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Josh Frydenberg discusses today's energy security meeting -

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HAYDEN COOPER, PRESENTER: Australia's chief scientist has been drafted to lead a national review into energy security, after last week's storm that blacked out the entire state of South Australia.

Authorities are still investigating exactly what happened in the rare event, but it seems the failure was caused by the collapse of transmission towers in the storm.

The Federal Government has started a fight with the states by suggesting their renewable energy targets are part of the overall supply problem. The states, as you might have guessed, disagree.

Today the ministers met in Melbourne and I spoke after the meeting to the Federal Energy Minister, Josh Frydenberg.

Minister, thanks for your time.

JOSH FRYDENBERG, MINISTER FOR ENERGY AND THE ENVIRONMENT: Nice to be with you.

HAYDEN COOPER: Now, to be honest, it's hard to believe that Australia doesn't already have a national blueprint on energy security. Why did it take a storm to remind you to commission one?

JOSH FRYDENBERG: I think the events in South Australia were really unprecedented, with 1.7 million people losing power and all the unfortunate personal and economic consequences that have flown from that.

As a result, ministers today underlined just how important energy security, energy stability and energy affordability is to them. And they've reached now an important agreement to get the grief scientist, Alan Finkel, to undertake an independent review and come up with a blueprint for energy security for the national electricity market.

HAYDEN COOPER: But again: if this is so important, why wasn't it done in, say, the previous term of government?

JOSH FRYDENBERG: Well, over the past few years there's been a patchwork of responsibilities and a patchwork of reviews that have been undertaken. And now I think we see the urgency to bring it all together.

And the fact that the energy and the climate change responsibilities have been brought together under one minister at the federal level has also been well received and it gives us an opportunity to join those two portfolios.

HAYDEN COOPER: What exactly will the chief scientist look at in this review? And how should we believe that this won't simply become another review that gathers dust?

JOSH FRYDENBERG: Well, as we know, the energy market is changing. It's changing because of the rise of renewables.

Today about 15 per cent of the energy market is derived from renewables. By 2020, we believe it will be about 23.5 per cent and could even go higher over time.

A lot of that power is intermittent power: namely solar and wind. When the wind's not blowing or the sun's not shining, power is not being generated. Now, that raises issues for the stability of the system and so that will be looked at by the chief scientist.

He'll also look at issues relating to the hardening of infrastructure that we do need to undertake in order to prevent major damage as a result of weather events. We'll also look at the battery technology - and the chief scientist has been outspoken about the enormous opportunities that are being derived from battery storage. And that will be important, too.

HAYDEN COOPER: Battery storage is very expensive, though, isn't it? It's not really feasible at the moment for consumers?

JOSH FRYDENBERG: Well, we had a good briefing today from the CSIRO, which said that, over the next decade, battery storage will at least halve in cost. And that will be important.

And obviously there are technological developments taking place which will expand the use of battery storage beyond just the home to also being used on a commercial scale. That will be very important.

HAYDEN COOPER: Did you or any of the other ministers in this meeting today raise the issue of the cost of power bills that everyone is now paying, because surely that's an equal concern to security of supply?

JOSH FRYDENBERG: Absolutely. And I raised that directly with the South Australian Minister, Tom Koutsantonis, because in South Australia they have among the highest electricity bills across the country.

They've also got one of the highest renewable energy usages at just over 41 per cent. Now, we have to bear in mind the implications of the decisions we take about the future energy mix on the cost of electricity, because those decisions do impact upon families, who are very price-sensitive, as well as businesses when they make their decisions to invest.

And in South Australia there has been a reliance on heavy industry in the past. If you think about the Olympic Dam site, if you think about the Port Pirie smelter, if you think about what's happened at Whyalla: energy security and energy pricing is very important to those businesses.

HAYDEN COOPER: How did you go in your effort today to try and get the state ministers to drop their renewable energy targets? I'm assuming it didn't work: they didn't agree?

JOSH FRYDENBERG: Well, I think the states and the Commonwealth were diametrically opposed from the start of this meeting on that issue. But that didn't preclude us having a discussion about it and hearing from the Australian Energy Market Commission about the fact that those state-based renewable targets do raise serious questions about the cost, the efficiency and the location of investment decisions.

We also know the Grattan Institute had raised their concerns about the state-based targets.

Our concern about those state-based targets is that they've been undertaken without considering what is the impact on energy security. And today, ministers have been absolutely unequivocal. Their primary responsibility is energy security and affordability. And hopefully that will lead to a reassessment of decisions.

HAYDEN COOPER: Just on your target: so 23.5 per cent renewables by 2020. That's only really three years away. At the moment we're at about 15 per cent, as you said, so that means we have to go another eight per cent - right? - to reach that target. That's a 50 per cent increase from now. That's in itself a large increase.

How is your target any better than what the states have been doing?

JOSH FRYDENBERG: Well, our target is a more reasonable one when you compare it to a 40 per cent target in Victoria by 2025, or you compare it to a 50 per cent target in Queensland by 2030 - bearing in mind, Hayden, that Queensland only gets about 4.5 per cent of their energy from renewables today.

So our target's more realistic, plus we also have a scheme that underpins it with the renewable energy certificates. And one of the problems is: states like Victoria are going down the path of what is called "contracting for difference" and basically underwriting their various renewable schemes, which does skew investment decisions, doesn't produce the most efficient outcomes and will produce no net environmental benefit in the long term.

HAYDEN COOPER: All right. Minister, we're out of time but do I appreciate it. Thanks very much for joining us tonight.

JOSH FRYDENBERG: Nice to be with you. Thank you.