DAVID SPEERS: Yes, as I said this is clever politics from Labor to adopt what is the government's National Energy Guarantee, got so many statements on the record from Scott Morrison and Josh Frydenberg arguing why this National Energy Guarantee, why it's the only way to get prices down, prices will go up if we don't have it and so on. Plenty of business groups all backed it as well. But it is different if you have a much higher emissions reduction target - a 45 per cent emissions reduction target - compared to where the government was at, nearly half that of 26 per cent emissions reduction target, as well as, as Annelise mentioned there, the 50 per cent renewable energy target or goal that Labor wants as well. But the reality is there's little likelihood of that National Energy Guarantee becoming a reality, so what's Labor going to do? Well, part of it is the subsidies for the household batteries but the big part of it is actually underwriting, helping private investment in new power generation and Labor is open to hydro, renewables with firmed-up gas or batteries as well as gas itself, not coal though, it's not going to underwrite new coal-fired power. That is the big difference between the Labor approach and the government's approach, the government wants to underwrite all sorts of new power generation as well - including coal - Labor does not. So, that's the main difference between the two sides at the moment. On top of this Labor is saying - as well as underwriting new power generation - subsidising household batteries, it would also have further announcements that will come in in the next few weeks or months to do with the big emitters, to do with the transport sector as well - we're talking about vehicle emissions primarily there - the agriculture sector too, which will be quite interesting to see where they go on that. So, a few big elements to come in all of this but Labor trying to show that it's serious about getting emissions down than the government. It's dumped the National Energy Guarantee but is yet to spell out exactly what it is going to do to achieve its Paris commitment. To that end I spoke to the Minister for Energy, Angus Taylor. He's been at the Tomago aluminium smelter today in the Hunter Valley. And a pretty handy place to be when he was making the point that Labor's approach is going to force businesses like this aluminium smelter out of work. Have a look.

[Excerpt]

Minister, thanks for your time this afternoon. Tell me firstly, with Labor's plan to subsidise household batteries, you've likened this to Labor's very controversial Pink Batts scheme. How are the two similar?

ANGUS TAYLOR: Well, it's a hair-brained scheme that was cooked up in a cafe in Newtown as far as I can tell, Speersy. And when I step back from it, I say, to give you a sense of it's doing, it would keep this smelter where I am right now - Tomago, in the Hunter Valley - would keep it going for less than 15 minutes - less than 15 minutes - if every one of those batteries were installed. Now, the challenge we face right now is an enormous amount of wind and solar coming into the system in the next couple of years, three years we'll go from 17.5 terawatt hours to 44.5, it's a huge increase and it needs a real solution in order to make sure we've got enough power when the sun doesn't shine and when the wind doesn't blow. And with that in mind we'll have a shortlist of projects, new supply for the market, dispatchable 24/7 supply that's there when you turn the light-switch on, when this smelter, this facility needs it, for instance. We'll make sure that there is a shortlist of projects by early next year and we get that supply into the market. A few batteries is not a solution...

DAVID SPEERS: And I want to come to that because...

ANGUS TAYLOR: ...is not a solution to this problem.

DAVID SPEERS: No and I want to come to your plan that you touch on there but just back to this question, I mean, Labor's Pink Batts scheme under the Rudd Government three installers died, a lot of inquiries into it. Are you saying- what are you saying about this battery- this household battery plan, that it would be somehow dangerous?

ANGUS TAYLOR: Well, what I'm saying is that when Labor sees a problem, their answer is to throw money at it, without thinking about how to really solve the problem. We've worked very hard, thought hard about how to solve the problem, we're doing it, we're getting on with it and we've said we need a 24/7 dispatchable power in the system. We'll have a shortlist of projects early next year. Labor, on the other hand, their answer is throw $200 million at it, enough storage to keep this particular facility open for less than 15 minutes. I mean, that is not a solution [inaudible].

DAVID SPEERS: It's not a battery for aluminium smelter, it's a battery for the home. I'm just wondering what's wrong with household batteries? Is there a problem we should be worried about when it comes to the installation of household batteries?

ANGUS TAYLOR: Look, people are more than welcome to put household batteries in. The point is that Labor's spending $200 million dollars to do it - and it's not solving the underlying problem, which is we need affordable reliable power in our system, affordable reliable power that can support any industry as well as support businesses and hard-working families.

DAVID SPEERS: But to be clear there's no problem with household batteries and if the government's subsidising them by $2000 of an $8000 battery, is there any particular danger or problem with that apart from the expense of money?

ANGUS TAYLOR: Well, Speersy, there was nothing fundamentally wrong with insulation either. The fundamental problem is that Labor's throwing $200 million at something, taxpayers' money, without solving the underlying problem and this is what we constantly see from Labor, they're interested in the optics, they're not interested in solving the real problem, which is that Australians want reliable affordable power - households small businesses as well as large businesses like this one, 1800 jobs supported in the Hunter Valley and the best that Mark Butler could do was put out a press release saying that when they lose their jobs, they're going to look at retraining them. I mean, that is pathetic, Speersy, these people want to keep their jobs.

DAVID SPEERS: So, for smelters like that one and the jobs tied up there at the Tomago smelter, here's what the Aluminium Council said only a few months ago back in August, it said it was - quote - fundamental the National Energy Guarantee be passed. It also joined a joint statement at the time saying no other options offer both better policy and more political durability. Do you accept that even the aluminium industry wanted the National Energy Guarantee?

ANGUS TAYLOR: Well, I tell you, I know the aluminium industry reasonably well and what they want most of all is affordable reliable power - and that is the absolute key. What you see in Labor's policy, by the way, It's not the mechanism that will drive Labor's policy, it's the target, and their target is 50 per cent renewable energy target, 45 per cent emissions reduction target, that is going to drive out industry and activity fast in large quantities. Because you can reach your target, which is in line with the natural place of which energy efficiency and technology can drive improvement but that is too fast. It is simply too fast and the result will be businesses like this one, there's a number of aluminium smelters or refineries around the country but also other industries - agriculture, transport, these other heavy manufacturing like steel - those industries will be driven out of business and they will be driven out of business because there is no other way of achieving a very, very significant target way beyond - way beyond - any international obligations, way beyond what technology and natural energy efficiency can achieve.

DAVID SPEERS: So, what will you do to help- I mean, as Labor rightly points out the coal-fired power fleet in Australia is aging, they're all going to close down over the coming years - decades some of them. But what will you do, what's your plan to help a smelter like that one?

ANGUS TAYLOR: Well, It's simple. It's simple. We need a small number of dispatchable 24/7 generators, new supply coming into the system as well as retaining all the baseload dispatchable power we possibly can in the system to keep prices down to keep the lights on and to keep factories running. That's what we need and we've said we'll have a short list of projects early next year, which we'll start working our way through and we'll bring that extra supply into the system but it'll be 24/7 supply. It will be supply which can be switched on or will be on when the wind doesn't blow and the sun doesn't shine. Now, we've got lots of renewables coming into the system. There's no shortage of that - lots of it. The real challenge is how to make sure we've got that reliable supply that, as I say, can keep the lights on can keep small businesses in business can keep [inaudible]...

DAVID SPEERS: And this is where we get to what seems like a fundamental difference. Do you think renewables that are firmed up with gas peaking plant or maybe batteries but more likely gas peaking plant can do that job?

ANGUS TAYLOR: Well I mean I'm not going to get into the technology wars and the fuel wars. It's the outcome is that's [inaudible]...

DAVID SPEERS: Well with respect, you're the Energy Minister, you'll have to, won't you?

ANGUS TAYLOR: But what is crucially here, what is crucial here, is that you need enough supply in the system that you can turn on or is on when you need it. That's the key and what's happening in our electricity system what [inaudible] ...

DAVID SPEERS: I appreciate that, I'm just asking, what can do that? What is needed- what you're identifying there is need?

ANGUS TAYLOR: Well it's pretty simple. It can only be hydro, gas, coal or there's a little bit of early-stage solar thermal we're starting to see around the place. And as I say, there are some batteries ...

DAVID SPEERS: And which is cheapest at the moment? To help Tomago, what is going to be cheapest, hydro, gas, coal, which one?

ANGUS TAYLOR: They all do different things, Speersy, and what we want as the outcome is affordable reliable power and the different technologies combine in different ways. The crucial thing is you need a balanced system. That's the key. So picking one over the other is just a false debate. You need balance. The problem we've got right now is there's been a fundamental change in that balance away from dispatchable 24/7 power and we've got to make sure we've got enough in there as that happens. And that's been central to our policy. What Bill Shorten is proposing - Bill's batteries - his shift from pink bats to pink batteries is a drop in the ocean. It will not do the job.

DAVID SPEERS: Alright, so to ...

ANGUS TAYLOR: We need a more fundamental profound solution.

DAVID SPEERS: To come back to your plan though in the New Year, your policy will see the underwriting of a mix of those technologies - hydro, coal, gas?

ANGUS TAYLOR: Well we need a mix in the system. That's ...

DAVID SPEERS: So you'll underwrite that?

ANGUS TAYLOR: It's got to be - absolutely. We've been very clear about that. The ACCC recommended that some of this should happen. We have said we will adopt that recommendation and run with it. We're not going to get into the fuel wars or technology wars. We're going to focus on the outcome which is making sure that the power is there when you flick the switch on; that the power is there for this business. Look, if you go for an hour and a half without power in this business, it's finished. It is in deep, deep trouble. And we can't afford to have that. We've got to have this affordable reliable power. The 1800 people whose jobs are supported by Tomago Aluminium - equivalent in many other businesses around Australia - rely on their affordable [inaudible] we've got to make sure we've got this.

DAVID SPEERS: So it sounds from that answer though that as part of this there will at least be a new coal fired power station built?

ANGUS TAYLOR: Well you're speculating. I'm saying that there'll be a mix of fuel sources in the short list and we'll work through to make sure we've got the right balance across the system. I'm not going to anticipate the process but what I am going to say is it must be power that you have when you need it.

DAVID SPEERS: But is anyone seriously saying to you at the moment as part of this negotiation that they're willing to build a new coal fired power station?

ANGUS TAYLOR: Well I mean look, there's people building coal fired power stations all around the world, David. All the time. Huge numbers of them.

DAVID SPEERS: But they're also building a lot of other things. I mean the International Energy Agency's report this month says quote: that renewable energy has now surpassed fossil fuels as the main source of new electricity generation. So it's reached that tipping point globally.

ANGUS TAYLOR: If you've read that report, you'll see that there's huge numbers of coal, gas, hydro, you name it they're all being built. There's balance.

DAVID SPEERS: Yeah, but the point it's making is that that tipping point has now been reached. That's right isn't it?

ANGUS TAYLOR: Well no, what I'm saying is if you read that report what you will see is there's a range of fuels being used all around the world. You've got to get balance in a system; you've got to have the 24/7 dispatchable power. That means coal, gas, hydro. That's where it comes from, as well as the extra renewables that are coming into our system now. If you don't retain that balance, prices will go up. Now if you want an illustration of this look at South Australia. Look at South Australia where they have amongst the highest power prices in the world after Labor pursued a 50 per cent Renewable Energy Target. Bill Shorten wants to take that experiment national. He wants to take that experiment national. Now we don't need any modelling to see what happens. Look at what's happened in South Australia: amongst the highest prices in the world struggling to keep the lights on.

DAVID SPEERS: A couple of other things. Your big stick divestment power that you want Parliament to support; Labor doesn't back it. Look, it's not something the ACCC recommended either. Can you just give us an example of where it might be used? Where might use the power to break up a power company?

ANGUS TAYLOR: Well the crucial thing here is to attract and retain dispatchable power, 24/7 power, in our system. If a company decides it wants to withdraw that power with limited warning in order- and in a way that will distort the market - it may be to their commercial advantage to do it - well, we may need to take action. It is a last resort David, and this is crucial: these powers exist in other countries around the world, countries like ours - US and UK. They have been used in the US and UK. They are a last resort but the crucial thing we're trying to achieve here and more broadly in our policy is to make sure there's enough supply in the system to keep prices down; to keep the lights on even on those days where the sun doesn't shine and the wind doesn't blow.

DAVID SPEERS: A couple of final questions. When you do go to the election sometime early next year, can you say power prices will be lower than they are today?

ANGUS TAYLOR: Well we've already seen dividends from our policy. We've already seen outcomes David, where we've had AGL, it's the first of the big energy companies, to realise that we are- or to acknowledge in what they're doing that we are serious about getting prices down. Our expectations on them are...

DAVID SPEERS: I'm sure you are aware but the future gas price [inaudible] is set to go up from January.

ANGUS TAYLOR: [Inaudible] and deliver a better deal. So, we've seen - well just let me finish. Well ...

DAVID SPEERS: Can you give any sort of guarantee prices will be lower come election time?

ANGUS TAYLOR: Hang on, hang on. Every standing offer customer AGL has in Victoria and New South Wales will see a 10 per cent reduction from 1 January. And we expect the other companies to follow suit. Look, this is crucial and these are the customers who are worst-positioned to get their own prices down. They're often customers who are not technology-savvy or simply too busy to be able to get on the phone and negotiate for hours to get a better deal from the companies. Ten per cent reduction in Victoria and New South Wales, significant reductions in other states as well. We expect the other companies [inaudible] ...

DAVID SPEERS: But generally for voters looking at this, prices will be cheaper on election day than they are today?

ANGUS TAYLOR: Well we, as you know, are absolutely determined to get prices down. I've just told you what AGL's doing. I [inaudible]

DAVID SPEERS: I know but I'm just wondering if you can give any sort of guarantee or [inaudible]

ANGUS TAYLOR: And I have told you I have learnt over a long period of time, when you drive up supply, you drive down price, and that's exactly what we're doing, David.

DAVID SPEERS: Okay. Final one Angus Taylor, the Paris Agreement. Do you support Australia staying in the Paris Agreement?

ANGUS TAYLOR: Yeah, we have international obligations. We've signed up to it. The point I would make though, is we're not going to cruel our economy in order to achieve it.

DAVID SPEERS: But do you support Australia staying in the Paris Agreement?

ANGUS TAYLOR: We are not going to burn our agricultural sector, our transport sector, our manufacturing sectors, in order to achieve that. And the good news is when the target is 26 per cent, we can do that. Natural technology gains, efficiency gains will deliver. But Labor's 45 per cent target on the other hand will ...

DAVID SPEERS: But just for the record, do you support staying in the Paris Agreement?

ANGUS TAYLOR: Yes. I said yes. I've said yes.

DAVID SPEERS: Okay.

ANGUS TAYLOR: The crucial point here is the target. And Labor's target is absolutely irresponsible. It's reckless and it will be a wrecking ball through the economy.

DAVID SPEERS: Energy Minister Angus Taylor, thanks so much for joining us this afternoon. Appreciate it.

ANGUS TAYLOR: Thank you David.