PRIME MINISTER:

Well, it’s great to be here in the Snowy Mountains. I’m here with Paul Broad, the Chief Executive of Snowy Hydro and Ivor Frischknecht the Chief Executive of the Australian Renewable Energy Agency. What we are announcing today is that ARENA, that Ivor runs, is contributing $8 million to the $29 million feasibility study that Snowy Hydro is undertaking, the work on Snowy Hydro 2.0.

Some of you who have come out on the helicopters will have seen the drill-rigs in operation. What Paul is doing is examining all of the geology all along the route of the tunneling that will be undertaken to connect the Tantangara reservoir to the Talbingo Reservoir. Of course Tantangara is about 700m higher than Talbingo and this will be the biggest pumped hydro scheme in the Southern Hemisphere at 2,000 megawatts. When it is doubled to 4,000 megawatts as I’m sure it will be in the future and indeed it could go up to 8,000, this will be the biggest pumped hydro scheme in the world.

Now this is vitally important to ensure that Australians have affordable and reliable electricity./ This is all about more affordable electricity. We have so much renewables going into the system. So much solar, the cost those of renewables keeps on coming down. 

Paul could say a little bit about the cost of solar in particular keeps on coming down. But the sun doesn’t shine all time and the wind doesn’t blow all the time, so you need to have storage. You need to have a lot of it.

The only way to get large-scale storage in the sort of volumes we’re talking about, is through pumped hydro. Now, this has been neglected. Lets be quite frank about this.

The Labor Party – I don’t want to be unduly partisan with these distinguished people next to me  -but the Labor Party for years has talked about renewable energy. They still do. But they never gave any thought to storage. That’s why you had the energy disaster in South Australia.

It is my Government, for the first time, that is putting large-scale energy storage on the agenda.

Not just talking about it, getting on and building it.

350 jobs already created on this scheme. When it is underway, 5,000 jobs.

Right here, in Cooma, 200 people are working in this district on the project at the moment, 50 coming in and out.

So it is a big regional job story, but above all, it is a nation-building energy story.

The Snowy Mountains Schemes has inspired generations of Australians. I can remember, as a little schoolboy, coming and being awed by those machines we’ve seen today. You know, that’s 60 years ago, this project was being built. 60 years ago and it is still working and it will be there for 600 years. This was a nation-building project. What we are doing now is doubling it and we will – I have no doubt, in the future – make it even bigger still. Because you have that capacity with pumped hydro, to just take the energy when it is cheap in the middle of the night, pump it up the hill and then run it down the hill when it is in demand at peak periods.

So this is critically important to ensure more affordable electricity in the future and more reliable electricity. It makes renewables reliable. I want to say to all of those people that love renewables – and I’ve got two gentlemen on my left and right here, who love them as much as I do – this is the way you make renewables work.

People can talk about it and they can have renewables targets, that’s terrific. It’s all very good. But if you don’t have the storage, you have a disaster. Because when the wind doesn’t blow and the sun doesn’t shine, what do you do?

This is an example of economics and engineering forming policy and planning, as opposed to ideology and idiocy, which we have seen from our opponents.

So I will ask Paul to talk about the scheme, where it is up to at the moment, the work that’s underway and the work that will be undertaken in the future. Ivor can talk about the role of Arena, which of course is backing innovation in renewable technologies right across the nation.

What about, we went to the big turbine hall at Tumut 2, 224m below ground level. Tell us about the turbine hall that we’re going to build for Snowy Hydro 2.0, how big that’s going to be in comparison?

PAUL BROAD:

Yes, thank you Prime Minister. I really wanted to take you out there today and show you an existing power station. The one we are proposing to build is twice the size, so it’s 200m long, two football fields long. From top to bottom it will be a kilometre underground, straight down. So the size of the engineering challenge is enormous.

The information we are gathering now from all the geological work, all the detail design is coming together and we will have the feasibility study done in December. A huge amount of work both from SMEC and Snowy and from experts all around the world are coming together to do this work. Because on world scale, this is huge, this is huge.

PRIME MINISTER:

SMEC is the Snowy Mountains Engineering Corporation, it’s like getting the band together after a long absence. Getting the old band back. All of those traditions Paul, are coming back.

PAUL BROAD:

Quite amazing.

PRIME MINISTER:

For this second stage?

PAUL BROAD:

Amazing, because the thought process of this started back in 1966. It’s a long time for you and I, even. It’s a long time ago. To understand the thought that went into it, we’ve had a few of the old guys would you believe, from those days have come back and critiqued it. So that’s been a huge learning curve for all of us.  Way down the track, we are looking forward to bringing the feasibility study to life and bringing it to you and the Government and the board in December.

PRIME MINISTER:

Fantastic. Now Ivor, come and tell us about what Arena is doing here and also about what is happening in renewable technologies, between solar and wind?

IVOR FRISCHKNECHT:

Sure, the Australian Renewable Energy Agency is the Commonwealth’s investment in innovative new renewable energy technologies. Renewables are going to keep getting cheaper, particularly wind and solar are going to get a lot cheaper still. The future really belongs to wind and solar but we know they are not available all of the time. In fact, we have this notion of ‘peak’ in the day, now, and in the early evening and ‘off-peak’ at night. That’s going to shift to ‘off-peak’ being when wind and solar are not available. Which is going to be at different times of the day, especially wind. It can sometimes be in windy in the day, sometimes be windy in the night. We need to figure out how to store that energy while it’s very available, very cheap. That’s where hydro comes in.

You can store vast amounts of energy. Even with days on end with no wind or very little solar because it’s cloudy, we will have a reliable energy supply. So it’s critical to integrate all of these pieces and over the coming years we’re going to be doing exactly that.

There are various forms of storage – pumped hydro isn’t the only one – but batteries and demand management are very complimentary with the vast scale of pumped hydro. So, batteries are small, they can be distributed around the network, they’ll add to reliability. So ARENA is supporting all these different efforts and supporting the integration of all of them to add to reliability.

PRIME MINISTER:

Thank you, Ivor. How long will it take to build this, Paul? We’ll get him on the sticky paper now!

PAUL BROAD:

Well, I don’t want to get the cart before the horse, the feasibility study will tell us that. But I mean you know, it’s six years type thing. You know? It depends very much on the geology and we’ll firm it up in the next month or two.

PRIME MINISTER:

That’s right. But the important point is this scheme will obviously take some years to build. So it will contribute to more affordable and more reliable electricity in the future, but it’s not going to contribute to it tomorrow.

Now, we’re also taking action right now to ensure that electricity prices are lower for Australian families. Now, what we’ve done – Paul has been part of this because Snowy Hydro is also a retailer – he knows we’ve met with the retailers a few weeks ago. We’re meeting with them again this week. They’ve given us commitments, Snowy was one of the retailers who gave us that commitment to ensure that customers know what the right plan is, that they should be on. In other words, there are many, we believe that there is at least 1 million households – probably a lot more – that are paying more for electricity than they need to, because they’re on the wrong plan. So we’re taking action right now to ensure Australians right now are not paying more for their electricity than they need.

We’re also taking action on gas prices. Now you know, gas prices have become very high on the east coast. Why’s that? Frankly, because of the Labor Party. I see Bill Shorten has been out talking about gas prices today. If I was him, I’d stay away from that because it only reminds people, he was a Minister in the Federal Labor government that allowed the gas to be exported off the east coast of Australia, without putting in protections for domestic gas supply.

They put in none.

As a consequence, because of the poor planning, you saw more gas being exported than was being developed by exporters. The domestic market because short of gas. Prices went through the roof.

So I’ve taken action to limit gas exports. That has already seen the price coming back, but we will ensure through our domestic gas export mechanism scheme, we will ensure that there is adequate supply of gas for the domestic markets. So that is for electricity generation, industry, households, families and so forth.

So whether it’s in the here and now – as of today – or in the longer term and medium term, we are taking action to ensure Australians have affordable and reliable electricity.

But again, it needs engineering and economics.

Ideology, politics, idiocy as we have seen from our opponents, that is not going to deliver anything other than unreliable and unaffordable power.

JOURNALIST:

When you talk about jobs in the region, how many will go to skilled migrants?

PRIME MINISTER:

The jobs will be set up here. There will be considerable demand for jobs. I don’t know, how many people are you bringing in from overseas Paul?

PAUL BROAD:

The first preference is really for local contractors here. So a lot of the drilling is being done by the local contractors. Then we source as we go, building a scheme as large as this, globally. So in the next 12-18 months, we’ll be sourcing contractors from all over the globe to bring the best we know, they know, to build a project of this scale.

JOURNALIST:

Can you confirm that the ARENA board has approved the $8 million grant for the second stage of the feasibility study? Could you or perhaps Mr Broad, just talk about, like, why is that money needed? Why is there an extra feasibility study when the first one isn’t finished yet?

IVOR FRISCHKNECHT:

I can confirm that the board has approved it and it is just the one feasibility study.

JOURNALIST:

It’s an expansion on [inaudible] grant in March?

IVOR FRISCHKNECHT:

Yes, because the feasibility study has been reformatted. So it started out as ‘a small project’. It has turned into a far larger, far more all-encompassing project. So at the size of it, the overall size of it grew as well.

PRIME MINISTER:

That requires a lot more drilling.

IVOR FRISCHKNECHT:

Absolutely.

PRIME MINISTER:

Yeah, because the key is the geology and without wanting to trespass on Paul’s expertise or the expertise of the people from SMEC, one of the big swing factors of the costs is whether the tunnels have to be lined with concrete or not. That depends on the geology.

If it was all going through granite – stop me if I am getting the geology wrong, so far so good – if it was going through granite you stablise the sides of the tunnel with rock bolts.

If on the other hand it’s a more brittle material, if it’s different rocks, sedimentary layers and so forth, then you’d probably have to line it with concrete. That has some benefits in terms of the hydraulic efficiency of the tunnel, but it also adds to the costs.

So that’s why you’ve got to do the drilling. We’ve been over a couple of drill rigs today and they’re finding out what is beneath their feet.

JOURNALIST:

Prime Minister you’ve spoken a lot about the pressure that you’re trying to put on the electricity retailers to help consumers. One of the things that they were saying after your last meeting is the need for a Clean Energy Target to bring about some sort of certainty there.

How hard will you be advocating a Clean Energy Target within your Party Room, considering it is one of the more contentious parts of Dr Finkel’s report?

PRIME MINISTER:

Well look, we’re working all that and we’re working through that with it AEMO. We’re getting a report from them, this is the Australian Energy Market Operator. We’re getting a report from them very shortly on what the likely gap in dispatchable or baseload power is going to be over the next five and ten years.

We’re taking this very carefully. Can I tell you, just having a Renewable Energy Target or a Clean Energy Target by itself, is not going to be able by itself to ensure that we have the baseload power we need in the years ahead. So there’s quite a lot of complexity in this. The one thing we do know, is that we will need a lot more storage.

Now, I am the first Prime Minister and I believe the first head of a government in Australia, to really put storage on the agenda. I did that back in February at a speech in the Press Club – many of you were there – and we got in touch with Paul shortly thereafter. To our delight, he said: “Do I have a pumped hydro storage scheme for you,” blew the cobwebs off the old plans, didn’t you Paul?

PAUL BROAD:

That’s it.

PRIME MINISTER:

Yeah, there they were. So that’s why I say there’s something very romantic about this; because this idea of using these mountains to store electricity, was part of the original vision of its’ founders. There is one pumped hydro element here at Tumut 3, but it is relatively small. This is taking it to another level. It’s going to be vital. This is making renewables reliable.

JOURNALIST:

You’ve said a couple of times that having a renewable or clean energy target isn’t the be-all and end-all, but the sector across the board has been crying out for the certainty, the policy certainty that having a Clean Energy Target would give. Can you give the sector a timeframe when you might?

PRIME MINISTER:

Again, we’re working through it. It is very important that you have the right plan going forward. So vitally important that we also get that information from AEMO. We have to get a handle on the size of problem that we’re facing in terms of dispatchable or baseload power. Now did you have a question?

JOURNALIST:

Yes I do!

PRIME MINISTER:

Good.

JOURNALIST:

Are there any plans in place to cope with influx of visitors and workers and their families?

PRIME MINISTER:

Well I’ll ask Paul to talk about that. We were at Cabramurra where he’s going to significantly expand the size of that town?

PAUL BROAD:

Yes, that’s our first move. There are 230-odd beds at Cabramurra now. We’re going to expand it to nearly 600 – 700. So in the first flux, we will handle out at Cabramurra, the towns themselves, speaking to the administrators here, they are in the early stages of preparing to upgrade their facilities as well to cater for a significant population growth.

We’re also looking then what happens beyond 2.0? Do we go to 3.0 so that you don’t see it the  boom-bust mentality which can happen here. So we seek to not to crowd out the existing facilities for snow season of the time, so we seek not to damage the existing infrastructure that’s here, working with the locals to make sure it can happen. So that’s all in train and I think Cabramurra will be our first ‘buffer zone’ if you like for the influx of people.

JOURNALIST:

On the feasibility study at the moment, do you have you encountered any issues with that, or is it too early to tell?

PAUL BROAD:

Well, lots of issues, lots of clever engineering going on right at it moment and the geology is difficult, as the Prime Minister said. Geology is quite different from the existing tunnel systems we had and there’s a big fork running through the middle of it, so we’re testing that out.

So all of those things are part of the mix, they’re just part and part of the journey. So we’re discovering more as we go. Even today, they were talking about the size of the hall; “Should it be 200 metres or 180 metres?” That sort of thing, that’s where that detailed engineering is going in right now. That’s so important to this process.

PRIME MINISTER:

And how deep will the turbine hall be Paul?

PAUL BROAD:

It will be 50 metres deep, 30 metres wide.

PRIME MINISTER:

No, but how deep underground?

PAUL BROAD:

Oh, from the top, a kilometre.

PRIME MINISTER:

Isn’t that fantastic? What about that?

JOURNALIST:

Prime Minister just on another matter, if I may.

PRIME MINISTER:

Before you go to the other matter, are there questions on energy and Snowy Hydro?

JOURNALIST:

I have a gas questions.

PRIME MINISTER:

Yeah, you can ask a gas question, that’s close.

JOURNALIST:

There are claims that the uncertainty over the eligibility of Matt Canavan and Barnaby Joyce could let the gas sector off the hook, in terms of the Government’s –

PRIME MINISTER:

No, don’t you worry about that. Don’t worry, we will be absolutely assured that the domestic gas mechanism – it’s all in hand – and we will ensure that there are adequate supplies of gas for the domestic market. So that is all in hand, I can assure you about that. Now?

JOURNALIST:

Prime Minister just on another matter.

PRIME MINISTER:

Yes.

JOURNALIST:

We’ve had the news today that CBS will be buying the Ten Network and propping it up financially there. Bill Shorten has said that that deal effectively means that there is no pressing need to be changing media ownership regulations, as the Government has been trying to get through the Senate. First of all, what is your response to this sale and secondly does it take the pressure off that bundle of legislation?

PRIME MINISTER:

Well firstly, I’ve seen those reports. I certainly would welcome the Ten Network coming into a period of stable ownership and financially stable circumstances. That would be in the interests of the network, its’ employees and, of course its’ viewers. Turning to media law reform. Look, Bill Shorten has got to stop making excuses for his own lack of energy, we are talking about energy.

We know that the media ownership laws are not just from a pre-internet era, they’re from a pre pay-television era. This is literally more than a generation old, the media ownership laws.

We need to have ownership laws that enable the industry to respond competitively to the threat from the internet. From you know, companies like Netflix and Amazon and so forth, YouTube and all those over the-top providers that are competing in the media space now. So all we’re seeking to do is to have, bring, drag those media ownership laws into the 21st century.

Now, in terms of Channel Ten. Well, if Channel Ten is bought by CBS, if that goes ahead, fine.

But then you’ve the rest of the industry. This has not been a ‘Channel Ten amendment agenda’, this is about ensuring the viability and sustainability of the entire media sector, of the newspaper companies, of Fairfax and in particular of regional broadcasters. I mean they are the ones that are screaming out for these reforms. It is vitally important for regional broadcasters to be able, if it suits their purposes, to be able to merge with larger broadcasters, to acquire the scale to be able to compete in a much more competitive landscape.

I mean these media ownership laws go back to a time when there was no Foxtel, when there was no pay television and there was no internet at all. It is a completely different landscape now.

What Bill Shorten is doing by opposing these reforms, is he’s guaranteeing that foreign-owned media companies will continue to be able to advance at the expense of the Australian businesses that are shackled by outdated regulations.

So, here – as in every other part of policy – we’re standing up for Australian companies. We’re standing up for Australian jobs. It’s about time Shorten woke up to himself and recognised that the only beneficiaries of his opposition to media law reform are Google, Facebook, Netflix and Amazon. They’re the beneficiaries. They’d be cheering Bill on, because they’d say: “The more divided the Australian media sector is, the easier it is to pick them off”.

So we’re backing Australians.

We’re backing Australian jobs. In the media, but above all here at Snowy. Snowy Hydro 2.0, 5,000 jobs when it’s being built.

More affordable, more reliable electricity for all Australians, making renewables reliable.

Thanks very much.

JOURNALIST:

Just on Commbank?

PRIME MINISTER:

Oh, okay.

JOURNALIST:

Does it strengthen a case for a Royal Commission?

PRIME MINISTER:

Quite the contrary. What you see here is the regulator – APRA – responding swiftly, with a targeted enquiry focused on the Commonwealth Bank, which will report in six months.

Now if you had a Royal Commission right? Into the Banks, as Mr Shorten proposes, it would take years. You would be flat out getting an outcome within three years.

What APRA is doing is they’re going in, surgically focusing on CBA’s problems and issues that have come out through the AUSTRAC case and other circumstances and they’re going to have an outcome in six months.

So, the big difference between the way my Government operates and the way Mr Shorten carries on, is he’s full of words and talk, but he hasn’t got a plan to do anything.

He hasn’t got a plan for energy, right? He never talks about storage. He talks. Waves his arms around as often as a windmill, but he doesn’t actually come up with a plan.

You can see what we’re doing here; energy storage. We’re getting on with it. A big viable plan, doable and it’s happening. The jobs are here, the project is underway.

With the banks, we’re taking action. You see APRA’s taking action today. We’ve given enhanced powers to ASIC. We’re setting up a one-stop-shop for people to go to when they’ve got complaints about banks or financial service, insurance companies, superannuation. You can see we’re delivering the outcomes and the protections Australians’ need in the here and now. Focused on the practical outcomes for Australians as opposed to just the rhetorical politics of Mr Shorten.

So thank you all very much.

[ENDS]