DAVID SPEERS: Angus Taylor, thanks very much for your time this afternoon. You've been very busy this week - lots of announcements. Today, $50 million to help small business become more energy efficient through specific grants. Tell us a bit about how that will work.

ANGUS TAYLOR: David, it's focussed on helping small businesses and community organisations to reduce their energy consumption through simple initiatives. We know as we get around Australia that there's lots of small businesses that struggle with finding the right way to reduce their energy consumption. There's lots of opportunities for them to do it, whether it's a deli changing their refrigeration or a gym using different air conditioning equipment - there's a whole range of ways that they can reduce their energy consumption. Most small business people haven't got the time to go out, or the resources to go out and do the work. This is a contribution to help them to do it. We know that there's enormous opportunity to do this. We know that not only will it reduce their electricity bills, substantially in some cases, it will also help to reduce carbon emissions, and those things combined make this a program which we think is a very good one for small businesses and community organisations, whether they be Rotary Clubs or men sheds, right across Australia.

DAVID SPEERS: Just the practicality of how it will work - say Joe's Milk Bar wants to buy a new fridge or a new air conditioner or even put some solar panels on the roof, I mean, is there any sort of requirement to show they really need it or that it will make a big difference? How does it work? Do they just put their hand out and get money?

ANGUS TAYLOR: The grants can be up to $25,000 for business and $2,500 for community organisations and it's for three different things. One is actually evaluating what they can do to reduce their consumption, the second is to buy specific equipment that will reduce their consumption and the third is to better understand how their consuming electricity because a lot of businesses don't understand that this particular fridge is the big consumer in their business and if they can change it or if they can use it differently, they can reduce their consumption. So very practical measures which will help them to reduce their energy consumption. We know when we look at energy consumption and carbon emissions for that matter, that energy efficiency is the big untapped opportunity in many cases, particularly for small businesses and that's what this is focussed on. They'll be able to access the grant then, they'll obviously have to do some of their own work as well, and they'll be able to access that to unlock those opportunities. This can work in combination with the instant asset depreciation which the Government provides to small businesses - we've just upped that - and it will allow them, as I say, to find clever and often very cheap ways of reducing their energy consumption and reducing their electricity bill.

DAVID SPEERS: Okay, but from what you're saying, it sounds like a lot of small businesses will be keen. If they need to get a new fridge, suddenly the taxpayer's going to help them do that or a new air conditioning unit, the taxpayer's going to help. I'm just wondering is the taxpayer getting anything out of this?

ANGUS TAYLOR: Well it won't necessarily be for the unit, it might be just identifying - well look, if you look at the numbers, this is $67 million across the full range of initiatives, $50 million into this particular one that we're talking about now, and we'll get a reduction of 63 million tonnes in carbon emission. So that's a little over a dollar per tonne. Now, there has been very few programs in the world that have been that effective and so just on the carbon emission reduction, it's a very, very good investment. On top of that we're actually helping small businesses to deal with one of the big pains that we all see, all the time, which is their electricity bills, their energy bills David.

DAVID SPEERS: No, indeed, look, if you can achieve that for a dollar a tonne, you're right, it's a pretty good outcome. On Tuesday, you've announced a lot of things this week, but on Tuesday $1.4 billion to make the Snowy 2.0 pumped hydro plan a reality. It will cost up to $4.5 billion though in total, so $1.4 billion directly from the taxpayer. Was there - or tell me about the process to determine this was the best way to spend taxpayer's dollars to achieve the energy outcome that we need.

ANGUS TAYLOR: You've got to step back and say what's the business case here, and this is crucial. We've got record investment happening right now in wind and solar and some of that's been driven by state governments, and they in particular have not thought about how to back this up because the wind doesn't blow and the sun doesn't shine all the time. When the wind stops blowing and the sun stops shining, you've still got to have power there available. What pumped hydro can do is make sure that is available at a relatively low cost. Now, Snowy has two parts to it - it provides an extra several thousand megawatts of capacity, but it also, and this is the crucial piece, provides 137 hours of storage which is at a very low cost. The cost of that storage is about a fiftieth of the cost of lithium batteries. When we've got a grid that's increasingly volatile, the generation is very intermittent because of the amount of household and large scale solar going into it, we need to have storage. This is a very, very low cost storage option and that's why the economics are compelling and it's why the economics work David.

DAVID SPEERS: But as you know Minister, some are saying there are other pumped hydro plans you could have gone for. I mean, you didn't put this to tender, you didn't look at whether that investment could achieve better bang for the taxpayer's buck with other projects?

ANGUS TAYLOR: Well, we're looking at a whole range of pumped hydro projects. We're doing work right now and we've invested extra money just yesterday into the Battery of Nation in Tasmania, and there's pumped hydro projects coming through our Underwriting New Generation Program. The truth of the matter is we've got 6000 megawatts a year of new investment in renewables, intermittent renewables - solar and wind, coming into the system at the moment. That's about $8 billion or so a year of investment, it is absolutely unprecedented David. So there is a huge need right now for backup and storage. State governments haven't thought about this. Look, the Victorian Government hasn't given it any real thought, and yet they saw 200,000 houses lose their lights only a couple of weeks ago. And the Portland Aluminium Smelter going offline. So we're stepping in and we're.

DAVID SPEERS: Yeah and there's no doubt about that-

ANGUS TAYLOR: Well there's an enormous need here for dispatchable power.

DAVID SPEERS: Can I just ask, what about the business case? Why won't you release the business case on the Snowy Hydro 2.0?

ANGUS TAYLOR: Well it's Snowy Hydro's business case at the end of the day, but they have released the summary and of course, there's commercial in confidence details that they're not going to release and nor should they. You know, there's no doubt that some of Snowy's competitors don't like you adding supply to the market, but I've got to tell you David, we want to see more supply in this market. We must have more supply in this market, dispatchable, 24/7 supply that can keep the lights on and put prices down and we make no apology-

DAVID SPEERS: I just wonder, I mean, does the business case - what does it say about if new coal-fired power is opened up in Australia, if there are new coal-fired power plants opened up, what does that mean for the Snowy Hydro case? Is it still viable?

ANGUS TAYLOR: We need a lot more dispatchable supply coming into this system in the coming years. That is very clear. We need flexibility in particular, and that's what pumped hydro gives us. It gives us enormous flexibility because it can turn on and off very quickly and it can store, and those two things combined are extremely valuable, given what we've been seeing, and given the fact that-

DAVID SPEERS: Is it viable if there's new coal-fired power opened up?

ANGUS TAYLOR: Well, David, you know, the thing is people want an either or in the electricity market. They want to either choose one fuel source or another or say it's got to be this project or that project - the truth is, if you look at the need for new dispatchable supply in the electricity network and market in the coming years, it is enormous. We have a huge need here. That's why we've invested in Snowy.

DAVID SPEERS: I appreciate that - I'm just coming back to the question: is Snowy Hydro viable if there's new coal fired power?

ANGUS TAYLOR: Well, you're making it an either-or question and my point is it's not.

DAVID SPEERS: No, I'm not. I'm just asking does the business case that you've seen, does it stack up if there's new coal-fired power?

ANGUS TAYLOR: Well, you're making it an either-or question and it simply isn't. We need a lot more supply in the system. Now, take a step back: we're saying we need a lot of supply, we're saying there needs to be balance in that supply - a range of different fuel sources. The approach the ACCC recommended to bring in new supply and competition into the market was technology agonistic, technology neutral - focus on the outcomes. There's an obsession, there's an obsession amongst some about the fuel source. We're obsessed about the outcomes, David.

DAVID SPEERS: Are we right to take from that that it still stacks up if there is new coal-fired power? What you're saying, am I right to assume that it's okay if there's new coal fired power?

ANGUS TAYLOR: Well, it stacks up - it's a bizarre question, because what you're saying is if there is other sources of power, does Snowy stack up? Of course it does. Snowy is not a stand-alone project that solves every problem in the electricity grid.

DAVID SPEERS: Okay. That's all I was asking.

ANGUS TAYLOR: Snowy and other projects will solve the very fundamental problems we have in the grid.

DAVID SPEERS: That's all I was asking.

ANGUS TAYLOR: But it'll be a combination of technologies.

DAVID SPEERS: So, to be clear on that - if new coal fired power opens up, Snowy Hydro is still a good investment for taxpayers?

ANGUS TAYLOR: David, I think what you've tried to ask me through a backdoor is whether we're going to back new coal fired power, and what I will tell you is we're underwriting new dispatchable power into the system. We've made clear that we want pumped hydro in the system - we've got 66 proposals that have come forward to us - we're sticking with the ACCC's recommendations about how to do this - it should be technology neutral, but we should focus on the outcomes, and that's exactly what we're doing.

DAVID SPEERS: Okay. No, I'm just trying to establish whether this is a smart investment for taxpayers, all these billions of dollars.

ANGUS TAYLOR: Yes, sure.

DAVID SPEERS: So, I'm just trying to clarify that it's okay to do this for taxpayers, even if you do go down that path of more coal-fired power as well. Just on Tasmania though, too, because this second interconnector could cost around $2 billion or more - that too would seem to rely on an expansion in the percentage of renewables in the system at the moment. Is that right? That all of this pumped hydro really will require more renewables?

ANGUS TAYLOR: So, David, it's the other way round, it's the other round. So, let me give you the facts, which are just lost on in this debate so much. We are seeing 6000 megawatts a year - this is in a market a little over 50 now - 6000 megawatts a year being added in intermittency, and that's committed now, for the next three years or so, over $25 billion of investment in intermittency. Now, the state governments that are encouraging this, in particular in Victoria and South Australia have been encouraging this for many years, have not thought about how to make that dispatchable power, how to make sure that power is there when you flick the light switch after the sun's gone down or the wind stops blowing, the need here to firm this up is huge. That's the guts of the business case, whether it's for Snowy Hydro, whether it's for Battery of the Nation, or whether indeed it's for, you know, a gas-fired generator that can flick on and off very quickly that we're looking at - that might be a project we're looking at in the underwriting new generation program. We have a huge need here because of those investments that have either happened or are already committed. The result of not solving this problem is really evident. We saw it in Victoria a couple of weeks ago, where 200,000 houses lost their power and the Victorian Government denies any responsibility for making sure there's back up there. Now, we're not going to take a backwards step on this. We've got to get that into the system. That's why we're focused on these projects. We're doing what a responsible government should do, which is to step up and solve a problem which is very real and which most people seem to want to ignore.

DAVID SPEERS: Energy Minister Angus Taylor, we will have to leave it there. Thanks very much for joining us this afternoon.

ANGUS TAYLOR: Thanks, David.