SIMON LAUDER: Now last week the board of Snowy Hydro approved a final investment decision for the Snowy 2.0 pumped hydro scheme. Now it's over to the company's major shareholder to decide if the project will go ahead. Snowy 2.0 would create 2000 megawatts of on-demand generation and 350,000 megawatt hours of storage. It's a multi-billion dollar project and the federal government must now decide whether it will go ahead. Angus Taylor grew up in Nimmitabel and is the Energy Minister in the Morrison Government. Minister, good morning.

ANGUS TAYLOR: Good morning Simon.

SIMON LAUDER: Is there a rough timeline for a federal government decision on Snowy 2.0?

ANGUS TAYLOR: Look Simon, we're working it through. We only received a final business case a short time ago so we're working our way through that now. But look, it goes without saying that pumped hydro is a technology- it's a means of producing and storing electricity that's [sic] time has come. It's very clear we have a much more volatile electricity market than we had a few years back. We need to store in energy on a scale we never have had to before, and we also need to put downward pressure on prices, particularly at those peaks - and pumped hydro can do that. So, you know, the broad business case is a very strong one, but we've got to make sure the numbers stack up. We're working our way through this. It's a big investment for the government. And it's crucial for all taxpayers that we do the right thing by them and make sure the investment is a good one.

SIMON LAUDER: So the Snowy board make this announcement mid-last week. There was no new information or details on the costs of the scheme or its economics, but presumably you now have all of that at hand?

ANGUS TAYLOR: Yeah, we have the latest numbers and of course that's the crucial piece of this because it does have to stack up. But as I say, look, we have an enormous amount of intermittency coming into our electricity grid - wind and solar, lots of people putting up solar cells on their houses on a scale we haven't seen before. And that makes the case stronger because when the sun doesn't shine or the wind doesn't blow you've got to have power ready and available. And when too much is being produced - which is increasingly the case in the middle of the day when the sun's shining - you've got to be able to store it. So that's the core of the business case and we've just got to make sure those number stack up, Simon, before we make our final decision.

SIMON LAUDER: Alright. And for you, what is the- I guess the key in terms of whether it does stack up and whether it does get enough market- bring enough market benefits to us to pay back the cost of building the scheme?

ANGUS TAYLOR: Well, that's right. So it's both market benefits for the investors which is every Australian- will effectively be an investor. But also it's going to put downward pressure on prices, and that's crucial. We think it has the potential to do that. We do want to see that and that's central to the business case. But as I say we're working our way through that. We know a decision needs to be made on this sooner rather than later and we're poring over the numbers now.

SIMON LAUDER: Alright. And now, you've got a family connection here. Your grandfather was the chief engineer and commissioner of the original Snowy Hydro scheme. So, I guess, a unique perspective for you as Energy Minister?

ANGUS TAYLOR: Well it's true. I mean, it's an amazing project and anyone living in and around the Monaro and Snowys knows it well and there's deep affection for the project, and of course I was brought up with that. I mean, it is an extraordinary project. It's made a great contribution to the nation, both during its construction and afterwards, and of course it's close to the heart of many of us who live and or grew up in the region. But at the end of the day we've got to be hard-headed in the final decision, Simon, and that's what we're working through now.

SIMON LAUDER: There was a question from Jindabyne about this last week when we were talking about it, on whether I guess Red Energy customers should be given a discount given their proximity to the scheme and the impact of the scheme on them. I guess as the owner of Red Energy, would the Commonwealth consider that?

ANGUS TAYLOR: Well look, we run it at arms length. But that's ultimately a big and very important part of the role that Snowy plays and Red Energy, its retail arm, plays is to put downward pressure on electricity prices. Snowy's actually unique in the electricity market because it has far more retailing than it has generation. So it has an interest in pushing prices down, and we certainly want to see it playing that role. And not just for people in the region but also for all people who are using electricity across the nation.

SIMON LAUDER: We've heard a lot about the government's plan to use a big stick in this phase to bring down retail prices. How much did you hope to drive household energy bills down by?

ANGUS TAYLOR: Well look, we asked all the energy retailers to reduce their prices for standing offers. That's the contract you get if you haven't had time to go and negotiate a special offer, and there's still a lot of Australian families and small businesses on standing offers. We asked for reductions on January 1. Every company's coming with different numbers but typically we've seen reductions of 10 per cent or more in many cases, which is a good start but we need to see more over the coming months and years. And this is part of the reason why we're bringing more supply into the market side. This is absolutely crucial: to get prices down, we need more supply. Pumped hydro's a good source of that supply. It won't be the only technology but it's very important we get that extra supply into the market and the big energy companies do the right thing. And we have seen behaviour that the ACCC has pointed out was not appropriate, and we want to see prices continually coming down. That first round of prices for people on standing offers- price reductions for people on standing offers will come through on January 1.

SIMON LAUDER: Last week we had the Australian Energy Regulator release its review saying that emissions policy instability in particular is a bit of an impediment to investment to the national energy market. Is that a priority for 2019 as well?

ANGUS TAYLOR: Well I actually don't agree with that. And I mean, regulators are free to say what they want but I actually strongly disagree with that. We've got $15 billion of investment - not including Snowy - coming into our electricity grid right now. Fifteen billion dollars, absolutely unprecedented. So we're getting the investment. That's not the problem. The problem is that it's got to be balanced. It's got to be balanced across a range of technologies in order to be able to bring prices down, keep the lights on. We've got to retain the supply we've got in the market, and that's been a struggle in recent years. And that will unquestionably bring prices down.

SIMON LAUDER: Angus Taylor, we're out of time already but thanks for speaking with ABC South East.

ANGUS TAYLOR: Absolute pleasure, Simon.

SIMON LAUDER: Angus Taylor there. He's the Federal Minister for Energy.