Australia Loves Solar, So Why The Diesel Addiction? Deep Dive Australia 02: Chris Bowen

Chris Bowen

One thing I think we are getting very much right and that we can share our learnings with the world is, in our view, the road to decarbonisation goes through households. So we are really, I think, scoring runs, to use a cricketing term, when it comes to households. So as you know, we lead the world in rooftop solar. So 35% of Australian residences have solar panels on their roof, and that's 4.3 million houses. We have more solar power than coal power, more rooftop solar power than coal power in Australia.

Michael Liebreich 

Hello, I'm Michael Liebreich and this is Cleaning Up. We're filming in Canberra, that is the land of the Ngunnawal people. So I'd like to pay respect to their elders, past, present, and future, and acknowledge their link to the land.

I'm filming today with the Minister of Energy and Climate, Chris Bowen, in his office here in Parliament House. Chris, welcome to Cleaning Up. 

CB

Great to be with you, Michael. Long time listener and delighted to be joining.

ML

I think you know the rules. We start with you in your own words. I've given you a very short introduction, as you heard, and just to give the audience just the short version of what you do, but also who you are.

CB

Yeah. So I am Australia's Minister for Climate Change and Energy, and have been now for four years, which actually makes me one of the longest serving Climate Change Ministers around the world, as it happens. When I think about who was Climate Change Minister when I came in, there's not many consistent faces.

And in Australia, we combine climate and energy, one portfolio, which is maybe something we can come back to later. I'm a member of Parliament, so we're a Westminster democracy, so every minister must be an elected MP. I'm a representative of my constituency in Western Sydney, which is where I grew up and where I still live, where my wife and I have raised our kids. I'm an economist by training, an economics degree, and have been in Parliament now for 22 years, and as I said, been Climate Change Minister for four of them.

ML

Very good. And provocatively said who you are, because I wanted a little bit of the background. I think it's always helpful for the audience to know a little bit about what you study. So economics?

CB

Economics was my undergraduate degree. I got an international relations degree as well, and a languages degree, but economics was my first love.

ML

Politics, international relations, and languages. And you mentioned as we were just chatting before, Indonesian.

CB

Yeah, I got my Indonesian degree later in life because I was concerned that Indonesia is this country which is one of our nearest neighbours. I can't think of two countries in the world that are so close and so different in language, in history, in cultural background, in religion. And you know, Australians and others tend to swan into Indonesia and expect everyone to speak English, which you know, plenty of the elites do, but I think it's pretty arrogant to not at least try. So I'm not particularly, my Indonesian is not as good as I'd like it to be because I don't get opportunities to talk it very often, so I get a little bit rusty. But it comes back pretty quickly when I do give it a good go.

ML

So I've been to Indonesia and Australians swanning in and expecting everybody to speak English, that's what I saw in the bars in Bali and so on. And I couldn't get out of there fast enough. No offence to your fellow countrymen, but that was not what I was looking to see.

CB

No, and it's not so much about the tourism in Bali. It's more the interaction with government and business. They're a fast growing, wonderful economy..

ML

Yeah. So I think where we need to start is we are in the third month of the crisis in the energy markets that's resulted from events in the Gulf. And I think it'd be interesting to hear how you, what have you done? What has Australia done? And I know that you're very exposed to aviation fuel particularly, nevermind everybody else has got a problem with just oil prices in general. You've got some aviation fuel, diesel, some very specifics, which I spoke about actually yesterday at the National Press Club, where they kindly invited me to speak and that sharpened my focus on Australia's response to that.

CB

Yeah. So of course, I mean, we've all been impacted in one way or another, but Australia's has been particularly exposed because we only have two refineries and we have a small amount of oil drilling. Obviously we're very big in coal and gas, but we're very small in oil. But our refiner fuel predominantly comes from Southeast Asia. And while 20% of the oil goes through the Straits of the Hormuz, 70% of Southeast Asia's oil goes through the Straits of the Hormuz. So we're part of the Asian supply chain.

And, you know, Vivian [Balakrishnan], the foreign minister of Singapore called this particular energy crisis an Asian crisis and he's right. And for that purpose, we're part of Asia. So we were particularly exposed, but what we've done is work very closely with industry and we've underwritten extra fuel imports into Australia and we've avoided all rationing.

And we now have more fuel in Australia than we did on February 28th, which we're pretty pleased with. And, you know, there are plenty of people predicting we'd be rationing after Easter. We've managed to avoid it. There's still risks out there, as you know, as well as anyone, there's still plenty of risks and the global strategic reserves are being run down. But at this point, I think we're as well-placed as anyone and better than many and having gotten through this.

ML

Okay. Now you were doing fine in your answer until gotten through this because, you know, we're watching the news, there was supposed to be a deal.

CB

Absolutely, we've gotten through this, this far. There's still plenty of risks out there. I mean, we want it sorted out as the world, everyone in the world does, we want it sorted out urgently because, the longer this goes on, as you know, even if it was resolved tomorrow, there's going to be aftershocks for months.

ML

And context for the audience we should give, because this will come out in a few weeks. So by the time anybody's watching this, who knows, it could be back in hot conflict or it could be peace and love and opening the Trump plaza in Tehran.

CB

Anybody who knows how this is going to play out I think are not being honest with you.

ML

But I have gone on the record of saying, I think we could be in for months, if not years of tension and cat and mouse games. And I go back to you look at history. I'm an engineer, but I think history is vitally important. If you look at the foundation of the Iranian state, it was the hostage crisis. 440 days, which terminated in the release of, at the time it was about $10 billion, $30 billion plus was released by the US. At the end of that, they got the hostages back and it finished President Carter's presidency. I think the Iranians will be well aware of that precedent. And I think we should be in for the long haul. I might look very stupid by the time this comes out.

CB

You may well not. I mean, don't think the Iranian regime has been around since 1979, but the Iranian civilisation has been around for thousands of years and they've had to have their wits about them in a complicated geopolitical environment in the Middle East. So they are players, yes.

ML

Inventors of the modern game of chess, that should also be remembered. But I was expecting perhaps to come into your office and see almost Churchillian maps on the wall with the locations of tankers bringing diesel to Australia.

CB

I do have those. They're on the wall, but I have them. 

ML

You do have those, I'm glad to hear it because one of the questions, if it does prolong, then you say we've got more diesel, but there's jet fuel. There's a real problem. Well, essentially what's going to happen is some percentage of fuel will simply, you know, the market will just have to reduce demand to fix supply. And that means somebody is going to see demand destruction, recession, real problems in their economy. Who's it going to be? If it's not, if it's you, who’s it going to be?

CB

Well, all I can say is in terms of our situation, we actually have more of each fuel type.

ML

Including jet fuel?

CB

Yep.

ML

So Australian summer holidays will be okay. Right.

CB

We are looking good. We've got more of each fuel type, diesel, jet fuel, and petrol than we had on the 28th of February. So that's good. Each supply chain is different for us. You know, we don't get much diesel or petrol from China, but we do get a lot of jet fuel.

ML

Did that result from the, there was a deal with Singapore?

CB

Partly, it was partly that. So we had sort of a multi-pronged approach because we went off to our key trading partners and said, you know, this is a high pressure environment for all of us. Let's stick together. PMs visited Singapore, Malaysia, Brunei, for example. And that's been an important part of it. So they've said, yes, your key allies, key friends, key trading partners. Yes, there's pressure, but you know, you're very important to us. We'll keep the supply up for you, you know, as best anyone possibly can. So there's been that.

We've been diversifying as well. So for example, we currently, we usually get about 2% of our crude oil from Argentina. For the next month, it's about 25%. So, yeah, that's diversifying to countries that don't rely on the Straits of Hormuz. And, you know, there's been different examples of that. We've got petrol from the Netherlands, it's at one point, Algeria has been supplying. So just spreading the, hedging the risk across the world, which has been useful. And then there's the, as I said, that we've been underwriting extra cargoes into Australia to provide a buffer. So all three fuel types were better off. And there's different risks in different fuel types. Diesel is probably one that we've been very focused on because Australia is a diesel-based economy. 

ML

I believe the term is addicted to diesel.

CB

Well, you could say that. I'll say you've focused on that.

ML

If you were going to say I couldn't possibly comment, I was going to say, well you're the energy minister. We'll come back to, I think we need to come back to Australia's diesel addiction, to be honest. It's a domestic, an economic structure problem. Let's come back to that.

CB

Yeah, yeah. And we're a resource-based economy. The mines work on diesel. But we actually, we say we make about 20% of our fuel in Australia. We refine 20% of our fuel. That's true. But we actually refine more petrol than diesel. But we use more diesel than petrol. So that's just the way the refineries are designed and the way the market's played out.

ML

Driven past the Geelong refinery a few days ago.

CB

It wasn't on fire at the time, I hope.

ML

It was flaring, it wasn't on fire.

CB

No, no. We had a fire, which is why I didn't go to the Petersburg climate conference, because just as I was about to leave, the refinery caught on fire right in the middle of an oil crisis.

ML

The only refinery to catch on fire in the last six months, not because of a drone. 

CB

Yeah, right yes, Is that right? 

ML

OK. So you were saying about, so you've got, you've brought in the extra supplies. But I asked, in a sense, it was a two-part, well, it was a two-part question, which is, so you've got your supplies, but then who's not getting them? Because another way of glossing what you've just said is that Australia has bought up all the supplies that it needs. Argentina, that oil was going somewhere else. Those people are now, they've not got the 25% oil that you're importing.

CB

There are some countries that are embarking on, in effect, rationing around our region, compulsory public holidays, public service public holidays.

ML

Schools closing.

CB

All that sort of stuff is happening. I know the Philippines has done some of that, and some other countries have done some of that. We're particularly focused on the Pacific, making sure they're OK. So after you, I'm off to see the Prime Minister of the Solomon Islands, who's in town. Obviously, our Pacific family is very important to us, and many of them are diesel economies as well, ironically, which is something we're working on fixing. Many of them actually, much more than us, their power stations run on diesel.

ML

Because they're still, exactly, so they're still using diesel for electric power, which of course, you don't do, haven't done for a long time.

CB

Yeah, that's right. That's right. So that's important to us that they maintain fuel security, because it is the case that countries that can afford, like Australia, to go out and get fuel, are better placed than those that are not in that position.

ML

Are you financially supporting them? Because these are not, some of them are doing fine, some of them are not that wealthy.

CB

Well, we financially support many of them in many different ways.

ML

Because if there's regional instability in those countries, you're going to feel the effects. But they're also, you have very close cultural links and so on.

CB

Absolutely, a very important part of our national approach and our government's approach.

ML

So have you extended them extra credit to deal with this?

CB

Not particularly on fuel at this point, but we are broadly, obviously, we support a lot of different initiatives and different governments.

ML

Okay, so Pacific Islands, you're helping, but then there are real issues around, as you say, the Philippines, Indonesia, your closest, where you've learnt the language. Are you having difficult conversations with them about you buying up all the oil?

CB

No, I have chatted to the Indonesian minister a couple of times, and they're pretty comfortable with how they're going, yeah.

ML

Okay, and so on those maps, does it get worse? I mean, is this a new steady state, where everybody's tightened the belt a bit, there's been about 10% reduction in oil use, but somehow we're muscling through? Or does it go off a cliff, minister?

CB

No, I don't think it goes off a cliff. It might get tighter, but it doesn't go off a cliff. The idea that all the ships will arrive in Australia one day, and we'll stop arriving the next is not one that...

ML

That's the question, I guess. That's the graphic version of the question.

CB

Yeah, no, I don't think that's how it plays out at all. And we've war-gamed all sorts of options. We've had now several months to be dealing with this. And there's been all sorts of predictions made, and not being critical of people, but they haven't panned out that way because it's a complex environment. 

But we normally get 81 ships arrive in Australia a month with fuel, on average. In May, we had 92.I mean, I'll take that. I'll take that as a... In this environment, I'll take that as a very good outcome. But, you know, as strategic reserves are run down, the longer this goes on, yes, of course, it continues to get tight. But I don't see a cliff.

ML

As an energy wonk, I'm already... I'm just thinking of a... What does this do to metrics of supply and demand? Because of course, if every country says, you know, gosh this is really unstable, we need to increase our stores, you actually could... If you have one month of stock, and you then go to... You want to go to three months, that's two months of extra demand.

If everybody does the same, you've actually got not just the normal demand unmet, but you've then got this extra couple of months that you're trying to put into stocks. So it's a fascinating kind of energy economic question, right?

CB

Well, in our case, you know, we've got 48 days worth of petrol, for example, on... in the country, and 36 days worth of diesel. So we, you know, we're not talking about doubling and tripling our stocks, but we have, you know, if things get tighter, we have been building a buffer.

ML

And I know you have a very good relationship with Fatih Birol because he was down here actually just after he released the 400 million barrel release. I was in Paris a few days before he came down to Australia. I suspect you spent some time with him.

CB

We did, yes. Absolutely. And, you know, we participated in the release of the reserve at his request, which was the right thing to do. And yeah, I'm a regular interactor with Fatih. Yes.

ML

I was astonished that he came on the show and took the time, because it was literally between telephone calls to you, your Japanese counterpart, Chris Wright over in the US, and so on.

CB

No, I listened to most of your episodes. I listened to that one. And I similarly thought, he's proceeded with that, he's a wonderful man, Fatih, very generous with his time.

ML

And he called it the mother of all energy crises on my show. He's called it more measured things than other. But he has said that this is the worst energy crisis. And yet, if you look back to 2022, and maybe this is a European perspective, because that was European gas and European oil supplies that were hit, but that price spike hit Australia as well. And it was much bigger than the price spike that we're seeing today. 

CB

In gas. I mean, it was a different crisis yeah. So Fatih’s called this crisis equal to all the previous crises combined, right? So all the 70s crisis plus Ukraine, and this is worse. And, you know, that's a pretty telling description.

ML

And it hasn't been yet, right? To juxtapose what you've said essentially, what you said was it's tight, everything's tight and difficult, but it's all under control. And we've already established Australians will still be able to fly on their holidays over the summer. That doesn't sound like the worst energy crisis since the 1970s.

CB

Well, I think what Fatih's talking about is the impact on supply chains. You know, the fact that so many hundreds of millions of barrels are just sitting in the Straits of Hormuz, obviously. And in Australia, that's impacting not so much on supply but on price.

You know, we still have the- we cut our excise, our petrol tax to just take the edge off the price rise. But that's still in place, for example. So, you know, it could be that we see that crisis play out not like Ukraine, which was gas prices and in coal prices, but in oil prices and petrol prices.

ML

Yeah. So now let's switch gears to- I don't want to say business as usual, but not the crisis, although I think the crisis is having impact. And I've written about this, about I'm expecting to see- clearly, there will be a lot of moves as countries, like the moves you've just described for Australia, everybody's sort of trying to get- trying to sort out the immediate problem and get you know, get their oil, get their gas, LNG, their fertiliser, their helium. That's the short term. 

I'm very interested in the longer term impacts, which I believe will be an acceleration of a lot of countries saying, we've got to get off this stuff. That's what I think is going to happen. And then I'm interested in, first of all, if you agree, and then we can go through how that might impact the initiatives that you're pursuing here in Australia.

CB

I do agree with you. I think, you know, I've got this COP role this year. 

ML

Acronym, I caught you.

CB

And I think most of our listeners, to be fair, would know that COP is Conference of the Parties, but I do accept the principle that you don't like acronyms.

ML

So it's Conference of the Parties under the IPCC. 

CB

You just did an acronym, caught you!

ML

The Intergovernmental Panel on Climate Change, part of- under the UNFCCC, which is the United Nations Framework Convention on Climate Change. It's the climate summit, the big climate summit.

And that one, actually let's fill that in before coming back, just because- so that the audience understands that that's happening in Türkiye, but it is joint, correct? So explain how that all works.

CB

Well, it came out of necessity, because Türkiye and Australia both bid. And it's not how you would design a system to choose a COP host. But basically, the system is you have to get support from the constituency group. Türkiye and Australia, obviously, in Western Europe, where else would we be in our constituency groups? Australia had overwhelming support of that constituency group to host COP 31, but Türkiye was very strong in their bid and didn't want to yield, which we respected. In the end, it was either do a deal or it goes to bond with in effect, no COP president.

ML

It came down to the scene, like I can't remember what the film is, where they threatened to veto you, and you had to threaten to veto them, and then it would have gone to bond.

CB

It would have gone to bond. And I didn't think that was a good outcome for the world.

ML

Right.

CB

With multilateralism under attack and everything. So we did a deal. And within that necessity, we didn't do it out of choice, but within that necessity, I think we've come up with quite a good innovative model in that Türkiye will be the host, the COP president,and run the action agenda, and I will chair the negotiations.

ML

And we will need to come back to what the action agenda- actually, why don't we - so the action agenda is all the stuff around the negotiations, all the other initiatives, everything else.

CB

Yeah, that's right. The pledges and the investment deals. And we're working closely with Türkiye.

ML

And so they are leading on that.

CB

They're leading on that. We're leading on the negotiations and the actual outcomes of the COP.

ML

So you get the document with the square brackets and the late nights and the clock that stops at one minute to midnight so that you can still spend the entire last weekend. 

CB

Correct. 

ML

And you get the gavel. Do you get the gavel?

CB

We jointly hold the gavel. We'll do that together. But, you know, we will basically be steering all the negotiations.

ML

If there is a gavel at the end of all of this, we're just assuming that there will be some sort of gavel doing something, OK.

CB

As I said, you know, this sort of arose out of necessity, but I do think we've come up with a model which might work in the longer term. Like, I think it'll work this year, Australia and Türkiye. We're actually working- obviously, we had hard-fought negotiations in Belem, you know, for three days.

But we've come together very, very well, working as a good team. And I think it's potentially an innovative model because we're two different countries, different approaches. But, you know, we'll be saying to the world, well, Australia and Türkiye have sorted out our issues, please come to Türkiye in the same spirit. And also in the negotiations, you know, frankly, there are countries that will care what I think and, you know, bend and be flexible because I ask. And there'll be other countries that aren't too concerned about what Australia thinks, but do care what Türkiye thinks. So we can tag team those discussions.

ML

I do think it's interesting because it kind of breaks a bit of a pattern where the COP goes over to Baku and everybody says, oh, it's all going to be about oil, whatever, because Baku, obviously a big oil producing location. And then it goes to Brazil and everyone says, oh, it's all going to be about rainforests. And it almost becomes a sort of special interest thing. And it attracts only, though, people interested in that. Whereas if you've got the diversity of countries, you break that pattern and you go back to perhaps clicking up a level. That's my hope, in a sense.

CB

Well, I share your hope. And I think that may well be what we're able to achieve.

ML

There's all these things you're doing here, which we need to go into. But you're not responsible for them because those could feed into the action agenda. But the action agenda is Türkiye's responsibility.

CB

Oh, yeah. But I mean, the action agenda- I mean, I think what we're doing here will feed in the negotiations. And, you know, we should get to it because there's a lot to talk about. But also, Türkiye is running the action agenda. But also, we had plans for the action agenda if we were going to host in Adelaide, which we fed into Türkiye. And they're working with us. 

So just as I will consult Murat Karum about the negotiations, he consults me about the action agenda. So I think I wouldn't get too hung up on that particular element. We are feeding that in. And we're always active participants in the action agenda, even when we're not- 

ML

So you haven't just had six cardboard boxes full of action agenda plans that you had and just flown them over in the diplomatic bag?

CB

No, I mean, we've spoken to them and said, this is what we were thinking of. 

ML

So you sort of have done that. 

CB

Yeah, do with this what you will, and you know, to their credit, they've said, oh,a lot of that looks interesting and they're working with us.

ML

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ML

So let's come down to what are the initiatives? What are you doing? What are you doing in the rest of your time when you're not worrying about either the crisis or preparations for COP? And there's a lot going on. And I'm lucky because I spent two weeks in Australia moving around and I've talked to an awful lot of people. So I know some of what is going on. Where would you start? What is the most significant initiative that you're working on?

CB

So I think Michael, what Australia, you know, we’re no poster child as a country, you know, we've made plenty of mistakes. But one thing I think we are getting very much right and that we can share our learnings with the world is, in our view the road to decarbonisation goes through households. So we are really, I think, scoring runs to use a cricketing term, when it comes to households.

So as you know, we lead the world in rooftop solar. So 35% of Australian residences have solar panels on their roof. And that's 4.3 million houses. We have more solar power than coal power, more rooftop solar power than coal power in Australia. That's played an important role. But what we're now doing is building on that.

And we have a cheaper home battery policy, which provides a rebate to Australian households. Because when we came to office, you know, one in three houses had solar panels, one in 60 had a battery. So there's a lot of energy being wasted in the middle of the day. Energy prices are mainly set at night when coal and gas kicks in, which is much more expensive. We're running coal-fired power stations all day, not using the power during the day, you know, wasting emissions. So we needed to...

ML

Because they're inflexible. 

CB

Yeah. They're getting more flexible, but they're still pretty inflexible. So we needed to really up that batteries approach. So we, on the 1st of July last year, our policy came in for cheaper home batteries. So 30% rebate in effect for everyone who takes a cheaper home battery. As of today, we're at 424,000 cheaper home batteries that have been installed in Australia. 

ML

424,000, OK.

CB

Since 1 July, so not yet a year.

ML

I'm just trying to do some percentages in my head.

CB

Yeah. So we had roughly a bit over 100,000 home batteries before we started. And we've added 400,000 in the last year.

ML

OK. Because somebody else used a figure of 324. So that would be the additional over the 100.

CB

No, no. So we've added 424,000.

ML

OK. So they were probably just out of date.

CB

Yeah. Because the figures moved. We're putting in about 2,000 on a week.

ML

Number of households, about 11 million, something like that? Yeah.

CB

I guess that's right. Yeah.

ML

So you're now at about 5% or 6% of homes that have got batteries.

CB

Yeah. So our target is to do 2 million houses by 2030. And that's more than 12 gigawatt hours worth of storage we've added.

ML

Can I ask a technical question? You said the rebate, 30% rebate, does that go to the installer? Does that go to the homeowner? Because I'm fascinated by the fact that your solar roofs, it's half the cost to get solar here on your roof as it is in the US.

CB

There's a number of reasons for that.

ML

Whatever magic that is, share with the world, and are you doing the same with batteries?

CB

Yes In effect, we are, it's the same scheme. We call it the Small Scale Renewable Energy Scheme, SRES, we call it.

That's an acronym. But I said the full title first.

ML

You're allowed to use the acronym as long as you explain what it is.

CB

Yes, Small Scale Renewable Energy Scheme. In effect, so your question, does it go to the installer or the household? It goes to the household via the installer. So you bring up your local energy, your local solar installer or your energy. You can use the big energy company or you can use a local company. It's up to you. It's all very easy. That's one of the reasons why I think we do it better in the United States, because we make it easy for people.

ML

That's why I asked the question. Because I think making it easy, user interface really, really matters.

CB

There's no planning approval required. I said to the California Energy Commissioner, there'd be a revolt, there'd be marches in the street if we required council approval to put solar panels on your roof. It's your roof. You do what you like with it. So the only constraint is supply chain. You might have to wait a month before they can actually come out and do you. 

But you can ring up today, you can get a quote and you can accept it. 

That quote that you get from the installer for both solar panels and battery will include in it the rebate. So they'll give you a quote, might say $12,000 minus government rebate, etc. And then you get a final price. And then the money goes to the installer. But the installer has already discounted the battery when they're quoting you.

ML

So when I next go over and talk about this with a guest in the US, I'm going to ask how it works there. Because I think they have to pay the full amount. And then they've got their federal taxes and their state taxes when they get money back. Too complicated.

CB

It's too complicated.

ML

So making it easy matters.

CB

Absolutely. It's just a seamless process. You ring your installer, you can get three quotes. We make it easy, you can get one quote, you can get three quotes but the rebates are all factored in. So as I said, we put a bit over 12 gigawatt hours in the last year, which is globally significant when it comes to storage.

ML

I just want a final question on that. So the technical bit of how this works. If you produce lots of solar, obviously, if you have a battery, you're going to use more of it yourself.

But if you're exporting solar, you get a feed-in tariff, some modest feed-in tariff. Does the distribution, the DNSP, the Distribution Network Service Provider, in other words, the distribution grid, do they have to accept your electricity, whether they want it or not, and pay you the feed-in tariff, whether they need that electricity? And what happens if they just say, I'm sorry, we just don't have the capacity? We just can't take any more from these rooftops?

CB

By and large, they do have to accept it. We do have curtailment for extreme circumstances.

ML

Residential curtailment.

CB

Yeah, we do have that through the state system. We don't like doing it. 

ML

Homeowners must not like you doing it.

CB

No, and it's only done really in extremis if it becomes a safety issue in the grid. So it can be done. It's done rarely. By and large, they take it. So that's where grid-scale batteries and community batteries are useful, because they can help absorb that, and we're building a lot of those as well. We do have feed-in tariffs. A lot of Australians sort of complain that they're too low, because they used to be much higher. When solar was starting, they were high. Now there's so much solar power in the middle of the day that they're quite low.

So one thing we've done to manage that is introduce, it comes in on 1st July, solar share, we call it. That's three hours of free power in the middle of the day. You might have heard that on your travels. That's coming in. So that will help absorb a lot of that. So that's really an incentive to people. With modern, smart technologies, you can schedule your dishwasher to run at 12 o'clock when power is free.

ML

That's free for everybody, whether you've got solar or not.

CB

Yes, if you take up the offer. So we require the energy companies to provide it to you as an offer, up to you whether you take it up or not.

ML

OK. Because that's interesting, because 65% of your homes don't have solar. You could flip your good statistic into what sounds like a bad statistic. I'm good at doing that. So they can benefit from the three hours of free?

CB

Yeah, they can from the 1st of July. And I mean, I would also argue they benefit from generally a reduction in prices that solar power brings in, particularly with batteries moving a lot more of that load to the evening and saving that excess power we have in the middle of the day. I mean, the recent EMBA report highlighted us in Chile as moving more power from the middle of the day to the night than any other countries in the world, which I was very pleased to see reflected.

ML

So I did an episode with Marc England, Ausgrid, the grid in the Sydney area and up to the Hunter Valley, lots of rural agriculture and then down into Sydney. He didn't complain as much as I, when I listen to you, in most countries, most DNSPs, distribution network system provider, the grid, the distribution grids, they would go crazy about this stuff and push back and try and torpedo it because you're taking demand away from them by giving people lots of solar. You're taking demand away from them.

CB

You mean generally on the solar and the batteries?

ML

Yeah, and then by giving people batteries, there's even less demand. And they get this very peaky demand from households. When everything else fails, they get huge amounts of demand and they're expected to buy this stuff they don't need. And you'd get enormous pushback from the distribution grids in most countries I visit.

CB

Particularly, I get Americans ask me, how do your energy companies and distribute, how do they let you do this to them? And don't you get massive complaints? And I say, no, they get with the programme. So basically, as I said, if you're a Sydney sider, for example, you can ring up your local Sydney solar company, Penrith Solar, whatever it is. Or you can ring your big energy provider, Origin Energy, and say, can you come around and give me a quote for solar panels? So they get involved. Origin Energy, for example, does a battery package. So they can, if you're an Origin Energy customer, you can choose to go with your energy company and they get a piece of the action.

ML

I remember when they launched that. That was when Grant King was running years and years ago, 2014, 2015, something like that.

CB

So to their credit, I guess, they worked out, this is where the country is going, we can either try and resist it, or we can be involved in it, and they were involved in it.

ML

See, that's fascinating, because in a sense, I'm looking for kind of Australian technologies to share with the world. And obviously, I don't mean, in this case, hard technologies. I mean, how did you get your rooftops done? How are you getting batteries done? And how are you getting your distribution grid operators not to just torpedo things?

CB

Well, I mean, I guess there's two answers to that. One, they don't have a choice. And two, back to their credit, they've got with the programme and they're participating and everyone's in the action. You get into, I don't know if you've driven past Bunnings, there are big hardware warehouses everywhere. The big Australian sort of way of life is on Saturday, you get out of Bunnings and buy all your hardware needs. It's a massive thing. But you can now get solar panels and a battery at Bunnings.

ML

Don't you put your tools, when you bought them at Bunnings, you put them on a rack behind you, and then you do your television interviews?

CB

Well, some do that. I don't do that. Some politicians do that to show that they're on the tools.

ML

Unused tools from Bunnings. Correct.

CB

That's not something I do. But I have seen it done. That's right.

ML

OK. So what we've got, so those are some of the areas, business models, not technology, but business models where Australia's world leading.

CB

I do think that's a story we have to tell, that batteries and households.

ML

It is. It is. But then you've got some other areas where you're laggards. And EVs, going into the crisis, 10% EV share, which is low. Globally, it's one in four cars. It's 25%. Now, since the crisis, that's probably gone up to 30%. And you've gone up to, I think, 16% in April or something like that.

CB

Latest figures are a little bit higher than that. But I don't dispute your fundamental argument.

ML

You're not in the peloton. You're one of those riders who's not midfield. You're actually not the worst, but you're not doing well. 

CB

Well, I agree with all that. And we have worked hard at it. When we came to office in 2022, EV sales were 1%. So then-  

ML

1% in 2022? This stuff is going so fast.

CB

Yes. So I'm relatively pleased that we've caught up to that 10%. And then now higher, I think now closer to 20%. We don't yet have May's figures in. But Tesla and Polestar just reported last night and this morning, they've doubled. So I think that is happening.

Obviously, the main thing is the petrol crisis driving that, but not exclusively. I think a couple of other things just quickly are happening. Two, it's related to the battery story. If you've got solar panels and a battery now, you think, well, maybe our next choice should be an EV. Because we have this battery that can power the EV. So we don't have to pay for energy at night. We can use it off our battery. So our EV, in effect, becomes very cheap or free. 

And then we have had a couple of problems. One of the reasons why we're so far behind, Michael, is that we and Russia were the only two countries in the world without emission standards, vehicle emission standards. Governments of various persuasions had tried. It had failed.

We did it. So we brought in emission standards in 2023. Very controversial vehicle emission standards.

ML

Vehicle mileage standards or emission standards?

CB

Emission standards. So in a fleet average, you've got to meet these emission standards. So we've now got a much greater choice of EVs. And we also have an EV tax discount through our novated lease system, which can be quite beneficial for people. And people have been taking it up at a rapid rate. 

So all those things combined have seen the EV take up substantially increase. We just had our annual emissions figures out for 2025. Transport down 0.6%, which is not much. But I'll take it because it's the first substantive reduction ever outside of COVID, which is largely driven by EVs.

ML

And do you have a target for how many EVs? Are you on one of your Churchillian maps? That is not in this room, but somewhere probably on screen. Do you have a target for EV penetration?

CB

No, we don't. Because we see it as a matter of choice for Australians. We want to give Australian motorists and consumers the choice of buying more EVs, and they are. So we don't have an artificial sort of government target. What we do have is policies to facilitate EV take up.

ML

You say it's choice and we don't have targets. But you do have a target. You have a 2050 you're net zero. And then you've got renewable energy targets across. You've got all sorts of targets.

CB

But we don't have a particular EV target.

ML

You don't have a particular EV target. OK. I'm trying to do my cycling analogy. Because the breakaway group, obviously, is Norway, which is now at something like 95% or 97%. That's crazy stuff. But there is a large group now, and China is at something like it's over 50%. It must be approaching 60% now.

CB

Including trucks now.

ML

And 25% of trucks. I have an interest in trucks because I'm building a truck charging business in Europe called PragmaCharge, building hubs, the charging hubs.

CB

We've got new energy here doing that.

ML

Yeah. You've got a few people. And I've met them. I think they're a little bit behind us. We're actually going to open a big charging hub. The biggest in Europe I think, very shortly in Valencia. So trucks, I think, are going to be next out of the gate in a lot of places. And I suppose, are you confident that Australia maybe won't be up with Norway, but at least ought to be in that sort of, let's call it the 40% to 60% group, fairly soon?

CB

Yeah, I am.

ML

And is your grid ready for that? And your infrastructure? Because we need to talk about big batteries, grid, wind, which is very troubled at the moment, I'm going to say and so on.

CB

Yeah. Well, just quickly. Yeah, I am confident. I think Australians have crossed the Rubicon in many senses. Yes, there's a fuel crisis on now but I think Australians intuitively know these crises are going to get more common, not less common, potentially worse, not better. And so having an EV is a very sensible economic choice. So I think we know there's tipping points and critical mass and I think we're approaching that now we're not just going through a temporary blip in EV sales. It'll just get bigger and better.

And again, vehicle efficiency standards we brought in just means, there were no vehicles available, no EVs when we came to office under $40,000. Now there's 10. 

ML

Australian dollars?

CB

Australian dollars. 

ML

So that's $25,000 US or something like that.

CB

Now there's 10 models available for younger people buying their first car, etc. There's 10 models, which is a good thing. So I think we're locking in that progress. But let's talk about the grid and wind and vehicle to grid charging and everything else.

ML

I'll give you a short lap of honour on big batteries. But we've then got to talk about the difficult, we've got to talk about the very unpopular stuff, which we'll get onto.

CB

Well, big batteries are making good progress as well. I said home batteries, big batteries as being equally important. We are third in the world for big battery investment, China, US, Australia.

ML

In absolute terms, which is extraordinary because your population is so much more.

CB

10% of the US. So per capita, it's us. So you add that to what we're doing. As I said, on home batteries, we've added 12 gigawatt hours. In 2025, 30 gigawatt hours globally was added of home battery capacity, and since 1 July last year, we've added 12. So slightly apples and oranges comparison. But by the time we get to the end of the calendar year, you could argue that we might be half of the world's home battery capacity additions through our programme.

ML

And the big battery, well, the combination of all those batteries, it's interesting because you've got a hole in the middle, though, because you've got the home batteries and you've got the big batteries. What you don't have, and by the way, also on solar and observation, and you can see this when you fly in, you've got all the homes, I don't want to say it starts to look like Lagos, where everybody's put solar on the roof because that's the way they charge their phone and keep the power on when there's regular power cuts. But then you look at your box retailers, you look at your schools, you look at your warehouses, you look at your sports centres.

CB

Schools is a bit different. I'll pick up on schools because we do have a lot of solar panels and batteries.

ML

You're not in the front group on the community level, let's call it, or the C&I, commercial, industrial, and community.

CB

So we do have community batteries. They're not as big and important in the system as home and grid, but we do have them. We've got a government programme to support them, 400 across the country, rolled out over a period of years.

And they're very good for community support and esprit de corps, and we're all in this together. And they also play a complementary role to the big and the small. C&I, I mean, we do have solar panels on warehouse roofs, but I do accept your fundamental point.

ML

I want to come back to just, I want to anchor this, by the way. You said the road to decarbonisation goes through households, right? And I'm sort of trying to, maybe we could try and track, because, okay, when you go from the household, then you get to the community, you're going to say, oh, we've got lots of programmes. You're behind, but you're going to say that you're fixing it, I suspect. Is that a good characterisation?

CB

Again, I mean, I think how I would characterise it is where we've learnt things and have some lessons to share is households. You know, where we can help friends and colleagues internationally, you know, with the greatest respect with whats working, we think its households.

ML

World class, export that knowledge, I call it technology business model  knowledge, but export that. Heavy industry, you know. 

CB

And then, exactly, because there's the home, then there's the community, but the heavy industry and the grid and the big chunks. It's hard here, right?  Well, I see heavy industry. I mean, I think probably the easier part is putting solar panels on the roof of warehouses. That's probably the easy part. Then you've got high heat, hard to abate, you know, cement making, which is important in Australia, plastics, fertiliser, you know, brickworks, even pet food. You know, I went out with the Prime Minister to a big pet food factory in Albury, which is on the border of two of our states, New South Wales and Victoria, where we're helping them get off gas.

ML

Pet food's easy because it's just big industrial heat pumps. There's nothing they do.

CB

Well, they're doing solar thermal at this particular... 

ML

What temperature do they need? 

CB

Oh, I'd have to check that.

ML

I'd be very surprised if they need... Because as soon as it's under 200 degrees, then it feels to me, as a thermo geek, that the heat pump should be the solution.

CB

Well, they're doing solar thermal, and we're helping them do that as a...

ML

It could be. It's not impossible. II don't want lots of people really upset because Liebreich said it was a bad idea.

CB

No, no. Well, they did all their due diligence. It's Mars, which is a big global company, and they said, we think we'd like to try solar thermal to get us to the high heat, and we're helping them do that.

ML

But then let's do the grid, wind and the grid, because that is of great interest to industry, and you do have a lot of pushback from industry because of your energy prices. But let's talk about the grid, because you've got pushback there too. I want to talk about the resistance to your transmission build out potentially being the negating item in all of this.

CB

So I mean, I would... If you want to talk about community views, so yes, we've got work to do on wind. We are making some progress on wind, but it is a challenge. We're going absolute gangbusters on not only household solar, but utility solar and batteries. That is just going absolute pace, but wind is going slower. And transmission, if you want to talk about community support, I would say transmission is probably the hardest part in community support, but we are making progress.So we're about to energise Project Energy Connect, PEC, which is a new link between South Australia and New South Wales. That's about to be turned on. That's thousands of kilometres. Hume Link, which connects our two most popular states, New South Wales and Victoria via Snully, is under construction. The towers are going up And for example, that was controversial. It's a beautiful part of Australia, green rolling hills, undulating rich land. So that was controversial, but TransGrid, the company building that, ended up with voluntary consensual landholder agreements from 99% of the land.

ML

Compulsory purchase for just 1%?

CB

Yeah. So again, you can work these issues through. And when I'm out in the regions, which I spend a lot of time in, our power regions, it's much more nuanced and mixed. People get it. There's more droughts, climate change is real, farm productivity is falling. We need to diversify our income. If we can do that with solar farms and wind farms, as well as, you can run a solar farm with sheep. You can run a wind farm with cattle. You can't run solar and cattle together because the cows sit on the solar panels, but you can run wind farms with cattle. The largest solar farm in Australia is a very big sheep farm. The sheep run around and save on the mowing costs because they eat all the grass and the sheep in the heat get under the solar panels. So there is actually quite a lot of support there. I'm not saying it's unanimous, but there's quite a lot of support there for this transition.

ML

But it's very much not unanimous because energy costs and also pylons and the resistance to them, that is one of the arguments, one of the reasons being cited for the growth of popularity of One Nation, of the, I don't know what to call it, a nativist. 

CB

Populist Right. 

ML

The populist right. They're within the political process. It's not AFD in Germany, but it's a populist right, which is sucking support away from, at the moment, mainly the liberals, but it's also sucking support away from themselves.

CB

They're undergoing a surge in support. And what you're doing is one of the reasons for the surge. The whole, I mean, there's a right-wing popular surge in many countries in the world at the moment. So I don't think AFD is not campaigning on transmission towers in Australia and-

ML

No, no, no, no but One Nation is. 

CB

Yes, but One Nation is. 

ML

So are you causing that surge is, I guess, the question.

CB

No, I mean, look, I don't deny that the transition is contested in regional Australia. I don't deny the Populist Right is campaigning on it. But, you know, I don't want to be too political on your podcast because it's an excellent climate change and energy podcast, not a politics podcast. But, you know, given we're talking about politics right now, our main right-wing party, the liberals, dropped net zero. They've gone, you know, they've gone pretty populist right. They've dropped net zero. They're anti-renewables. They just had a by-election in regional New South Wales, which they lost with a 30% swing. So if the answer is moving further to the right, that's not working for them.

And again, you know, I spent a lot of time in the regions and it's much more nuanced. Yes, there's loud voices in politics, anti the transition, there are. Do they speak for the majority of people in their communities? I don't believe they do. Do they speak for a chunk? Yes and I think it's much more nuanced. And I go into local, I meet with mayors and they say, well, we're for this transition. We want to diversify. We think agriculture will always be our bedrock, but it's not enough. We want this other income coming in. And the transition is the best game in town. That's what I hear in regional Queensland, in regional New South Wales. It's not to say that we haven't had work to do to get more community benefit, better consultation, et cetera, et cetera. We have been doing that. We'll keep doing that.

ML

You say it's not a politics podcast. It's not. But the politics is absolutely bound up in this. 

CB

And I'm a politician. 

ML

And you're a politician. And also, it is known that I'm still marginally, I'm still just about hanging on.

CB

Yeah, I heard you say that in a podcast.

ML

I’m a card holding member of the Conservative Party, which is doing exactly what the Liberals are doing nationally here, which is chasing reform and saying that they would, that they're resiling or they don't want to do net zero 2050 and they want to repeal the Climate Change Act. And so I am essentially politically homeless. But so that sounds very, very similar. What they are doing is making net zero the campaign issue.

CB

They are. Well, it's not the only one.

ML

And Ed Miliband, Energy Minister, is the lightning rod. Are you the lightning rod in the same way?

CB

Yes, I am. And often climate ministers are. We compare notes and go, you're the most controversial person in your cabinet well yes he is probably. But look, I think also the other point, Michael, is that it's not just about the communities. It's also about the broader energy transition. I mean, we had the energy annual price update last week. Energy prices down in some cases modestly, in some cases significantly.

ML

This was the Australian Energy Regulator, the AER. Australia is the worst country for acronyms.

CB

And they brought down the default market offer, the DMO.

ML

The default market, the DMO. OK. That was up to 11% reduction and that's largely driven by batteries, right?

CB

Yeah. 11% for households, 20% for small businesses in rural New South Wales. That's significant. 

ML

That's got to help. 

CB

That's got to help. And far from getting ahead of ourselves and a lot of challenges, but if we keep those sorts of results up and we get more batteries in over the next 12 months, and then the year after that as well, and then we're going to an election, we are able to point to the fact that we know there were challenges along the way, but we always said renewables are the cheapest form of energy. And here's the dividend, people. Here's the dividend, guys. Energy bills coming down significantly.

And I think that fundamentally changes the conversation of politics. And I'll just finish on this point, Michael. We had an election last year, which was very much a climate and energy election. The then leader of the opposition petted up and said he wanted a referendum on climate and energy. He wanted this election to be a referendum on climate and energy. He went with a nuclear policy and anti-renewables. We ended up with 94 seats in 150 parliament. So we'll take that result. 

And again, offshore wind, we may or may not talk about, but it was controversial. The Liberals said, well, we're going to win all these seats where Bowen's trying to put offshore wind because it's so toxically unpopular. Well, there was a swing to the Labor Party in every single one of those seats. So there were big rallies and protests and pictures of me, and then they turned up quietly on our Saturday election and voted Labor more than they did three years earlier. So the quiet majority is supportive of the transition.

ML

I would love to ask if that's a platform for a leadership campaign. But I won't go there, because that would be too political, even for me. 

CB

Well, it's not.

ML

Offshore wind, when they said it was toxically unpopular, my worry is that it's actually going to be toxically expensive.

CB

Yeah, look, it's challenged. It's longer and slower and more expensive than we would like. But it does also have, I don't want to sort of debate about the economics of it with you, but it also has other advantages in that it's very windy off Australia's coast. It's windy at night. It's jobs rich.

ML

But it could be, I'm going to guess, that the bids are going to come in at about 200 Australian.

CB

Victoria's running an auction.

ML

I did an episode with Lily D'Ambrosio. Now, you have got this advantage. You don't know what we talked about but what I asked her was, is there a price at which you would simply say, we cancel that bit of the plan? Or do you have to take the best bids at whatever price they come in? Because then that seems like being hostage to fortune.

CB

Well, she's running an auction. So I won't comment on her auction. It's a very important part. Every state's got a different approach to offshore wind. Victoria's by far the most forward leaning. We also have proposals in New South Wales and Western Australia where the governments are supportive, but nowhere near as forward leaning as Victoria.

And that's just a reality. That's one of the benefits, I guess, of a federation, that states can, within a national framework, and I work very closely with my state colleagues, and we're by and large heading in the same direction, different perspectives on some things, but heading in the same direction. That's one of the advantages of federation, that states can do those sorts of things.

ML

Onshore wind. So offshore, I think you're going to find is expensive. We move on to onshore wind. Paul Simshauser, I did an episode also with him. He used to run the grid up in Queensland.

CB

Very well credentialed.

ML

Very well credentialed professor, incredibly knowledgeable, now running Iberdrola down here in Australia. He talked and has got data on wind costs. So wind used to cost back in 2019, not that long ago.

CB

The bell's ringing. Parliament's about to sit. Yes.

ML

That must be a... That's five to...

CB

Five to nine. We'll keep going. For our listeners, the bell's ringing. The House of Representatives of the Senate of Australia are just being convened.

ML

We are truly here in the seat of power. Power in both senses. Wind used to be, in 2019, AU$48 per megawatt hour, which makes it cheaper than coal, cheaper than anything. But it's now AU$110 per megawatt hour. And at that price, all of the superpower, and we can compete for basic chemical  and sustainable aviation fuel and ammonia, and all those things, you can't do any of that. Because solar will get you only so far, because it's intermittent. By the time you add batteries to firm it to run any sort of industrial process, that becomes expensive. And then the wind at $110 is way too expensive. So what's your plan to get inflation in your wind, and by the way, also in your grid, under control?

CB

So I mean, I fundamentally agree with your analysis. I think I saw you say at the National Press Club, you say that Australia needs wind. The question is about exactly how much wind we need versus solar hybrid batteries. You know, time will tell. We unquestionably need some wind to complement that. It has been challenged. We've had four wind farms reach financial, final investment decision in the last six months, which is, you know, four wind farms doesn't sound a lot, and it isn't a lot in one sense, but it's also a fair number of gigawatts. We just did, our way of supporting wind is through the Capacity Investment Scheme, the CIS, which is a contract for difference type auction. We just did a result a couple of weeks ago, wind featured in that, solar hybrid featured prominently, but some wind featured.

Yanco Delta, probably most spectacularly, which is the Origin Energy big wind farm, getting up close to two gigawatts. So, you know, we're supporting it through that. Again, part of the problem is with wholesale prices falling dramatically, people look at the returns and go, well, actually, I can't make that add up. So it's sort of, in some senses, victims of our own situation.

ML

But you have some of the states doing contracts for difference type approaches.

CB

Yeah, so New South Wales does that primarily through their scheme, which is like our Capacity Investment Scheme. But we are also doing it through the Capacity Investment Scheme. It's supported a lot of wind. And the good news about last week's auction is it's based on the economics of today. So they're putting in bids based on, you know, very recent market data and winning through the Capacity Investment Scheme. So I'm hopeful that Origin will be announcing final investment decision on Yanko Delta quite soon, for example, supported by the Capacity Investment Scheme to get on with the job.

ML

That doesn't directly answer the question about inflation. But I'm not sure there is an answer. If I'm completely honest, I'm almost going to give you a bye just in the interest of time with the bell going in the background. Does that go for five minutes?

CB

That's for five minutes. And if there's a vote, which I'll have to attend, it'll ring again for four minutes.

ML

Well, I hope it's not too distracting for the audience. But you're no longer in an era, I think we have to accept, you're no longer in an era, historically, Australia burning lignite, burning brown coal, had very low energy prices, among the lowest electricity prices among the lowest in the world. And your industry that was built, that was why, that's what drove it. There is no model like that available. I mean, none of what we've talked about will ever give you-

CB

I know you're not suggesting this.But even if we built new brown coal-fired power stations, or black coal-fired power stations, they're not going to do that. And one of the challenges we're facing is coal-fired power, we still have it, it's leaving gradually, is that it's increasingly unreliable. They're breaking down all the time and that's leading to price spikes at night in particular, which is where, again, batteries are playing a very useful role to counteract some of that. But sure, I mean, the energy market is changing dramatically. But one of the reasons we have so many acronyms in Australia is we have a very well-developed system of good operators.

I think the Australian Energy Market Operator, EMO, is world class. They write the Integrated Systems Plan, the ISP, which is a world-class document. They do gen cost, generation costs, every two years, which assesses the cost of every type of generation in Australia.

ML

Fabulous black box model that nobody really understands, but spits out answers. And there is a transparency issue, by the way. It's interesting, talking to Lily D'Ambrosio, as she was talking about the modelling for when the three big coal plants close there, Yallourn, Loy Yang A and B. The modelling's all been done, but she won't release it. And that's a problem, because a lot of people have to plan for how reliable that grid will be when those things are closed. And I think there's a-

CB

Well, what I would say to that, without coming on the specifics of what any state's doing- 

ML

There's a lot of reliance on gen cost and EMO throughout the whole country. That's not a Victoria point.

CB

No. But the Integrated System Plan, I think, stands up to scrutiny. I mean, I've had ministers around the world coming and looking at it, and studying it and learning from it, because it's a roadmap to say, OK, this is what we see being built in, and this is how we see the system.

ML

And what does it say about how you keep the lights on? You've got lots of solar and batteries. OK, I get it. But then there will come times, it doesn't matter how much of that you build, unless it's insane amounts, when those batteries are empty, you may or may not have enough wind. Even if you do, there will be times when you need some sort of- there might be 3%, 5% of the time.

CB

Yeah, and that's where gas peakers come in. 

ML

But you've got to build them. 

CB

Well, we do have several. We've got them running. And they're not- well, they're there. They're not turned on very often, so we just finished one, Curricurri, Calongra. Again, most of our international listeners, this will go over their heads. But we have them and gas will play a role. The thing I like about gas in the power system, I see myself as very pragmatic, centre ground, down the middle on gas. 

ML

Pragmatic, you know, is my keyword.

CB

And I'm a supporter of your pragmatic reset. I agree with most of it. And that is about having gas or- 

ML

Perhaps in Asia, by the way, you might have coal playing that pragmatic last few percent role, because they've got it and it's resilient.

CB

The benefit of gas in our context, and I don't tell other countries how to do it, but in our context, it's very flexible. You know, a gas-fired power station is zero emissions when it's turned off. And the new ones, you can turn on and off at two minutes' notice, which is a very useful support for a renewable grid.

ML

If the investors are happy, because they have to go along with that. They have to say, well, we're going to put our money in this. We're going to put CapEx, but also OpEx. They've got to keep maintaining it. And it sits there only being used when nothing else is available. So they need to be paid somehow.

CB

Well, the benefit for them, they can bid into the state scheme, the New South Wales scheme. They've never won an auction, because they can't compete with it. 

MB

So they'll just shut those plants then?

CB

Well, what they do is they keep them. And the benefit for them, frankly, for them, is when they are turned on in those rare circumstances, the prices are very high by definition.

ML

I would absolutely love to go into the energy-only market. This is where I'm headed, you know. Or the capacity markets, or some other mechanism to keep those plants because I believe that that is the direction of travel. The pragmatic climate reset means you've got to figure out how to do that pragmatically.

CB

But no one, Michael, has said to me, oh, we're going to close this gas-fired power station, because the economics don't work anymore

ML

Not yet.

CB

I've been minister for four years. No one's come to me with that. You do have, you know, we just finished a new one, I do see plans for more. But again, I think that that pragmatic part of supporting the renewables and coming in on rare occasions, there might be times when they use more. But as I said, while companies and technologists are doing good work to make coal more flexible, it's still not very flexible compared to gas.

ML

Correct. Now, I guess, in summary, if I try to come up a little, I think household's great and you've got plans to kind of grow that out through the communities. You've talked about a lot of things that the kind of grid and wind and the bit that industry would be most concerned about. It's almost you've done the easy bits.

CB

Well, it hasn't felt easy at every turn.

ML

It hasn't felt easy. But let me tell you, I think it might feel a lot harder. But also, electricity prices already, they're coming down, but they're pretty damn high. And I suppose the final question is, how do you answer the criticism that right now, given the economic situation, given the crisis, given the fact that the world might go in, if this situation in the Strait of Hormuz continues, I don't see how the world avoids a recession because it has to shrink so much of its activity just to meet the amount of available oil and gas that there is in the world. How do you deal with criticism that you're going to go and jet off to Türkiye to talk about a whole bunch of stuff that's probably going to drive costs up, at least before they drive them down? How do you respond?

CB

Well, I mean, the opposition already says that it doesn't matter what I do. The opposition criticises. I go to Brisbane to chair a meeting of Pacific ministers. They went berserk about that. 

ML

But I'm not the opposition.

CB

I understand. I think I would say I don't accept renewables put up a pressure on prices. They ultimately put down pressure on prices. They are more sovereign, if you've got them, they're more sovereign. The sun has to travel 150 million kilometres to the earth. It doesn't have to travel the 150 kilometres of the Strait of Hormuz.

ML

A quotation from Bill McKibben, who was on Cleaning Up a few years back.

CB

But one I have taken out for lots of spins, because it's true. And particularly in Australia's context, I mean, we can harness the sun here, particularly in the transport decarbonisation context. Australia playing a bigger role internationally is very helpful for these discussions. Any climate and energy minister worth his salt will spend time interacting with international colleagues. The difference is for Australia this year, we have more impact because we are chairing the COP negotiations. 

And that increases our ability to talk to international friends about the current situation. And as I was finishing where we started, no minister around the world is saying to me, oh, you know what this Strait of Hormuz crisis is teaching us? We need more reliance on fossil fuels. That is not a conversation that's being held anywhere.

ML

They don't say they need more reliance on it. But I bet you a lot of them are saying we need more of it.

CB

To get through a short term crisis, but it's not the long term solution.

ML

The way I put it in the national press club yesterday, I said, we should not forget this is a fossil crisis. And it does not have a fossil solution. 

CB

I agree with you.

ML

Thank you so much. I will see you in Antalya. I will be there for Cleaning Up. We'll be hosting something on behalf of our leadership circle. I don't know how long I'll be there. You probably will be there longer than me but maybe we'll meet in Türkiye in the end of November, beginning of December time.

CB

I'd love to. As I said, I'm an admirer of your work. I'm a listener religiously to the podcast. I'm sure we all have a list of podcasts that come up on our feed that we listen to, you're one of them. And thanks for what you're doing to help the energy and climate conversation globally.

ML

Thank you very much. Chris, it's a great pleasure.

CB

Great pleasure. 

ML

So that was Chris Bowen, the Minister for Climate Change and Energy of the Commonwealth of Australia. As always, we'll put links in the show notes to resources that we mentioned during our conversation. Principally, that would be then episode 253 with Fatih Birol, whom I spoke to just after the beginning of the current Gulf crisis, and episode 98 with the great Bill McKibben, who came up with the phrase about sunlight travelling from the sun and not being held up in the Straits of Hormuz. So I'd like to thank our camera crew here today from the Department of Climate Change, Energy, Environment and Water, our producer, Oscar Boyd, video editor Jamie Oliver, head of operations, Kendall Smith, Joe Jagger, who worked so hard to put this whole tour together, the leadership circle without whom none of this would happen, and you, the audience, for spending time with us here today. Please make sure that you've subscribed to our newsletter. You can find that at cleaninguppod.substack.com. Make sure that you don't miss any of the other episodes from either this Australia Deep Dive or our normal Cleaning Up programming. 

Cleaning Up is proud to be supported by its leadership circle. The members are Actis, Alcazar Energy, Arup, Copenhagen Infrastructure Partners, Cygnum Capital, Davidson Kempner, EcoPragma Capital, EDP, Eurelectric, the Gilardini Foundation, KKR, Mitsubishi Heavy Industries, National Grid, Octopus Energy, Quadrature Climate Foundation, Schneider Electric, SDCL, and Wärtsilä. For more information on the Leadership Circle, please visit cleaningup.live. If you're enjoying this episode, please hit like, leave a comment, and also recommend it to friends, family, colleagues, and absolutely everyone. To browse our archive of around 250 past episodes and to subscribe to our free newsletter, visit cleaningup.live.