The Price of Transition

This discussion with Matt Kean, Chair of the Climate Change Authority (CCA) and former Liberal NSW Energy Minister, focuses on the accuracy of his advice regarding energy prices, the reliability of renewable transitions, and the global commitment to Net Zero.

I challenged Mr. Kean on a 2020 claim that Australia could become an “energy superpower” with low-cost power. I argued that power prices have actually “increased astronomically” since then.

Mr. Kean maintained that wholesale prices are currently trending downward due to increased renewable penetration. He cited ABS data showing a recent 10.2% monthly drop in prices and AEMO reports showing a 38% quarterly decrease in wholesale costs. He attributed high bills to network charges and the unreliability of ageing coal plants rather than the renewable transition itself.

I questioned the $1 billion expenditure on the Waratah Super Battery, calling it a “wasted” stopgap for the Eraring coal plant, which has not yet closed. I asked how a short-duration battery could replace a 24/7 coal station.

Matt Kean said that the Waratah project is a “systems battery” (SIPS), not a standard storage battery. He said its purpose is to act as a “shock absorber” for the grid, allowing existing transmission lines to operate at higher capacities and “sweat” existing coal assets harder while integrating renewables.

Mr. Kean and Senator Ayres argued that the primary driver of cost and instability in the grid is the extreme age of Australian coal plants (averaging 38 years).

Senator Ayres noted that there had been daily unplanned outages from major coal plants (like Bayswater and Loy Yang) over the preceding three weeks, totalling 2.5 gigawatts of lost capacity, which spikes market prices.

Matt Kean corrected his previous figure (53% of global GDP), stating it is now much higher. He claimed that 165 countries representing 79% of global GDP and 87% of the world population have now committed to Net Zero targets, with many (including Australia) enshrining them in law.

This insane transition to renewables is a threat to our economic stability and industrial capacity. A One Nation government will dismantle Australia’s climate bureaucracy by abolishing the Department of Climate Change, Energy, the Environment and Water, along with advisory bodies like the Climate Change Authority and the Net Zero Economy Authority.

Further, we will withdraw Australia from the Paris Agreement, repeal the Climate Change Act 2022, and eliminate the Renewable Energy Target.

Scrapping agencies such as ARENA and the CEFC, One Nation will end all subsidies for renewables, shifting the nation’s regulatory and administrative focus toward lowering electricity prices through the expansion of coal-fired power and the introduction of nuclear energy.

— Senate Estimates | December 2025

Transcript

Senator ROBERTS: Thank you for appearing again today. Mr Kean, my questions go to you. Your responsibility is to give the government correct advice. Is that correct?

Mr Kean: Frank and fearless correct advice—that’s right.

Senator ROBERTS: That advice could steer the direction of our entire country and potentially affect every one of the 28 million people in Australia. Is that correct?

Mr Kean: We provide advice that’s frank and fearless to the government of the day. It’s up to the government of the day as to whether or not they’ll accept that advice.

Senator ROBERTS: So you’d agree that it’s vital for the country that your advice is accurate and correct?

Mr Kean: We provide the best advice based on evidence and science to the government. As you well know, Senator, it goes through the cabinet process, the party room process and the parliamentary process. It’s up to the government and the parliament as to whether or not they accept the CCA’s advice.

Senator ROBERTS: I’d like to go to your track record and some forecasts. I’m going to quote you from the Energy Insiders podcast in 2020 with Renew Economy. You said: ‘If they’re looking for a global competitive advantage when it comes to low-cost energy, we can provide it. But we’ve got to move quickly and we’ve got to move now. That is an opportunity for us to be an economic superpower—not just an energy superpower but an economic superpower. It’s too big an opportunity not to grab.’ Since you said that you can provide low-cost energy in 2020, power prices have increased astronomically. When are Australians going to get the cheap power you promised?

Mr Kean: According to the Australian Bureau of Statistics, they are already seeing those power prices coming down as a result of renewables. Look at power prices in October. They were 10.2 per cent lower than in the previous month. We know that they bounce around, particularly as state and Commonwealth rebates come into force or conclude, as it just happened to be. I, as a former energy minister in New South Wales, and we, as the Climate Change Authority, are acutely aware that some households and businesses are doing it tough and are looking at what costs they can contain. In the energy and climate war that we seem to be mired in yet again, perspective can be the first casualty. In the present consumer price index basket of goods and services that the Australian Bureau of Statistics uses to track inflation in the economy, electricity prices have a 1.84 per cent weighting. That’s not nothing, but I think it’s an important bit of context for you. Going back to those price trends that you talked about and that I stand by, no doubt you will have noted that wholesale prices have largely been in retreat of late, and that’s because renewable energy’s share of the grid is increasing. Check out AEMO’s Quarterly energy dynamics report for the September quarter. If you need the facts, they’re right there available to you. You’ll see that wholesale power prices across the national electricity market were on average 38 per cent below those of the June quarter this year. Compared with the September quarter last year, the fall was 27 per cent. That’s not because more fossil fuels have entered the market; that’s because renewable energy is pushing down wholesale prices. The more cheap energy we get into the market, the better off consumers and businesses will be.

Senator ROBERTS: Are wholesale prices going to be cheaper or more expensive than they were five or 10 years ago? Are they cheaper or more expensive than they were?

Mr Kean: As I said, just look at the Quarterly energy dynamics report that AEMO has just put out. It is clearly showing that wholesale prices are only heading in one direction. They make up about a third of a typical household’s—

Senator ROBERTS: Are they cheaper than they were five or 10 years ago?

Mr Kean: I’m not referring to the wholesale dynamics report comparing them to 10 years ago. I’m referring to the most recent one, which shows that wholesale prices are coming down.

Senator ROBERTS: My question was: are they cheaper or more expensive than they were five or 10 years ago?

Mr Kean: I don’t have that data in front of me, but I’m very happy to table that data for you.

Senator ROBERTS: Thank you. Wholesale prices are only one part of someone’s bill. There will be many people watching here—small businesses, large businesses, families—who will have taken issue with what you said. An increasing part is the network charges, especially for transmission. Are the network charges going down as well?

Mr Kean: As I said, wholesale prices make up about a third of the typical household bill, and we know that the cheapest form of new generation is renewables. We know that ageing coal-fired and even gas-fired power plants will shut in the coming decade or so. So, to unlock that cheap wholesale energy produced by renewables, you will need more networks built. That’s for sure. Certainly I can talk to the situation in New South Wales, and perhaps some of these questions can be directed to the energy minister, which I am no longer. But what I will say, as the former energy minister in New South Wales, is that, when we legislated the roadmap, we looked at the net impact on consumer bills of transitioning towards a firmed renewables-based grid, including transmission line upgrades. What we were able to clearly demonstrate is that net, on average, consumers would be much better off as a result of the transition.

Senator ROBERTS: In your role as New South Wales energy minister you commissioned the $1 billion Waratah battery, which recently suffered a catastrophic failure. You commissioned and designated as a top priority project this huge expenditure as a stopgap for the closure of Eraring this year. It was forecast to close this year. Eraring didn’t close this year. Experts are saying it might not close before 2030. So the $1 billion shock absorber you put in place as New South Wales energy minister isn’t needed anymore as a stopgap. If you wasted $1 billion on a battery that wasn’t needed, why should we trust that you can provide good advice to the federal government? Can you explain exactly how a 0.7 gigawatt battery that lasts for two hours is meant to replace a coal-fired power station that can run at 2.8 gigawatts for 23 hours a day.

Mr Kean: I’m very happy to explain what we did when it came to considering the exit of Eraring. It’s a matter of public record that Origin Energy suggested they would bring forward the closure of that coal-fired power station seven years earlier than we anticipated. As the former minister for energy, I can say we conducted an arms-length process headed up by a number of experts, including Kerry Schott, the former chair of the Energy Security Board. We ran a competitive tender process for different technologies to fill that gap. We had input from AEMO, the Australian Energy Market Operator, the engineers who the run the system, and we compared the cost of extending Eraring for 18 months with a number of other options to fill that capacity gap. In terms of the work that was done by independent expert advice, we were advised that the best option for the total New South Wales power grid was to build a systems battery, a SIPS battery, that would unlock greater capacity in the transmission networks to be able to sweat the other coal-fired power stations harder and would open up the ability to bring more renewable energy into the system. You’re characterising the battery as a storage battery. It’s not a storage battery; it’s a systems battery that unlocks more capacity and new transmission networks. That means you can run your existing coal-fired power stations harder—think Vales Point and Bayswater—and you can get more renewable capacity stored. That was the basis from which we went down that path, and anyone suggesting otherwise is being dishonest.

Senator ROBERTS: On New South Wales election night, when your government was defeated in 2023, I distinctly remember the incoming Labor energy minister flagging the need to keep Eraring open. She was quite clear about it. She was on a panel and on the night of the election she said, ‘We’re going to have to do something about keeping Eraring.’ They weren’t her words, but that was basically what she said. Why would she have that point there? Many people think that New South Wales cannot operate as an industrial economy without Eraring continuing, and now there are talks of Eraring continuing. What did she know as opposition energy minister and spokesman that you didn’t?

Mr Kean: Maybe I could refer you to the evidence of Deputy Secretary Duggan who just appeared before the inquiry. He made the point that the average age of our coal-fired power stations in the national energy market is 38 years and the average end closure date of coal-fired power stations is 42 years. We can’t keep putting bandaids or temporary solutions in place. We need to plan for the future. What you need are clear targets and good policies to get new capacity installed. Just because you say you’re going to extend an aged, clapped-out coal-fired power station doesn’t mean it’s going to work. We need to build new capacity before the old capacity closes. That’s the responsible thing to do. Whether it be in my role as the former New South Wales energy minister or in my current role as the independent chair of the Climate Change Authority, I will always act on the best evidence and advice of experts. I’m advising you to do likewise.

Senator ROBERTS: You’re hiding behind averages. A lot of damage can be done doing that.

Mr Kean: No. I’m just making the point.

Senator ROBERTS: I asked you a question about Eraring. Why did the incoming Labor energy minister want to keep Eraring open?

Mr Kean: It’s another question for—

Senator Ayres: I think it’s outside of—it’s pretty hard for Mr Kean to put—

Senator ROBERTS: It goes to the accuracy of forecasts.

Senator Ayres: himself into the mind of the current New South Wales energy minister. I think that’s a very difficult thing for him to do. But Mr Kean’s right—the biggest driver of cost in the electricity system at the moment is our ageing coal generators and the incessant, regular outages. There has not been a single day over the last three weeks where there hasn’t been an unplanned outage. A couple of days ago we had Bayswater, Gladstone, Loy Yang, Vales Point and Yallourn—a total of 2½ gigawatts of unplanned outage. That drives cost in the system. Mr Kean’s point is right. The way to deal with that is to build more renewables, build more storage and build more transmission. Nobody from Cape York to Bruny Island or from Sydney to Perth is going to build a coal-fired power station, because it’s a dumb idea. It’s a dumb idea economically.

Senator ROBERTS: Has the national electricity market been tested?

Senator Ayres: It’s a dumb idea in commercial terms. It’s a bad idea for the grid. It builds additional cost into the system. At the moment we are dealing with the reality of the fact that it’s coal that’s driving cost. A decade of disinvestment is compounding that. That’s the truth of it. If you want to keep prosecuting the imported culture wars, go for your life.

Senator ROBERTS: Last question?

CHAIR: Yes.

Senator ROBERTS: Okay. The minister seems to be unaware of the electricity rules and the national electricity market, which favour solar and wind and destroy coal. We’ll leave that aside. You say: ‘The world is moving in this direction. Fifty-three per cent of the world’s GDP has signed up to achieve zero net emissions by 2050, so it’s only going in one direction.’ Yet we’ve seen the USA China and India—we’ve seen massive numbers of countries—walk away from net zero, and others don’t bother complying. Do you still stand by your figure that 53 per cent are committed to achieving net zero by 2050?

Mr Kean: No, I don’t. I’d like to revise that number. It’s now 165 countries that have announced a net zero target. These countries account for 78 per cent of global emissions, 79 per cent of GDP and 87 per cent of the global population. That was in 2022. That’s a vast increase since I cited those figures a few years ago. So 149 countries have announced a net zero target by 2050 or sooner and around 50 countries have enshrined their net zero target in domestic legislation—including Australia—with more planning to do so. That’s 37 out of 38 OECD member countries having a net zero target. So, no, I don’t stand by those previous comments. They’ve been exceeded since then, and people denying the reality of the momentum behind the need to reduce our emissions are not acting in Australia’s interests.