KARL STEFANOVIC: Well, health workers warned to use less power, millions told not to use appliances, and ridiculously high electricity bills. Basically, we’re paying a bomb for something that is not only unreliable but is dangerous when it’s not working. One person everyone wants to hear from this morning about how we got into this situation and what’s going to be done to fix it is Federal Energy Minister Chris Bowen. Minister, good morning to you. Thanks for your time this morning, really appreciate it. There’s no sugar-coating this, as you know only too well. This sector is a basket case.

CHRIS BOWEN: Yeah, that’s right, Karl. Good morning and good morning to all the viewers. Look, we’ve had almost a decade of stop–start energy policy, not enough investment in new energy, renewable energy, not enough investment in transmission, not enough investment in storage of renewable energy. So, yeah, the system is creaking. There’s many coal fired power station outages, which is putting huge pressure on the system in New South Wales at the moment. Some of those are expected, some of them are unexpected – unexpected breakdowns at coal fired power stations, which is pretty inevitable, really, as the coal fired power stations get older and we haven’t seen that new investment in renewable energy, nowhere near the amount we need, and certainly not in storage and transmission.

But we’re getting on with the job and fixing it. I met with State Energy Ministers last week, as you know. We agreed to develop an integrated national plan, State and Commonwealth – Labor, Liberal and Green, all working together to get the investment we need. Also, as you know, our market operator intervened very extensively yesterday to, basically, take control of the market, put consumers first to end this sort of farce of generators bidding in a way which wasn’t ever going to work and now they are, basically, in control of the market and that will continue for not a day more, but not a day less than it needs to.

KARL STEFANOVIC: How long?

CHRIS BOWEN: Well, not a day more and not a day less than it needs to, until the market comes back to a normal sensible operation. AEMO is our market operator. It answers to me as the Commonwealth Energy Minister – also to all the State and Territory Energy Ministers. It’s under joint management and it is going to take whatever steps are necessary. It has. I’m glad to say, so far, Karl, we’ve avoided blackouts and we’ve load shedding. Everybody is working as hard as possible so that that can continue to be the case.

KARL STEFANOVIC: Okay. So, South Australia, right, says yesterday if they have a shortfall in their own state, they’ll cut supply to the east coast. So, we won’t cut exports to guarantee supply, but our States will cut each other off from supply. I mean, what a mess.

CHRIS BOWEN: There’s some complex issues there. We do have a national energy market on the east coast. So, Western Australia is separate but on the east coast and South Australia, including Tasmania, it’s all one market, and States send energy to each other as and when necessary. There’s always going to be some – when markets are tight, there’s going to be some different approaches. New South Wales is the State that’s tightest today, and we’re all working to avoid any load shedding, if at all possible, this evening. This evening is where the crunch comes.

In relation to gas and I know gas gets a lot of attention here and quite rightly, and we’ve said that we’ll have a look at reforming what powers the Commonwealth has to manage the gas system because at the moment the so called trigger is pretty ineffective for a situation like this; it wouldn’t work. So, we need to look at what powers we have. At the moment we don’t have those powers. We have been talking to the gas companies.

I do want to make this point, Karl: at its heart this is a problem caused by coal fired power station closures and outages, which were – some of which were expected maintenance, some of which were delayed maintenance from COVID and some of it is just old equipment which is failing more and more. We need the new investment. That’s what our policies do and that’s what we’ll deliver.

KARL STEFANOVIC: I think at the end of the day, these issues are incredibly complex, but people just want to know, “Can I turn my power on?” and they want to make sure they’re not getting ripped off. They’re two very basic things that Australians want this morning.

CHRIS BOWEN: Absolutely, Karl. Absolutely. And that’s what everyone is working to deliver. As I said, we’ve been able to avoid blackouts. I’m confident we can continue to do that. I’m confident about that. Subject to any sort of unexpected big closures or outages, I’m confident about that. In terms of the market engagement, that’s why we’ve got regulators on the job who I’m in constant contact with. The Australian Energy Regulator has written to all generators, reminding them of their obligations. And yesterday we stepped in, through the Australian Energy Market Operator, and took control of the market because that’s in the best interests of Australian energy consumers.

KARL STEFANOVIC: I think what really ticks Australians off, too, is these power companies who have taken massive slabs of generation capacity offline as their businesses have become less profitable. You’re a smart guy, but do you need to muscle up against these companies?

CHRIS BOWEN: In effect, Karl, that’s what happened yesterday with the Australian Energy Market Operator saying, “enough of this, we’re taking control of the market.” That’s what the market operator did. They did that. They spoke to all of us Energy Ministers before doing it and they intervened. It won’t be a universally popular move, but it puts energy consumers first. It’s our best chance of keeping a reliable energy supply and it’s our best chance of making sure that consumers aren’t ripped off in any way.

KARL STEFANOVIC: Good, strong move. Thanks for being on the show appreciate it. 

END