SABRA LANE: The admission will take a lot of attention away from Mr Turnbull's first major speech for the year.
The Prime Minister delivered it yesterday, using the chance to flag a pivot towards coal, as a major part of his government's plans to stablise the nation's electricity grid.
Coal-fired power has long been a battleline in Australia's effort to do its part to lower carbon emissions.
Some have called for a moratorium on new coal mines, others say a move away from the fossil fuel is inevitable but Malcolm Turnbull says Australia has to carefully examine "clean coal".
The Environment and energy minister is Josh Frydenberg. He joined me earlier, from Adelaide.
SABRA LANE: Minister, thanks for talking to AM. Mr Turnbull says energy security will be a key theme for the Government. He's raised a lot of ideas for longer term measures, but what about quick fixes now?
JOSH FRYDENBERG: The Prime Minister has made a very strong statement about what the Government's priorities are when it comes to energy policy. First and foremost, Sabra, it's about energy security and we got a very big wake-up call when SA when into the black late last year, and 1.7 million households lost their power.
We've also got a priority on Energy affordability, and particularly for low income earners because they spend about five times as much of their disposable income on energy than the higher income earners.
Also, it's about helping business, because we've seen higher energy prices put pressure on manufacturers and other major employers around the country - so jobs are very important.
All this is happening while we're transitioning to a lower emissions future
SABRA LANE: The PM made that point yesterday, but what about quick fixes now? Because the problem exists now.
JOSH FRYDENBERG: Well, we're looking at all our options, but certainly the priorities are how do we maintain baseload generation for energy security? And that's where coal continues to play and important role.
How do we get states to lift their moratoriums and bans on convention and unconventional gas extraction? Because if you get more gas into the system, that's going to improve the stability and the affordability of electricity. And also the PM talked about storage, because that's the key to ensuring that intermittent sources of power, namely wind and solar, can provide power through to the system at all times of the day.
SABRA LANE: Power prices for customers have risen 50 per cent over the past five years. People are hurting, the Government is building the expectation now that you will fix power prices this term. If bills continue to rise, do we blame you?
JOSH FRYDENBERG: Well firstly, energy policy is a combination of responsibilities across state and territory boundaries, together with the Federal Government. And so the COAG Energy Council is the primary driver of reform in this area.
But certainly, the Commonwealth is looking to do everything we can to ensure that we keep power prices down, and that's why we're getting more gas into the system, that's why we're encouraging this clean form of technology when it comes to coal is important; as well as encouraging technological developments in storage.
SABRA LANE: The Prime Minister said that $590 million had been spent since 2009 on clean coal, with no working plant in Australia, and he's now talking about the high efficiency, low emissions coal fired power stations. Would the Government like to see the Renewable Energy Agency and the Clean Energy Finance Corporation give these projects millions in taxpayer support to get them off the ground?
JOSH FRYDENBERG: We'll look at all our options, Sabra, but I do point out it's called the 'Clean Energy Finance Corporation' not the 'Renewable Energy Finance Corporation' and that's an important distinction because what we've seen…
SABRA LANE: Sure, but if there's a change, that signals a major shift.
JOSH FRYDENBERG: Well what we've seen throughout our region is the adoption of these High Efficiency, Low Emission power plants, which can reduce the carbon footprint on coal powered generation by up to 40 per cent. Now, if you combine carbon capture and storage, that can reduce the emissions by up to 90 per cent.
Now, there are more than 700 of these plants in our region alone - and take a comparable country like Japan, they have 90 of these High Efficiency, Low Emission power plants. I visited one a couple of years ago in the Yokohama district. They're planning to build another 45 and they also have an emissions reduction target very similar to Australia's, around 26 per cent.
So if you look at other countries in the region, they've adopted this technology to help them meet their Paris commitments, and we should be encouraging - as the world's largest coal exporter, how do we maintain our baseload generation, how to we improve the stability of the system? And coal certainly plays a role in that regard.
SABRA LANE: So is that a yes?
JOSH FRYDENBERG: We're looking at all our options, Sabra. And that was what you'd expect the Australian people to have as an expectation of their parliamentarians, because we need to ensure the stability of the system and the affordability of the system as we transition to a lower emissions future.
SABRA LANE: Why does the Government thing this clean coal technology now is a priority, it only received a passing mention in the chief scientist's preliminary report, late last year.
You yourself said that there was going to be a transition away from coal last July. You said that, but now you say that something different. What's changed?
JOSH FRYDENBERG: No, I'm saying that coal, which provides more than 60 per cent of Australia's energy mix, will continue to play an important role for many years to come.
It's about, as the Prime Minister said yesterday, having all of the above. There's a role, an important role, for renewables and we are seeing an increased uptake of that in the energy system.
There is an important role for gas, increasingly so, and we need to solve the problem there for the moratoriums which are creating tight supply; and there is going to be continue role for coal.
So it's no different to what the Government has said previously about the important role of fossil fuels, of baseload power stabilising the system.
SABRA LANE: You want to do something about the big states that currently don't support coal seam gas.Victoria and New South Wales don't support it in a big way.
How are you going to get them to come around?
JOSH FRYDENBERG: They need to understand that more gas means more jobs, means lower electricity prices and means a more stable system.
I've been very concerned about this situation in a whole number of states, not just Victoria, not just Tasmania but also in New South Wales, where only 8 and a half per cent of our land mass is effectively now available for this unconventional gas extraction.
And in the Northern Territory, they have huge reserves of unconventional gas - in fact enough to power Australia for around 180 years, in terms of our domestic needs.
So we need to get this gas out of the ground, which will be good for consumers.
SABRA LANE: Mr Turnbull tried to use the speech to frame the political year but water cooler talk today will be that he gave $1.75 million of his own money to the Liberal party. Labor says he bought the election.
JOSH FRYDENBERG: Oh... Well, that's a ridiculous statement because the Prime Minister and his wife have been generous over many years, both to the Liberal Party and a range of philanthropic organisations.
He's abided by all the rules and there's been no inference of any influence here. In fact, his donation to himself is the purist donation of them all, because there is no inference of influence.
Now you put that in contrast with Bill Shorten, and it took a Royal Commission to find out that he received a $40,000 donation to his campaign, back in 2007, and of course, the unions are the big backers financially and politically of the Labor Party and we know that that means that the Labor Party in policy terms is beholden to the unions' interests.
SABRA LANE: Minister, thanks for your time this morning.
JOSH FRYDENBERG: Good to be with you.
SABRA LANE: The Environment and energy minister Josh Frydenberg.
High efficiency, low emissions coal power crucial to transition to clean energy: Frydenberg
Sabra Lane reported this story on Thursday, February 2, 2017 08:03:58
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