‘The sun doesn’t send a bill,’ says Chris Bowen, but will there be blackouts this summer?

Chris Bowen is the federal minister for energy and climate change. I spoke to him this week.

Fitz: Minister, thank you for your time. What I’m looking for is a chat with a minimum of jargon and as simple an explanation as possible of your plans before we get to why the vast reduction in wholesale electricity prices has not been passed onto the consumer – and where we’re up to on your government’s promise of a $275 annual reduction of our power bills?

CB: Go on.

Chris Bowen: “The sun doesn’t send a bill. The wind doesn’t send a bill.”Credit:

Fitz: So, in simple words, what is the energy system you inherited when you took over as minister for energy and climate change at the beginning of the Albanese government’s term?

CB: It was a pretty big mess. There had been multiple attempts over a decade to rewrite energy policy, and there’d been 22 goes at it, but none of them had really stuck. And as a result – with so many coal stations coming off the grid and not being replaced – we had four times more dispatchable electricity generation depart from the grid than came on. We had no policy certainty to unlock new investment in the generation we desperately needed. That left us exposed to shocks, whether it be a domestic shock – like a coal outage, a hot summer or a very cold winter – or an international shock – like the invasion of Ukraine. It had to be fixed.

Fitz: And the plan you’ve pursued?

CB: To get policy certainty to encourage the investment community to support zero emissions, [to get] reliable renewable energy, [to have] one policy in place, and get a lot more dispatchable renewables in – and that’s exactly what we’re doing. And that system is now working. Yes, we’ve got people saying, “Oh, the transition is nonsense, it’s not happening.” Well, it’s actually happening as we speak. We’ve got big batteries being built right across the country, including six more I’ve just announced. Batteries and dispatchable power are the key. We know how to build renewables. Renewables were 30 per cent of the national grid when we came to office, and they’re 40 per cent today. So we’re getting on with the job, and we’re on the way to our target of 82 per cent by 2030.

Bowen with Twiggy Forrest at a sod-turning ceremony marking the start of construction of a wind farm near Dubbo in January.

Fitz: And if it goes as you plan, where will the final 18 per cent come from?

CB: So our proposal is renewables, supported by big batteries, pumped hydrogen and transmission with gas “peaking and firming” – which means you turn it on or off as required. You obviously can’t do that with coal.

Fitz: But if that is the case, and you are doing well, why is it that the Australian Energy Market Operator [which manages the national electricity market] has warned of the possibility of blackouts this summer?

CB: Well, they haven’t actually said that. The AEMO has issued what they call the “statement of electricity opportunities”. I know we’re staying away from jargon, but that’s what it’s called. They’ve done that for years, at least since 2017, warning of what’s technically a breach of the reliability standard – what you would describe as the risk of a blackout – and the latest one has the reliability gap smaller and further away than ever before. So, in some sense, this is the best statement of opportunities we’ve ever had. It’s called a statement of opportunities because it’s sending a signal to investors: here’s an opportunity to deliver more power into the grid. The AEMO is not predicting blackouts, they are saying what they would like is some more people to come on and just provide some extra stability. And that’s how the process is meant to work.

Minister for Climate Change and Energy Chris Bowen at the Australian Clean Energy Summit in July.Credit: AAP

Fitz: So you’re not worried?

CB: I’m confident that our reliable renewables are securing the grid. AEMO is doing its job by talking to big energy users and saying, “Are you available to be flexible?” They’re talking to energy providers and saying “What’s your situation this summer, and can you provide more energy?” They’re managing it, by putting out what this summer looks like, giving them notice in order to manage the system. Remember, Peter, everyone was predicting blackouts last summer. The opposition was running around calling me “Blackout Bowen”, saying there would be blackouts last summer, and there were none – at least not blackouts caused by energy generation. Transmission towers being knocked over by storms is a different matter. There was plenty of energy in the grid all through summer despite all the warnings.

Fitz: And yet, your shadow minister, Ted O’Brien, put out a statement saying, and I quote: “To meet Labor’s goal, nearly seven gigawatts of new renewable generation must be installed every year to 2030. In stark contrast, last year, only 1.3 gigawatts achieved financial closure. The gap between promise and performance is widening, yet Labor continues to claim the transition is on track.”

CB: Yep. That’s a lot of gall from a guy who was a member of a government which saw four gigawatts leave and one gigawatt come on in a decade. But basically, yes, we do need to see more investment. And he’s trying to chill investment. I’m trying to encourage investment. He and his party have explicitly called for a pause in renewables for the coal-fired power stations to be kept open longer. That’s a recipe for disaster – it’s very bad for emissions but also reliability. Our coal-fired power stations are getting older, and we’re meant to believe they’ll get more reliable as they get older? Well, that just defies all logic. There hasn’t been a day in the last 12 months when we haven’t had an unexpected outage from a coal-fired power station, a breakdown. We must move on from them. And if they want to keep them open for longer, that is a recipe for blackouts.

Opposition energy spokesman Ted O’Brien.Credit: Alex Ellinghausen

Fitz: And yet, I know Ted O’Brien to be an intelligent man. How have he and the Libs and Nats come to such radically different conclusions than you as to what is needed for our energy system?

CB: It’s not based on evidence. I think it’s a culture war. You know, you can put up all the facts about nuclear: about how expensive it is, about how it takes 20 years to roll out, and they still say how wonderful nuclear is. Even if it is as wonderful as they say it is – and it’s not – it’s 20 years away! Now, how does that create a job or an electron today? How does that make power bills cheaper for families today?

Fitz: Well, the Nationals leader, David Littleproud, also says Australia’s regions are already “full” of renewables.

CB: The facts are we need just 0.1 per cent of agricultural land in NSW. That’s what the study shows, 0.1 per cent of agricultural land for renewable energy in NSW. Farmers across the country see opportunities here. Littleproud says people don’t get paid for transmission lines. That’s a lie. In NSW, for example, you get $200,000 per kilometre for a transmission line you host. Farmers see massive opportunities for non-drought-dependent income. I’ve spoken to cattle farmers whose profitability has soared because they’ve got wind farms next to them when they’re allowed to agist their cattle at no cost on those wind farms because there’s absolutely no conflict between a wind farm and cattle. There’s no conflict between a solar farm and sheep and farmers and rural communities maximising benefits. The National Party is out on a limb, in some sort of weird culture war, trying to win a fight with One Nation and Clive Palmer about who can be the biggest climate change deniers.

More than 2000 sheep and lambs are now grazing around the solar panels at ACEN Australia’s solar project in New England.Credit: Supplied

Fitz: But to bring it back from high political machinations to Australia’s kitchen table, the Albanese government came in last election with a promise: to lower our power bills by $275, which obviously hasn’t happened. Was that a “non-core promise” to use John Howard’s infelicitous phrase?

CB: I don’t engage in John Howard’s terminology. It was the modelling of the impact of getting more renewables into the system. The fact remains that renewables are the cheapest. The sun doesn’t send a bill. The wind doesn’t send a bill. We’re seeing that at wholesale prices now, wholesale prices are through the floor.

Fitz: But that’s the point. Ten days ago, The Australian reported that “unusually sunny and windy weather across large swathes of Australia has sent wholesale electricity prices lower in recent days, [and] with soaring levels of renewables, wholesale electricity prices halved during the last week compared to levels seven days earlier ...” But that’s had bugger-all impact on retail prices!

CB: Yes, it takes a while for wholesale prices to translate to retail prices. Wholesale prices are about a third of what makes up retail prices – the other things being distribution and network costs – but a third is a lot. And then you get the Liberals and National saying, “If renewables are so cheap, why are power prices so high?” Well, it’s because we don’t yet have enough renewables. We’ve also made sure while more renewables come online families and businesses have relief with our energy bill rebates.

Fitz: But that’s a legitimate question for me. If the wholesale price of apples has fallen by half, you’d want a big reduction to show up in the greengrocer, if not tomorrow, at least in a couple of days. Why does that not happen in electricity? Who’s getting rich? Are the wholesalers making squillions at the expense of the consumers?

CB: I hear what you say, but the electricity market’s more complicated, and many retailers have bought their energy on long-term contracts, so they’re still paying the old price for some time until the new price flows through. But I tell you what, if wholesale prices are coming down, they will flow through to retail. They might not follow through at 100 per cent, they might not flow through the next week, but they will flow through as sure as night follows day. That’s something we expect from retailers.

Fitz: On Wednesday, a new alliance of 50 organisations, which includes the World Wildlife Fund, trade unions and green energy outfits, called on your government to put in an urgent $5 billion investment to help low- and middle-income earners put in rooftop solar and batteries. They claim this will help save an average $1390 per year off energy bills. Wouldn’t this be an obvious way to more than fulfil the promise made?

CB: We have already done a great deal to help low- and middle-income earners to make the transition. But we will always look at what more we can do.

Fitz: As discussed, the Coalition is pushing the nuclear button harder than ever and gaining political traction.

CB: They just make it up. They say 19 out of 20 G20 countries are going hard on nuclear – that’s a lie. There’s no nuclear in Indonesia or Saudi Arabia. They’ve shut it down in Germany and Italy. There’s only one place in the world that has any sort of serious new nuclear plans, and even that’s very undeveloped, and that’s in just one province in Canada, Ontario. Look at the numbers right now. There is more renewable energy added around the world every couple of days than gets added in nuclear all year. And renewable energy will overtake energy from coal in the next 12 months. Beyond everything else, the Coalition is just on the wrong side of history by banking on nuclear. Look, if I was the energy minister of a country without Australia’s energy resources, renewable energy resources, I might be looking at nuclear. But with everything we have, it’s just wrong for Australia. It’s like saying to Switzerland, look, “You’ve got great mountains and snow, but we think you should give surfing a go.” It just doesn’t make any sense.

Fitz: Not even with small modular nuclear reactors?

CB: Small modular nuclear reactors have been “the next big thing” for the best part of the last 40 years. There’s two small modular actors in the world, one in China, one in Russia. They don’t operate commercially. If they made economic sense, they would have been built by now in the US, in the UK, Canada, Germany or France or somewhere – but they haven’t. They’re not a serious option.

Fitz: Do you never, in the silent watch of the night, stare at the cracks in the ceiling at 2am and think there must be an easier portfolio than this? Or does your wife ever say, “Darling, you don’t need this shit”?

CB: [Laughs uproariously.] I didn’t come to politics to do the easy things. I enjoy a big challenge. And the thing about tackling climate change in this era is that it is, by definition, polarising. You’ve got people saying you’re not doing anywhere near enough on climate, and you’ve got a shrinking chunk of the population who says climate change is a hoax, and anything you do is an outrage, and you’re selling out Australia. Well, I’m used to that, and I’ve been around, and I’ve done some tough portfolios, and if I say so myself, I’ve developed a very thick skin. So, none of that worries me. We get on with the job.