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Transcript of interview with Tom Tilley: Triple J Hack: 21 May 2015: Renewable Energy Target

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The Hon. Greg Hunt MP Minister for the Environment


21 May 2015




Topics: Renewable Energy Target

TOM TILLEY: Well, let's go to the Environment Minister and ask him why we're not at our full potential, why we're not leading the way in the renewable energies sector. Greg Hunt, thank you so much for joining us.


Thanks very much Tom. But as ever, I would start by saying the presumptions in your question come loaded and it would be great to get an introduction which was balanced, not presumptive.

TOM TILLEY: Okay. That's your view on it. Why are we at 39th in investment for renewables and not 11th when we have so much natural resource and so much intelligence in our country?


Well, we've just struck an agreement on renewable energy and I'm a deep, strong, real supporter in it. And that's an agreement to achieve 23.5% of Australia's energy from renewable sources by 2020. That is a very significant task that will probably produce, as the Clean Energy Council has said, somewhere approaching $10 billion of investment. The problem was that the previous Government created a scheme called phantom credits, believe it or not, where they gave out free renewable credits to people who hadn't produced renewable energy.

So in others words, if somebody had produced one renewable unit they gave them five credits, it created a massive surplus in the market, that plunged it into the point of uncertainty where people didn't have to build new plants in order to achieve their targets. In other words, they were tendering up phantom credits, to meet the target. That was done under the previous Government, who warned it would create a crisis. It did. We inherited that problem and we've worked to resolve it and now we should see Australia grow to about 23.5% renewable energy and I think that's a fantastic agreement.

TOM TILLEY: Why was it a crisis? Because people looking at the discussion over where we should aim for and looking at the fact that we were looking towards 41,000 hours and now we're coming back to 33,000, say it was actually doing well, that we were actually going to shot above our Renewable Energy Target.


No, that's ridiculous. The answer's very simple, that by printing money, by printing certificates, they created a surplus you didn't need to build and it was clear that we were going to go nowhere near the required build. And the consequence of that is that there just would have been a carbon tax equivalent of $93 per tonne of emissions. So four times what was the carbon tax under the previous Government, but without actually getting the renewables.

All of this came back to this printing of phantom credits where basically people were able to claim they were providing renewable energy credits but there was no renewable energy backing them. And the industry knew that this was unsustainable. I remember when it was created, I called them phantom credits, I warned about the problem, exactly what we warned about led to the challenges for the sector. We said we'd fix it and now I think that, as the report says, the best part of $10 billion, or thereabouts, will be invested over the coming decade.

TOM TILLEY: Well they say it's being unlocked, and that it was being locked up by the uncertainty over the negotiations. Are you rejecting out of hand that that massive 19% drop in investment over the last year had nothing to do with the uncertainty about the negotiations?


Look the answer is that overwhelmingly the challenge, the need for the negotiations, the need for the issue was created by the phantom credits. If you print money you get inflation, if you printed phantom credits, there was a view that they didn't need to invest in order to meet certain outcomes. There wasn't going to have been the build. And we went back and we said, well how are we going to get this into balance so as we don't have householders and students and families and pensioners being hit with a $93 per tonne carbon tax, and how do we get new renewables flowing?

This whole review that we've been through was mandated by Labor and the Greens in their legislation, not us. They put it in the legislation, they've now said it was a mistake and I agree with them, but what we've done is resolved the way forward and I'm really happy. This means additional renewable energy projects around the country whether it's wind or solar, or whether it is other forms of renewable energy, now it's open to the participants. It's a tough ask to build this much renewable energy in the next five years. I think we will get there…



…and it'll be the most significant period of renewable investment in Australian history.

TOM TILLEY: So, Greg Hunt, do you think we could be at the top of the tables for renewable energy investment and production and if so how long will it take?


Look, I think we can do a very significant job. Do you want to pretend that if you have a country like Iceland or Sweden which has enormous natural hydro reserves that we could achieve that same level, I think you'd have to be very cautious but I think the $10 billion which is likely to be invested will see Australia ranked very, very highly and our 23.5% is very significant. It will be a high figure internationally.

Countries that have significant hydro reserves and I know that if we or anybody else proposed damming new rivers to create hydro reserves, many of the people who say more renewables, would say don't create hydro plants and I think you know that as well. So, that's happened in Iceland and Sweden, that's happened in New Zealand but really our major hydro projects have, on all the advice

I've got, been largely done in Australia but we've got now wind and solar as the primary opportunities going forwards.

TOM TILLEY: Okay, Greg Hunt, you talked about being a deep strong supporter of renewable energy and you've renegotiated the Renewable Energy Target to 23%…



TOM TILLEY: …23.5%. What about the future, what about 2030, where would you like to see renewable energy at in terms of our overall energy consumption by that point?


Well, this is a target to reach to 2020 and then it was designed by the ALP as a program which ran to 2030. I want to make sure that we actually achieve the targets so let's actually achieve what was said because the ALP set a figure and then designed a flaw in the mechanism and nothing was done…

TOM TILLEY: Okay but what about your aspirations, where would you like to go? You're the Environment Minister, you're a deep, strong supporter, where would you like to see us?


Look, I do want to see us grow, I'm not going to try to pick a figure today because only this week, only this week we have settled the task of getting ourselves an objective of 23.5% and then I'm not going to try to, in any way, change those parameters.

Right now, let's get all of that $10 billion mobilised and invested and then a future Minister at a future time can look beyond that but this will see us travelling for a very long period of time to achieve this outcome. It'll be the greatest growth, it will be a challenge and it will be the greatest growth in renewable investment and employment in Australian history.

TOM TILLEY: Greg Hunt, great to have you on the show as always. Thanks for joining us.


Thanks very much Tom.

TOM TILLEY: That's Greg Hunt the Environment Minister.