Interview with Will Goodings and David Penberthy 5AA Adelaide

Subject
Energy
E&OE

WILL GOODINGS: We also have the federal Energy Minister Angus Taylor on the line and we're going to have a quick chat with him now - not so much about the unique set of circumstances that we're confronted with last night but the summer ahead that is facing South Australia. Minister, good morning and thanks for your time. Would you be able to bring our listeners up to speed with what your understanding is from AEMO as to how we are going to be able to sort of fireproof South Australia from major outages over the coming few months?

ANGUS TAYLOR: Yeah, it's a very serious issue as it was last summer. AEMO has gone into the market to get about 900 megawatts of extra capacity to provide the market for those most extreme events over the summer. They're confident they can get it - very confident they can get it. But this is the sort of measure we're now having to take; a few years ago we didn't have to, but we are now having to take it in order to ensure that we can keep the lights on. And, you know, whatever the cause of an outage, the disruption it causes to households, to businesses, is absolutely enormous and you're seeing that today in South Australia which is why AEMO is going to great lengths to find this extra 900 megawatts. They're confident they can get it. I was at AEMO yesterday in the control centre working through where that's coming from, how we're making sure we can keep the lights on over the summer, and of course South Australia and Victoria are the states where the risks are far and away the highest across Australia. So this is a very, very important issue for South Australia.

WILL GOODINGS: So what's the mechanism by which that would happen? Is it a question of just shuffling power around the country? Like, do we get it from other states? How does it work?

ANGUS TAYLOR: Yeah, it's essentially called a reserve trader mechanism and AEMO go out into the market and say we need 900 megawatts, who can provide it? It can be extra generation; it could be bringing back a mothballed generator; it could be establishing some extra generation supply capacity; or it could indeed be a reduction in demand - so a big industrial business or a data centre says look we can cut our demand if there's an extreme event and help you out. So it can be any one of those combinations of things. As I say, we're confident now that we can get the 900 megawatts. It's a lot of work. This is- look, frankly we should not be in this position and that's why we're putting in place the retailer reliability obligation. What that will mean is years ahead - there are big energy retailers - and we'll have an obligation now, we'll hold them to account to find that capacity, make sure there's enough supply three years ahead of time, so we don't get caught going into summer with a shortage. Now, you know, it is not good enough to get caught going into summer with a shortage. We've got to do this ahead. We'll be asking the states to agree to this reliability obligation in the coming months or so. We certainly hope and expect that they will support us and we need to make sure that this is a problem that we're solving years ahead, not months ahead.

WILL GOODINGS: Good stuff. Angus Taylor, the federal Energy Minister, thanks for that. There's a time and a place for a longer discussion of these policy issues and we will definitely do that down the track. But today we want to keep focusing on the nuts and bolts of all the mayhem that's unfolded overnight.