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Interview: Mike Cannon-Brookes -

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MATT WORDSWORTH, PRESENTER: Well, let's hear from Mike Cannon-Brookes, the Australian businessman behind that bold plan to fix South Australia's energy woes in just 100 days. He's the co-founder and CEO of Australian software company, Atlassian. Mike Cannon-Brookes, welcome to Lateline.

MIKE CANNON-BROOKES, ATLASSIAN CEO: Thanks for having me, mate.

MATT WORDSWORTH: You co-founded a company that's bigger than Qantas, so I'm guessing you're a fairly busy guy. What motivated you to get involved in this?

MIKE CANNON-BROOKES: Yeah, no, look, it was, like, 1am in the morning and I'd had a pretty bad week of hearing politicians talking about the wrong things to do with energy in this country. And I, I saw the bet that Lyndon put out. Lyndon put out a statement that he could solve it.

MATT WORDSWORTH: He's the CEO of Tesla here?

MIKE CANNON-BROOKES: He's the CEO of, or was the CEO of Solar City, I believe, so now of Tesla Energy. And he said he could fix it. And I just tweeted him at 1am and said was he serious and did he think he could do this if I could figure out the other parts of the equation.
LL 2 - MIKE CANNON-BROOKES
MATT WORDSWORTH: Were you prepared for the response that you got? You said your phone, like, blew up?

MIKE CANNON-BROOKES: Absolutely not, no. I wasn't, I wasn't even expecting to get a response full stop, let alone the reaction that's come back from all quarters of society. So, it's been quite mind-blowing, actually.

MATT WORDSWORTH: What does it tell you about the state of the energy debate in Australia, that you're getting this incredible response just from people on Twitter and industry and politicians?

MIKE CANNON-BROOKES: Look, I think, I think it clearly says that people are pretty sick of the debate that we've been having. You know, I if I had a goal, I think it was probably to try to change the conversation and introduce alternate solutions and prove that there are other ways to solve these problems.

And that's worked rather better than expected, as has the number of people who've come back and said that they're really excited and would give their time, give their money and are keen on renewable solutions and technology being the way forward.

MATT WORDSWORTH: Yeah, because, I mean, batteries like in the industry, they've been talking about this for a long time, but do you think you've achieved your end here in that you've got a permanent change in the conversation - batteries are going to be part of the solution?

MIKE CANNON-BROOKES: Oh, it's pretty early to claim victory on a permanent change in the conversation, but look, it's certainly, it's an utterly different conversation than we were having seven days ago. And the important part of that conversation is that we're now having conversations and debates about which batteries are the best, which is a fantastic change in the conversation, number one.

And number two, people are starting to believe that this is not some sort of futuristic, 20 years from now technology. Like, this could be here today, and we could do this if we wanted to do this and we put our minds to doing it. And that's a different conversation.

MATT WORDSWORTH: Yeah, today, total coincidence, the South Australian Government says it wants to build a 100MW battery storage, the biggest in Australia. What does this announcement do to your plan to build an exactly the same sized battery storage facility in South Australia with Elon Musk?

MIKE CANNON-BROOKES: Look, I mean, calling it my plan's a bit grandiose. But, look, the South Australian Government has committed, as far as I'm aware. I can't say I've read the entire plan that they've put out, but as far as I'm aware, they've committed to trying to put some money towards helping a large-scale battery which would be the largest in Australia, potentially the largest in the world, to exist in South Australia, to help solve, to be a piece of the solution to their energy crisis that they're having down there. And that's fantastic, that's forward thinking.

MATT WORDSWORTH: So, are you going to sort of latch on to that sort of fund to help finance this deal, or is this completely separate to that announcement today?

MIKE CANNON-BROOKES: I'll certainly be having a look at that in the next couple of days and see if it makes sense. There's still some economic challenges in making these batteries happen, but they're far, far, far more realistic than they have been in the past.

MATT WORDSWORTH: Yeah, the kind of power outages that they've seen in South Australia. I mean, one of the limitations to batteries is that they run out, you know, they're two hours or 4 hours at 100MW an hour. Would they have solved the problems that South Australia have seen recently?

MIKE CANNON-BROOKES: Look, a 100MW hour battery, I believe, would have certainly solved and ridden them through the February problems, that they had. So, about 90,000 houses got put out in February. So, that is pretty clear that that would have been the case.

Back in September and in October, I believe they had some much more major outages. There's a question mark about whether 100 is enough to get there. Some people say it is. Some people say it would need to be 200 or 300. Regardless, the 100 would have made a huge difference even in that case. So it would certainly be a big part of the solution and potentially could have actually made that blackout not happen.

MATT WORDSWORTH: And the economics of battery storage just seem to be falling like a stone. Like, Elon Musk basically in that tweet to you, halved the world cost of battery storage.

MIKE CANNON-BROOKES: Well, the most competitive world cost, yes, I suppose, yes.

MATT WORDSWORTH: So, are we seeing prices just fall like a stone?

MIKE CANNON-BROOKES: Prices will continue to fall of battery storage. Prices will continue of fall of batteries. I mean, cell phones, laptops, computers, electric cars, plus residential battery storage and industrial stage storage, you will see this scale of production just going up and up and up in the coming years. And that will result in the prices coming down and down and down. That will continue to happen.

MATT WORDSWORTH: So if South Australia's got $150 million renewable fund to tap into and they're aiming for 100MW, how much could they actually get for their money?

MIKE CANNON-BROOKES: Look, it depends on how that $150 million is put towards which projects. There's a chance they could get significantly more than 100MW with that amount of money as far as I understand, because they're effectively buying insurance against the battery owner to stabilise the grid in times of crisis. So, the rest of the time the battery owner would have their own ways to make their money by effectively trading energy. And between the two of those, you know, you could get well more than $150 million-worth of batteries with your $150 million fund.

MATT WORDSWORTH: South Australia also wants to build a gas-fired power plant so they can deploy it during the peak demand to prevent those blackouts, the brown-outs as well as to stabilise the grid. But you don't think peaking plants are such a good idea, do you?

MIKE CANNON-BROOKES: Oh, long-term they're not the right solution, that's for sure. We're in a big transition of energy at the moment. And there's no way that that transition doesn't happen. Solar, wind, renewable energy - the costs are coming down and down and down. The productivity of those resources are going up and up and up.

So, that is going to be the way of the future. There's no-one you will find that will disagree with that. The question about whether we need a peaking plant, another peaking plant, to get through the current shortages or whether just batteries would be enough is a good debate to have. I'm not sure I've exactly read their plan in detail to understand.

MATT WORDSWORTH: Well, if you look at the Labor Party, you look at the Coalition, it seems like there's this consensus that gas is a transition to renewables, but you're saying, just jump straight to renewables?

MIKE CANNON-BROOKES: Look, I think you need to be smart about how you do it, right? People fundamentally want to press a button and get electricity, they want to get their lights turned on. Then the second thing they want is they want that electricity to be as clean as possible, because they want a better planet for their children, right? And that's been quite clear from the response this week.

The question is how we get there and how do we deal with entrenched interests and all sorts of other people that are, you know, holding us back from getting there as soon as is economically possible for consumers and for everybody else.

MATT WORDSWORTH: Another idea is the transition would be helped by clean coal. What do you make of that?

MIKE CANNON-BROOKES: Look. Luckily I'm not a politician, so I get to deal in facts.

MATT WORDSWORTH: But you can talk, say whatever you like.

MIKE CANNON-BROOKES: That's right. I get to deal in facts. That just doesn't exist. Right? So, it's a, an invented phrase.

MATT WORDSWORTH: You have no faith in clean coal?

MIKE CANNON-BROOKES: No.

MATT WORDSWORTH: Why's that?

MIKE CANNON-BROOKES: Because it will be both more expensive than large-scale wind and solar plants, number one, to build, in terms of the capital and the amount of energy produced over time and secondly it's not clean at all.

MATT WORDSWORTH: You've invested in a lot of solar companies. How does, as an investment, it stack up, as a businessman, a billionaire, how does an investment in solar compared to an investment in gas or other forms of fossil fuel stack up?

MIKE CANNON-BROOKES: Sure, if you're building a large-scale power plant today, a solar is the cheapest and will continue to get cheaper and cheaper and cheaper per megawatt of power that you're producing. So, I've invested in a series of different types of solar companies, some of them doing solar financing for residential, some of them doing faster ways of deploying residential rooftop solar, et cetera. So, there's a whole lot of industries around here, but it's certainly the way of the future.

MATT WORDSWORTH: And we are running out of time. But I just want to ask you about a tweet that you said that you spent an hour talking to Alan Finkel. Now, he's the chief scientist, our viewers would know, and he's writing a really hotly anticipated review into Australia's energy market. So, in that conversation, did he give you any hint about where he's headed, where his mind's at?

MIKE CANNON-BROOKES: Oh, he did. I came away very excited about the way he's thinking about the future of where the energy market should go in Australia. So, Hopefully he can get that written down and out to the people to judge whether that's OK.

MATT WORDSWORTH: No hints ahead of the game?

MIKE CANNON-BROOKES: I can't, I don't think I can give that away.

MATT WORDSWORTH: Alright. Mike Cannon-Brookes, thanks so much for your time.

MIKE CANNON-BROOKES: Thanks for having me, man.