E&OE….
Topics: Renewable energy, renewable storage technologies, Emissions Reduction Fund, Carbon Tax, Australia’s 2030 target
EMMA ALBERICI:
Greg Hunt, good evening.
GREG HUNT:
Pleasure.
EMMA ALBERICI:
Tell me, do you envisage a time when a significant number of Australians will become independent of the electricity grid?
GREG HUNT:
I do, I think it's inevitable.
Already we have about 15 per cent of Australians – the highest level in the world – who have solar power.
Increasingly we will see adoption of storage, which is the key thing that allows people to be off grid.
This is clearly the future. The debate is about how long it takes.
And the task for Government is to help bring that forward.
EMMA ALBERICI:
Investment bank Morgan Stanley recently forecast that 2.4 million homes could use battery storage technology within 10 years.
So if people are increasingly generating and storing their own solar energy, where do coal fired power stations fit into that picture?
GREG HUNT:
Well what we've seen is a reduction of about 17 per cent in coal fired capacity and generation in Australia over the last half decade.
We're seeing an uptake of renewable energy.
We still have a very significant task to double our large-scale renewable energy and probably to double our small-scale renewable energy between now and 2020
EMMA ALBERICI:
But if I can just draw you back to the question around the implications of people storing their own energy needs – what does that mean for the business model of coal fired power stations?
GREG HUNT:
Well that's a matter for them to decide and to determine.
EMMA ALBERICI:
You've been reportedly asking the Clean Energy Finance Corporation and the Renewable Energy Agency to facilitate the widespread deployment of battery storage…
GREG HUNT:
Correct.
EMMA ALBERICI:
…across Australia. In what way can they facilitate that?
GREG HUNT:
What we're doing is bringing together ARENA – the Australian Renewable Energy Agency, the Clean Energy Finance Corporation into an Office of Climate Change and Renewables Innovation – precisely to integrate on encouraging more storage, more off-grid activity, lower emissions and also lower electricity costs – because it means that we don't have to have as much build for our networks if we can smooth out our electricity flow.
EMMA ALBERICI:
So if those two agencies are proving to be so critical in the Government's policy for renewables, why were you trying so desperately to get rid of them?
GREG HUNT:
Look, our long-term position hasn't changed, but we think they can be used quite dramatically more effectively. They were…
EMMA ALBERICI:
So your long-term position – pardon the interruption – is still to try through the Senate to get rid of those two agencies?
GREG HUNT:
Look, the formal policy has not changed, let me be clear about that.
But let me also say I am utterly realistic about the Senate position.
So, they exist, we should be using them. The previous government did not integrate them.
EMMA ALBERICI:
Now the Governor of the Bank of England, Mark Carney, delivered a speech last week warning of the risks to the financial system posed by climate change.
He said to meet the challenge of keeping temperature rises below two degrees above pre-industrial levels, vast reserves of oil, gas and coal will need to remain stranded – that is, unburnable in the ground.
Do you agree with him?
GREG HUNT:
Well the Paris Conference is about each country and the world together finding a way to the two degree task…
EMMA ALBERICI:
Pardon me for interrupting you again, but I just want to draw you to that particular question – do you agree with Mark Carney's thesis that a significant amount of fossil fuel will need to remain in the ground?
GREG HUNT:
Well the answer to that is that there has to be cleaner energy, and there are a variety of ways of doing it.
More renewables, but also more cleanly using the fossil fuels that we have.
And there are many people who think that there will be dramatic breakthroughs that allow those fuels to be used with extremely low, or even approaching zero, emissions as we go forward.
Now, which technology wins I don't know…
EMMA ALBERICI:
Do you think you can burn coal with zero emissions?
GREG HUNT:
Well no I haven't said that.
What I have said is that there are many who are working on dramatically lower footprints for existing resources.
EMMA ALBERICI:
But it's about the mathematics, isn't it? The – sort of – climate mathematics about how you get there.
And scientists say that the two degree goal implies a carbon budget of around 565 gigatonnes of CO2 to 2050.
Without confusing everyone too much, and that also…
GREG HUNT:
565 billion tonnes is the maximum that could be allowed to go out…
EMMA ALBERICI:
Yeah, sure.
GREG HUNT:
…in net terms.
EMMA ALBERICI:
…In net terms by 2050. Now that would also imply, wouldn't it, that around 80 per cent of fossil fuels would have to stay in the ground?
GREG HUNT:
No, that's not correct.
EMMA ALBERICI:
That's certainly what scientists are saying.
GREG HUNT:
If all you did was use those fuels in exactly the same form as is the case now and you didn't draw down additional CO2 that would be correct.
However, there are three things that can occur.
One is you can modulate the level of classical fuels that you use.
Two, you can dramatically reduce the footprint of those individual fuels in the way in which they are used.
And three, there is a massive global reforestation potential, which also plays into it.
So those three things together are the way in which the world can dramatically reduce its footprint.
Profound, real – and we are not just on the cusp of that happening – we're already seeing that transition in place in Australia.
EMMA ALBERICI:
Australia has now an emissions reduction target of between 26 and 28 per cent below 2005 levels by 2030.
Can that be achieved within the Government's current policy settings?
GREG HUNT:
The minus 26-28 is challenging but the combination of I think the world's most effective, the world's best emissions reduction policy – with an Emissions Reductions Fund that's just produced in its first auction alone 47 million tonnes of reduction – the safeguards mechanism, the work that we will be doing on vehicle efficiency, a national energy efficiency program – these things together as well as the storage and technology developments mean that Australia will meet and beat not just our 2020 targets, but in my judgement, our 2030 targets.
EMMA ALBERICI:
Your own assumptions imply that that safeguard mechanism you talked about there will deliver 200 million tonnes of emission reductions between 2020 and 2030.
How will that be achieved?
GREG HUNT:
What that does is it involves an uptake of best practice technology as the standard.
We have – we set that out in 2010.
And everything that we said we would deliver, we've not just done, but we've exceeded.
So we have firstly used an auction – a direct market mechanism, the most pure market mechanism of all – to purchase the lowest-cost emissions reductions.
Secondly, we have the safeguard mechanism which progressively introduces the best practice technology standards across the economy over the period from 2020 to 2030.
EMMA ALBERICI:
And so to stop the planet warming beyond that two degrees, will companies in Australia involved in carbon-intensive industries – will they be subject to tighter regulatory controls – punishments, if you like – for going over a baseline?
GREG HUNT:
Well, the system we've set in place includes a fine of $1.8 million for companies that repeatedly breach their baseline and fail to adapt, or adopt any of the measures to remediate.
So there's a series of graduated approaches, but at the end of the day, there is a fine. We set that out, it was heavier than many people expected.
But let's be clear – we can achieve our emissions reductions. And we are already doing it, without massively driving up electricity prices.
And I think we've put in place a system which we're increasingly seeing is being acknowledged as not just effective, but as outstanding – which the World Bank has now adopted.
You know, the World Bank has adopted a model of a reverse auction which has an incredible similarity to that which has been put in place in Australia.
EMMA ALBERICI:
But in order to meet the target, will our biggest emitters be required to reduce emissions rather than just commit not to increase them?
GREG HUNT:
Well, at the moment what we've set out is a stable baseline. But as new technology comes in, the best practice rules come into play.
So those best practice rules, as I have said repeatedly, will be better and tougher standards.
EMMA ALBERICI:
So they will be required to reduce emissions, not just commit to not increasing them?
GREG HUNT:
Well if they are subject to the best technology – the best practice approach – that means that they're bringing on board new plant and new activities – those new activities are subject.
Beyond that, we're not looking at what the Labor Party's approach is, which is taxing activity…
EMMA ALBERICI:
Oh, I don't want to talk about the Labor Party, sorry Greg Hunt. I'm interested – just so that we can – it is a very complicated area. It is a very complicated area.
GREG HUNT:
No, no I think just this once – just this once I would like to talk about it because there's a very binary choice – an electricity tax or a system which is working.
EMMA ALBERICI:
No, no, I don't think anyone's suggesting it's that simple. Certainly, not me. I…
GREG HUNT:
It is actually that simple. There is a choice between two approaches.
EMMA ALBERICI:
…all I want to know from you is, are you going to ask companies to reduce their emissions, or simply not increase them?
GREG HUNT:
Well, we're not about to make changes which are going to force firms out of business.
We have a renewable energy target that's doing its job, an Emissions Reduction Fund that's doing its job, and we're meeting our targets.
Other countries have talked – we're actually meeting our targets.
And the real point in all of this is that renewables are going up, but electricity prices – under us – reduced by the largest amount on record in Australia. And I think that's a pretty good combination.
EMMA ALBERICI:
Greg Hunt, thank you very much for your time.
GREG HUNT:
Thanks Emma.
(ENDS)