Interview with Melissa Clarke, ABC Radio AM

MELISSA CLARKE, HOST: The Climate Change and Energy Minister spoke to me a short time ago. Chris Bowen, thanks for joining AM this morning. CHRIS BOWEN: Pleasure, Mel.

Good morning. Can you take me through why prices are falling under the default market offer? CHRIS BOWEN: A few reasons, Mel.

Mainly, we've just hit 50 per cent renewables. Renewables are the cheapest form of energy. When you have more renewables that puts downward pressure on prices.

Secondly, what we're seeing is batteries working to what we call flatten the peak. So the biggest pressure on prices is in the night time when coal and gas are called upon more. When we're calling on batteries more, which has saved the renewables from the middle of the day for the night, that is really putting very significant down pressure on prices.

And the third point is that we reformed the default market offer to really make sure that only the absolutely necessary prices or costs are included. Very minimal allowance for energy companies to go and get new customers, et cetera, et cetera. So that was an important change we made last year.

I think it's really those three things, Mel. Those reforms that really clamped down on some of the prices that retailers can charge, was it the case that retailers needed a firmer hand from the government? Had they been too quick to make profits from customers beyond what was reasonable?

CHRIS BOWEN: Look, I think it was sensible reforms. I'm not here to say that people weren't doing the right thing previously, but it was simply the case that with all the high pressure and energy costs, we looked at this and said, well, this is very hard to justify, these extra costs, so we took them out. Actually, I think it's all three things.

Just the reforms themselves would not have achieved this result, to be fair. You put all three together, you get a good material reduction in energy prices. There are still a lot of different input costs when it comes to determining electricity prices here in Australia, and there are significant global headwinds around some elements.

Is it a little too early for households and businesses to breathe a sigh of relief? Should they still be concerned that global events may end up impacting their electricity bills in the months and years ahead? CHRIS BOWEN: It is the case that most of the impact of the global energy crisis has been on oil, not on coal and gas.

That's a bit different to Ukraine. So every energy crisis is different. This one is the worst energy crisis we've seen.

There has been impacts on gas production, but we're really mainly seeing the impact on oil at the moment. But we're not complacent. There has been gas production that's been impacted in the Middle East.

But, as I said, I think we can take really quite a good degree of satisfaction with while there's more to do and energy prices are still too high in these material reductions. In some cases, 20 per cent for small businesses that we're seeing today. You're the minister responsible for Snowy Hydro along with the finance minister.

When will you outline the details of the latest cost blowout on Snowy 2.0? CHRIS BOWEN: When I have them. There's been a cost review by Snowy Hydro going on for a little while.

It's an important project. It's very complicated, one of the world's most complicated engineering projects. They have been doing that review.

I haven't received the report. When I receive a report, not long after that, it'll be made public. When do you expect to receive the report?

CHRIS BOWEN: Well, I envisage it'll be this year, Mel, but I have not yet received it. This year? Snowy Hydro announced it was looking at a review of the cost back in October.

So could it be more than 12 months? CHRIS BOWEN: Well, you know, here we are in May. Look, when I say this year, I'm giving myself some room there.

I envisage it'll be soon, but, you know, I can't release a report, Mel, that I haven't received. But you can't tell me whether it's going to be next month or another six months' time. That's a pretty big envelope of timing.

Surely you've got a better idea than that of how long it will take to complete the review. CHRIS BOWEN: I think I just said, you know, I think it'll be sooner rather than later, but I'm not going to give a promise I can't keep. When I've got it, I'll release it.

Chris Bowen, thank you very much for speaking to AM this morning. CHRIS BOWEN: Good on you, Mel. Nice to chat.

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