet it.
See this is the problem, that you start off with a 40 per cent target and then you say we’re going to go to 50 per cent.
But at no time has the South Australian Government said: ‘This is how we are going to provide energy to South Australians when the wind isn’t blowing or the sun isn’t shining.’ They have not done that. This is a failure of competence.
They have been utterly complacent and negligent and their assumption has been: ‘We’ll just suck more power out of Victoria.’
But of course Victoria’s power is generated in the La Trobe Valley by burning brown coal. It is the most emissions intensive electricity generation in Australia.
So if this whole South Australian experiment, as Jay Weatherill has called it, is an exercise in –you know – green politics or green energy, it’s an absurdity because what they’ve been doing is importing more emissions intensive energy into South Australia, closing a coal-fired power station in South Australia, mothballing gas-fired power stations in South Australia and importing more brown-coal energy from Victoria.
The truth is the Labor Government in South Australia has systematically made South Australia vulnerable and you’re seeing it again and again. So you now have the least reliable energy and the most expensive energy.
Prime Minister when you talk about gas, obviously Australia has pretty vast but largely, as yet, in many cases, untapped reserves of natural gas. Do you need to use your authority as Prime Minister and as the most senior Liberal figure in this country to get some of your state Liberal divisions to get their house in order? We’ve seen the Opposition in Victoria waltzing down the aisle with the Andrews Labor Government in supporting this fracking ban. For very localized political reasons here the South Australian Liberals have embraced a ten-year moratorium on coal-seam gas exploration in the South East. That doesn’t seem to gel with your argument and it certainly doesn’t sit comfortably with Stephen Marshall’s claim that all options are on the table when it comes to energy.
I think in the public debate on energy, there’s been a couple of disconnects. One of the disconnects has been about renewables, where people have assumed –and you’re living with it in South Australia – that you can introduce more and more variable renewables like wind and solar into the grid, and not have to do anything to back them up when they’re not running. So that’s been one failure.
The other failure is the failure to recognize that if you restrict the access to and supply of gas, the price of gas will go up. You are seeing industries in southern Australia, especially in Victoria, that cannot get long-term gas contracts. There’s even been talk in the industry about importing LNG. So there you’ve got Victoria sitting on – in effect – an ocean of gas, both onshore and offshore. The Victorian Labor Government will not allow exploration for even conventional onshore gas.
Your guys are supporting them in that way?
The politics of it is very complicated I grant you that. But I’m just saying to you what we need to have is access to more gas in Australia, we’ve got to make sure landowners get a fairer deal. That’d be one way to approach it. But it is the consequence of restricting access to gas and this is not rocket science, it will become more expensive and less available and that has an impact on the cost of energy and of course energy security as well.
Just finally PM, we had a big debate here in South Australia over the last year and a half about nuclear waste storage. Do you think that the discussion that we are having about power right now should invite a re-examination not of the waste storage argument but nuclear power generation?
Well I’ve always thought that all options should be on the table. The reality however with nuclear power in Australia, and I’m just be thoroughly objective about this, is that it is a very expensive technology, it takes a long time to permit and to build and in terms of even a medium term let alone a near term solution, nuclear power is not going to be the answer.
But, you know, we’ve got some of the biggest uranium reserves in the world. I think the potential for storing nuclear waste in Australia is a very real one and longer term, nuclear power should be on the table.
But it may be that other technologies will overtake it.
But in the near term what South Australia needs is more of its own energy, whether it is energy storage, the kind I’ve talked about or whether it is gas-fired power to be able to provide the security that South Australians need and deserve but they have been let down by a complacent, lazy and negligent government.
They canvassed dramatic action yesterday the State Government including potentially nationalising the grid. What do you make of that concept?
Leaving aside, who knows what they mean by dramatic action. I think –
Well they said nationalising, breaking contracts and stepping away from the Australian market.
Alright so does that mean cutting off the interconnector with Victoria? So South Australia would become blacked out more often than not at that rate. The reality is that South Australia is more dependent on power from Victoria than it ever has been and that is because the South Australian Government has failed to provide the back-up energy – what they called the firming power – to support this massive introduction of renewables.
And I just want to stress, I don’t have a skerrick of ideology about energy. All energy sources have certain characteristics and some are more emissions intensive than others. Some are more variable than others. But if you are going to have a lot of wind power or a lot of solar power in your grid, that’s fine but you’ve got to have a plan and what South Australia has done, what the Labor Government has done is they’ve proceeded without a plan.
Prime Minister Malcolm Turnbull thank you very much for joining us her on 5AA Breakfast.
Thank you PM.