STEVE PRICE: The Federal Minister for Energy, along with the Prime Minister Scott Morrison, announced this morning that they're going to spend, we are going to spend $102 million to improve the connection on the east coast power grid. The money will be fast-tracked to upgrade the interconnector between New South Wales and Queensland. The Minister for Energy is on the line. Thanks for your time again.

ANGUS TAYLOR: Thanks for having me, Steve.

STEVE PRICE: Why do we need to do this?

ANGUS TAYLOR: Well, we need more supply in the New South Wales market, Steve. We desperately need to make sure that on those peak days in summer that we have enough supply available to keep the lights on, and of course, all year round, we want more supply available to put downward pressure on prices. This is a good project because it has the potential to do both. We can do it relatively quickly. As these sorts of projects go, it can be in place by the end of 2021. We know as a result of that, that extra supply can make a real difference in a timely manner. So, it's actually an underwriting agreement. It's not a grant or a loan, it is underwriting, so it will only be called if necessary, but it's there to accelerate the process of getting this project in place, which will be financed by the private sector.

STEVE PRICE: Without it, we could have shortfalls of energy, or power, electricity in New South Wales, and particularly in hot summer days. Does that mean that that is a risk this summer?

ANGUS TAYLOR: It's always a risk, Steve. It's always a risk, and it's become a risk increasingly in recent years. Unfortunately, it can be particularly contagious. So we have a real problem in Victoria right now, where they took Hazelwood out of the grid. They've also got very limited access to gas down there, and they've been pushing intermittent renewables into their system. So, Victoria is in a very fragile state. The bad news is, that can be contagious. It can go to other states - it can go to New South Wales, so we need to sure up New South Wales as well. The New South Wales Government has been very collaborative in getting more supply into the market. They want to solve these problems. We've had more of a challenge in Victoria, but I'm pleased with the progress we're making in New South Wales.

STEVE PRICE: We're basically hanging off the end of more modern coal-fired power stations in Queensland. I mean, I note you make the point today that the traffic is a lot of the time one way now. But the interesting point is, it is coal that's still keeping the lights on.

ANGUS TAYLOR: 100 per cent.

STEVE PRICE: Have we got any closer to that point of saying we need to build, and will build, a new coal-fired power station anywhere?

ANGUS TAYLOR: Well, the first and highest priority is to make sure our existing coal-fired power stations are running well and for as long as is needed. You know, Liddell is the case in point here, Steve, where we're saying either like-for-like replacement or life extension. No in-between. That's the highest priority because that's sort term. We can ensure that we have the supply we need and we don’t end up like Hazelwood.

STEVE PRICE: Well, have you convinced those operators to keep that up?

ANGUS TAYLOR: Well, we had a life extension of course, or have a life extension of Liddell already. We're in discussions right now with AGL to make sure we've got a plan beyond the current life, which has been extended. So we've got more time to deal with this. In South Australia as well, we've got an extension of a baseload generator down there. But we're working with each one of the operators of our big baseload generators, which are mostly coal, to ensure that we do keep them in the marketplace if there isn't like-for-like replacement. Now, none of that's to say that there don't need to be new generators - there do. You know, having transmission is good, it can help, but it's not the whole solution. That's why, as you know, we've got 12 projects in our Underwriting New Generation Program. We're now down to the short strokes in advanced negotiations with a number of those projects.

STEVE PRICE: Isn't energy a national asset?

ANGUS TAYLOR: Well, it's certainly become increasingly national. I mean, our energy grid has been state-based. We have come from a place where the Constitution doesn't have any powers in it for the Commonwealth Government on energy, but we have been playing an increasing role. Partly, because it just hasn't been getting the outcomes we need it to and we've had to intervene. Our focus in transmission, for instance, is on the interconnects between states. We leave it to the states to do their transmission and distribution within the state. But, we have a role to play. It's very difficult to play that without a collaborative state though, Steve, and what we've got in New South Wales is a state that's working with us well. That's not true of every other state.

STEVE PRICE: Well, in South Australia you had a Labor government that blew up a perfectly functioning power station.

ANGUS TAYLOR: Well, Victoria as well, of course, with Hazelwood. But you know - they didn't literally blow it up but-

STEVE PRICE: Well South Australia literally blew it up.

[Laughs]

ANGUS TAYLOR: They did literally blow it up in South Australia. You're quite right. Look, and this is the problem, you can't do this and think that you can replace it with a generator that relies on the sun or the wind. That's not like-for-like replacement. I think that's now coming home to people because they've seen what's happened in South Australia. Certainly in New South Wales, there's an understanding that you can't blow up your coal-fired or gas-fired generators and replace them with variable renewables and expect to get the right outcomes. But sadly, in Victoria, we haven't got a state government that sees the need to get this right.

STEVE PRICE: Speaking of blowing things up, you nearly blew yourself up with that mistake on Clover Moore's travel budget. How did you get that so wrong?

ANGUS TAYLOR: Well look, I made a statement on this about what happened on 9 September, where we prepared a letter from the City of Sydney Lord Mayor, accessing a report that was on the website. I've laid out, as of Friday last week, the details of what happened there, Steve. And I'm getting on with the job of bringing down prices and keeping the lights on, because that's what the Australian people want me to do.

STEVE PRICE: Yeah, I don't think the average public give a stuff about, you know, that. If there's a mistake, you put your hand up and say I made a mistake and I shouldn't have done it. But on the power price, any evidence that they're coming down?

ANGUS TAYLOR: Well, there is evidence they're coming down. We're seeing it in the Bureau of Statistics CPI figures. But it doesn't apply to every customer. It's coming down on average, and there is no doubt there are customers who haven't yet benefitted. We want to see it come down across the board, and that's why we're putting in place initiatives like the one we announced today.

STEVE PRICE: Okay, thanks for your time, as usual.

ANGUS TAYLOR: Thanks, Steve.