TOM CONNELL: Joining me now is Energy Minister Angus Taylor. Thanks very much for your time, Minister. You've been travelling the country talking about hydro-electricity. Can I ask you, when we think of Snowy 2.0 and this possible project in northwest Tasmania, will all of this mean we can have more renewables in the grid?

ANGUS TAYLOR: Well, Tom, we need it because we're seeing investment in renewables, which is at record levels, in the grid anyway. That's what's happening, and the real problem is that governments haven't given enough thought historically, particularly state governments, to how this is backed up, to how we actually manage a situation when the sun goes down or the wind stops blowing, and pumped hydro can play that role. Now, if we don't do this, then the lights will go off. We've seen in South Australia and Victoria how that has happened - 200,000 houses lost their power only a few weeks ago in Victoria. So, we need back up, we need storage. Pumped hydro is a very effective way to do that. It's about a fiftieth of the cost of lithium batteries - a fiftieth of the cost of lithium batteries. So, it's the best option we have. We had two great options in Snowy and we committed $1.4 billion to that project yesterday, and of course Battery of the Nation, which is in Tasmania, which is a little further behind, but we committed $56 million to that today. So, that is to progress the work on that. These are important investments. There is a reasonable pace at which investment in renewables can happen. The thing that would get us into deep trouble, Tom, is Labor's 45 per cent emissions reduction target, because that would put us into a tailspin. It's too much, too fast and frankly, we've seen independent modelling that tells us what happens then: $9000 slash to the average annual earnings of a worker and 336,000 jobs. So, there's a pace at which this can happen which is manageable, and Snowy 2.0 and Battery of the Nation are projects that can help us with that.

TOM CONNELL: When you talk about modelling, are you doing modelling or do we have modelling on if you add these two projects, for example, how much we can have in terms of renewables in the grid in Australia in certain regions?

ANGUS TAYLOR: They can stabilise a certain amount of solar cells on roofs, so the point is that when the sun goes down, you've got to have access to electricity still. Batteries are very, very expensive relative to alternatives, and pumped hydro can have energy there when you need it - it's dispatchable, it's on demand, it's 24/7 availability. That's the point - that's why this is so valuable to us. Snowy can store an enormous amount of electricity - it's about 175 hours - relative to its capacity, so it's a very, very valuable option for us to firm up that power when people put solar cells on their roofs. We're not telling them not to do that, I mean, lots of people are doing that - but it needs to be backed up, and state governments haven't thought about - and frankly, the Labor Government in Victoria, where they got themselves into trouble, didn't think about it and the Labor Opposition, Bill Shorten hasn't given it any thought - his answer to this is minor battery subsidies, which is just never going to solve the problem.

TOM CONNELL: Right - but as for what you're doing and mapping out this problem, you've announced Snowy 2.0 - this is a business case study. Are you mapping out how many hydro projects, for example, you'll need for how much renewable energy - because you don't have a renewable energy target. So, how does it all match up? Or is this just you'll build a few hydro projects?

ANGUS TAYLOR: No, Tom, we're thinking about this all the time. I mean, it's a moving feast. State governments and, you know, the Labor opposition keep making up new targets they want to reach and they don't firm them, so we firm, we do the right thing, we make sure that there's downward pressure on prices, that there is available energy, because that's what we have to do to get the right outcome for all Australians, and that's what these projects give us. They're very significant projects. They can make a very, very big difference. It's not the end of it, though. We have a program of underwriting dispatchable generation. We've had 66 proposals come through - a range of different technologies and fuel sources in that. We need all of this to make sure that we have a stable, affordable grid with more supply and more dispatchable supply that's available when you really need it.

TOM CONNELL: Of those 66, how many involved coal?

ANGUS TAYLOR: Well look, it's a technology-neutral process and it's absolutely as it should be.

TOM CONNELL: I understand that, but I'm just curious as to how many of the 66 had coal?

ANGUS TAYLOR: Well, we've been very clear that this is technology neutral and we will keep it that way because what we want to focus on is the outcomes. Now, we're doing extremely well on emissions reduction in the electricity grid. As I say, record investments in renewables happening right now. So our challenge in the electricity grid right now is to make sure we have enough supply of on-demand power. That can come from a range of different fuel sources. We'll pick the ones that are most affordable and give us the best outcomes. So, this is not about

TOM CONNELL: I understand that, Minister, and we'll - no, I understand that agnostic element but not everyone in your party is quite that agnostic and there's a, sort of, debate about economics of this program.

ANGUS TAYLOR: Well I am and I'm the Minister.

TOM CONNELL: No, I understand that but I'm just wondering why -

ANGUS TAYLOR: I'm the Minister and we're the Government and this is our policy, but we have, there's a range of different fuel sources and technologies. I'll tell you what will get us into trouble, Tom - what will get us into trouble is a 45 per cent emission reduction target which will slash wages by $9000 and 336,000 jobs. The reason for that is very simple: that target is too high for our economy. We simply cannot achieve it without slashing energy-intensive business and activity in this country. That's what we won't do. That is what we won't do and yet Labor hasn't told anyone how they're going to achieve these targets. So they're either lying about the target or, on the other hand, they have plans which are going to slash these industries.

TOM CONNELL: Right. They've outlined, obviously, what they'll do in energy, but not the broader economy. I take your point on that. We'll keep asking them. But just finally for you, as Minister, another headline about a gas shortage today. Is there anything you can do other than urge the states - some of the eastern states - to end moratoria on gas?

ANGUS TAYLOR: Well, the answer here is: supply, supply, supply, Tom. That is the answer. Now, we're seeing more supply coming through in the northern states, in the Northern Territory. We're backing the Beetaloo. We've been doing a lot of work to make sure we get supply coming through there - in Queensland as well, in WA, we need to see supply. The southern states - we've seen the Victorians with a moratorium on gas. I mean, unbelievable. I argued first back, when I was not even in the Parliament, I did a review with Peter Reith eight years ago, where it was clear - if you had a moratorium on gas in Victoria it was going to end badly. The Victorian Government has refused to budge on this.

TOM CONNELL: I do understand that but we're nearly out of time, Minister, but can I just ask you - and I understand the urgings you're making, plenty of people join you on that, particularly the conventional stuff - but is it just up to the states? Is that where we're at?

ANGUS TAYLOR: No, I'm saying that the states can play a role, and I've already said some of the things we're doing with encouraging supply in the north. The domestic gas security mechanism is also there to make sure that prices aren't pushed up to undue levels, and we've seen some success with that and we'll keep pushing that hard. I know Rod Sims is pushing that extremely hard at the ACCC. So, we've got to keep pressure on prices, but at the end of the day the thing that will really move this more than anything is supply. We'll do our bit but we need to see the states lift these crazy moratoria.

TOM CONNELL: I sense we'll be talking more about those during the election campaign, so we'll chat again soon. Angus Taylor, Energy Minister. Thank you.

ANGUS TAYLOR: Good on you. Thanks, Tom.