MICHAEL MCLAREN: Well, plenty of us are experiencing a good dose of summer today. And it is days like this, and the 40 degree days that are due later in the week, that are the true litmus tests for the preparedness of our energy system to keep up with demand. More people than not have the fans running, the air-conditioning on full ball - the demand surges. And of course, as we know, in previous years, it struggled to keep up. But in previous years, we've had almost 100 per cent coal fired power. Today, the energy mix is changing. Increasingly, renewables are making up stronger and stronger, larger and larger percentages of the grid. But of course, what we also know, particularly with wind power, is that when it's a very hot, dry day, it tends to be very still, calm day simultaneously. In other words, the wind turbines aren't much use. So, how prepared are we going forward, particularly as we increase our renewable energy component, to ensure that on hot days like this, when demand goes through the roof for energy in the grid, that we can cope? Well, that's, I suppose, something plaguing the mind of the Energy Minister Angus Taylor. He's on the line. Angus, thanks for your time.

ANGUS TAYLOR: It's pleasure, Michael.

MICHAEL MCLAREN: Belated Merry Christmas, premature Happy New Year - all of that to you.

ANGUS TAYLOR: Thanks very much.

MICHAEL MCLAREN: I mean just to that very point, because this is something a lot of people will be wondering - how certain are you, as we go forward with this renewable experiment, that we're going to be able to keep the lights on and the air-conditioning running on days like today, where no doubt demand is going through the roof?

ANGUS TAYLOR: Well, it's a challenge, Michael. That's the reality. It's a real challenge, and it's been made a lot more difficult by state governments who have set very aggressive renewable targets without thinking about how to keep enough 24/7, reliable power, which is typically coal, gas, and hydro, in the system to ensure that when the wind doesn't blow and the sun doesn't shine, that there's enough power there. I noticed even today, beyond six o'clock, the expectation is the price is going to go very high. There'll be- it will be tight; the market will be tight. And that happens on many days now. So, this is a real challenge. Now, we are doing an enormous amount to address it. The market operator this year has gone out and searched for a significant amount of extra supply that can bring into the system called the reserve trader, Emergency Reserve Trader requirement. So, we've got extra power ready to go for when the wind stops blowing and the sun stops shining. And we're also- we've just agreed to put in place a reliability obligation which will force the retailers to keep enough dispatchable power, on demand power in the system to be able to keep the lights on in the future. This is- look, frankly, this should have been thought about when these very aggressive targets were put in place in the first place. We are addressing it now, but it is a challenge every day.

MICHAEL MCLAREN: Well, too many people in the past simply put ideology above practicality, and now it's your job to try to catch up; you've been lumped with it. I mean, you're doing your best, clearly. But, I mean, we don't want to end up like South Africa. I was speaking to a South African acquaintance of mine the other day over lunch who said over there - I know we've got plenty of coal and stuff - he said over there, they simply haven't bought enough coal, they have now got dedicated days of brownouts right throughout the year because the grid can't keep up with demand, even in hot days or cold days; it doesn't matter, it just can't do it. So, some people it's almost like number plate lotteries in congested cities, you know, some days you get the grid, some days you don't depending on your post code. I mean, we don't want to end up there. But the great problem with renewables, as you well know, particularly with wind, is that on hot days like this - take Victoria, South Australia, they have high components of wind in the grid. The wind doesn't tend to blow, and so you've got an increase in demand with a decrease of potential supply. I mean, it's the perfect storm, isn't it?

ANGUS TAYLOR: Well, that's right. You talk about South Africa, and they've lost a lot of industries as a result of what you just described. But we've got an experiment running much closer to home, which is South Australia, which had under the Labor government, Weatherill Labor Government, the most aggressive target in the country. And they are having to ration. In fact, they have to keep the wind turbines off for a significant amount of the time. They have to make direct intervention in the market because they have to be able to keep the dispatachable power available and running. So, we have this experiment running in South Australia. Now, the tragedy of it, Michael, is that Bill Shorten's proposing to take those same targets that have been so disastrous in South Australia and apply them across Australia. So we're playing catch up right now; we need to be able to take some time to sort this out. And meanwhile, Bill Shorten wants to increase the targets and go harder…

MICHAEL MCLAREN: Well, it's not just Bill Shorten though, is it? I mean it's some of your own colleagues in New South Wales. The Energy Minister Don Harwin, who you obviously had a bit of a difficult meeting with in Adelaide the other day, wants to have this zero emissions by 2050, or zero net emissions by 20- I mean, how is that even possible?

ANGUS TAYLOR: Well, I mean, I just think they're putting theory above practicality with this stuff. There's nothing wrong with people putting solar cells on their roofs, but we've got to do it at a pace which we can keep up with, which we can manage. I mean, I spent my life before politics in the real world. I mean, in the real world, you've got to make things work. And really, the people who are talking about this stuff haven't dealt with these issues in a very practical way. And, you know, all Australians will pay the price. But look, we are working unbelievably hard to address the situation. We just need time to sort it out and these aggressive targets without the thought about how to keep the lights on, without the thought about how to keep enough dispatchable baseload power in the system; coal, gas, and then hydro in the system to keep the lights on and to keep prices down, of course. That's just as important - more important perhaps, or equally important. Not enough of that thought has happened. We're doing that now. We need a breather and we don't need state governments or a federal government to impose these unrealistic targets.

MICHAEL MCLAREN: Okay. So just before we move on briefly, what you're saying, I think, is that you're doing your best but there's no guarantee with these four or five days of very high temperatures in our big cities and country towns, there's no guarantee that we won't have brownouts or blackouts as the grid struggles to cope.

ANGUS TAYLOR: Well, there's never a guarantee, and we were in a much better position a few years back where we had lots of supply in the system. It wasn't being pushed out. The coal generators like Hazelwood weren't being pushed out of the system. It's much tighter now. So there is no guarantee. As I say, the market operator has done an enormous amount of work this summer to put us in a position where I think we've got our very best chance of avoiding what they call load-shedding - euphemistically called load-shedding - which is a blackout. But there are no guarantees, and what I'm working hard to do is to get through this summer and then make sure we're in a better position to manage the situation in future summers, Michael

MICHAEL MCLAREN: Okay. Now, what about this whole Paris greenhouse gas emission target? I mean, we've promised that we'll meet it. I think you and the Prime Minister have said we're going to get there in a canter - I think that's the verb you all used - and that is that by 2030, we will have reduced our greenhouse gas emissions, economy wide, by 26 to 28 per cent based off the 2005 level. Now, Angus, every bit of information I've been given - and the Australian Financial Review reports the same thing again this morning - is that we will do that when it comes to the national energy grid that we're talking about - the NEM, the National Energy Market, but we won't do it almost anywhere else; and the National Energy Market only makes up about 30- well, less than 30 per cent of our overall emissions. When we look at agriculture, transport, combustion, and all these other factors, industrial processes, all of this, the emissions are going up. Now, are we really going to meet our Paris Agreement in a canter or are we not?

ANGUS TAYLOR: Well, Michael, you are absolutely right in saying that reaching the 26 per cent reduction in electricity is not only achievable, we are expecting now to achieve it well ahead of time - something like 2023, so that's seven years ahead of time.

MICHAEL MCLAREN: But the Paris Agreement is economy wide though, isn't it? It's not just electricity.

ANGUS TAYLOR: I'll come to that. I'll come to that. Let me finish on electricity …

MICHAEL MCLAREN: Yeah.

ANGUS TAYLOR: …because it's very, very important here. There's been enormous pressure put on electricity and yet this is part of the economy which is doing best in reduction of emissions. It's creating other problems for us. So, I'm saying to state governments and the Opposition as well: give us some time, give us a breather. We are doing extremely well on emissions, so let's focus on keeping the lights on and keeping prices down. Now, across the broader economy, the challenge is greater but let me put it in perspective: ten years ago, we thought we had to reduce emissions by 3.2 billion tonnes between 2020 and 2030. We're now down to a target of 10 per cent of that. We've reduced it by 90 per cent and the reason is really very simple. What we've got out there is lots of businesses doing great work to become more energy efficient because it's good business to do that, and we expect 26 per cent to be achieved through the good work of all those Australian businesses and households who are working hard to make sure that they do what they want to do every day, which is to run an efficient business. Now, the real challenge is not 26 per cent. I take- the Financial Review says this, that they need to look back at how well we've done and how we've improved our position over the last 10 years. But the real challenge will be 45 per cent, because let me tell you, at 45 per cent, we are getting rid of a large part of the cattle herd…

MICHAEL MCLAREN: Yes.

ANGUS TAYLOR: …we are getting rid of the large part …

MICHAEL MCLAREN: Yes. Yes.

ANGUS TAYLOR: …of our manufacturing base. We are telling all Australians to drive vehicles that emit very little. They'll all be in mini miners. They're certainly be outside of- they won't be driving traditional SUVs or utes. I don't know what tradies are going to drive. So, that is a challenge which Labor hasn't fessed up to and they need to explain to every Australian how we're going to achieve that target, which I think is completely unrealistic, and even the Business Council has said look, this is a reckless target and it will have a very, very bad effect on the economy and all Australia.

MICHAEL MCLAREN: It certainly will, but it looks like it's the target we're all going to cop because if the polls are half right, they're in like Flynn.

ANGUS TAYLOR: Well, I think Australians need to understand that they are signing up- if they are voting Labor, if they're supporting Labor, they are signing up to a target which means that every farmer will be impacted. They'll be told how to run their land; they'll be told how many cattle they can run. [Indistinct] Tradies will be told which vehicles they can drive. I mean, this is a version of Australia that I didn't grow up in and I will fight against every day through to the election.

MICHAEL MCLAREN: Why haven't- well, I agree with you 100 per cent, I think it's crazy, but why haven't the public woken up to this? I mean, you've been saying- and I think Scott Morrison's tried - you probably weren't helped by the previous prime minister - but you look at the opinion polls, I mean, they just ain't budging anymore. I think people are tuned out.

ANGUS TAYLOR: Well, the reason I'm talking to you on 27 December, on holiday, when most people are on holiday, is because this is important because I think this message does need to get out there. We do need to explain it. We've got to do a better job of getting that through to the Australian people. That's clear. And that's why I'm working every day to make sure not only that we get our electricity system under control - and it hasn't been under control because of the targets we talked about earlier - but also to explain to the Australian people what is involved, what would follow from a Labor government.

MICHAEL MCLAREN: Well look, I'm very glad you did take some time off. I really appreciate that and I hope you can enjoy the rest of your holiday, what little bit's left.

ANGUS TAYLOR: Good on you, Michael.

MICHAEL MCLAREN: Right. Thanks. You take care. There's Angus Taylor there, the federal Energy Minister. What do you make of it? I think he's the hope of the side but whether he can get the message out in time, that's the key. He's right. I mean, it's not party political, it's just fact. I mean, the cost to the economy of Labor's 45 per cent targets will be astronomical. I don't think people have factored this in. But you then have to ask why haven't people factored it in? Haven't the Government sold the message effectively enough? Have they been confusing the message because they've got their own targets? I don't know. What do you make of it?