Peter Slipper (Fisher, Liberal Party) Share this | Hansard source

Mr Deputy Speaker, I thought you were extraordinarily generous to the previous speaker in allowing him to finish reading his second reading amendment. Were it possible to recycle the hot air uttered by the member for Grayndler, obviously Australia would go some considerable distance towards meeting our renewable energy target. I am pleased, however, to join the debate on the Renewable Energy (Electricity) Amendment Bill 2006. It is widely recognised in the Australian community that renewable energy is a source of energy which we as a nation ought to avail ourselves of. There seems to be a bipartisan approach to the fact that we need to use this renewable energy in a way that we often in the past have not. The requirement for greater energy efficiency and improved access to renewable energy is, quite frankly, one of the most significant issues confronting the world and Australia today. Put simply, mankind must do its best to reduce its reliance on energy, the creation of which has pollution as a by-product, in order to reduce the stress on our planet in dealing with pollutants.

The Australian government is committed to renewable energy, although you would not really think so if you listened carefully to the honourable member for Grayndler. The Australian government understands that, by dedicating ourselves as a nation to the use of so-called green energy sources—such as solar panels, wind farms and the like—we can enjoy the dual benefits of having power and reducing the impact its generation has on the environment. The renewable sources of power are varied and quite remarkable. There are the common, well-known sources—such as hydro-electric schemes, wind farms and solar power—but there are the lesser-known alternatives such as bagasse cogeneration. This is the process by which the waste left over after juice has been extracted from a crop is used as fuel to help power the extraction process. Mr Deputy Speaker Causley, you would be aware that it is quite common in the sugar industry. It is notable that through bagasse cogeneration power left over can be directed to other users. Renewable energy sources also include black liquor, a combustible by-product of the paper production process; landfill gas; wood waste; energy crops; crop waste; food and agricultural wet waste; the combustion of municipal solid waste; gas collected from sewage; geothermal aquifer; tidal energy; waves; and hot dry rocks, to name others.

The value of these renewable energy sources is well recognised in the community. Nine years ago, in 1997—which was only one year after the people of Australia entrusted the keys of office to this government—the government introduced the Mandatory Renewable Energy Target, the MRET. It is administered by provisions set out in the Renewable Energy (Electricity) Act 2000. The MRET scheme outlines the requirement that by the year 2010, and until 2020, the Australian energy producers sector will be producing an extra 9,500 gigawatt hours each year of renewable energy. This is well above the 16,000 gigawatt hours of power that were produced in 1997 when the scheme began, and it has been set as a benchmark from which greater targets can be set. The aim of the MRET is simply to encourage a slowdown in the generation of emissions in energy production and then to maintain it at a targeted level.

Obviously, it will be virtually impossible for a fossil fuel dependent power station to be able to contribute to this target in a physical capacity, but they can contribute thanks to renewable energy certificates. These certificates are created by those power companies which source their power through green means such as those mentioned earlier. The production of one megawatt hour of green energy makes the producer eligible for one renewable energy certificate. The MRET is valuable in that it places a legal responsibility on power producers to actively take part in the overall production of renewable energy. Those power companies that are unable to qualify for RECs through their own power generation methods—(Quorum formed) Thank you to my friend the member for Melbourne Ports for organising a much better audience for this speech. The House rather sadly was starkly empty and, indeed, it is good that so many people came to make sure that this important debate on the Renewable Energy (Electricity) Amendment Bill 2006 was able to continue.

As I was saying before I was interrupted, the production of one megawatt hour of green energy makes the producer eligible for one renewable energy certificate. The MRET is valuable insofar as it places a legal responsibility on power producers to actively take part in the overall production of renewable energy. Those companies that are unable to qualify for RECs through their own power generation methods—the use of coal for example—are given the opportunity to buy the certificates, thereby purchasing a share in the creation of green energy.

These certificates are traded at prices anywhere between $20 and $50 each—but mostly around $25 to $40—depending on quantity and continuity of certificate supply. The sale of the certificates provides an income stream for the producers of renewable energy. Power producers have a responsibility to comply with the renewable energy targets, and must surrender certificates annually to demonstrate that they are actually meeting their particular liability. This is one of the unique markets that have arisen in the contemporary world, such as the international trade in ‘carbon credits’—the buying and selling by countries of the right to burn fossil fuels.

As I mentioned earlier, the drive in Australia towards reduced emissions and greater production of renewable power is governed by the Renewable Energy (Electricity) Act 2000. At the introduction of the act, it was decided that it would be independently reviewed after its first two years of operation. The government’s responses to the recommendations that came out of that review are implemented by the Renewable Energy (Electricity) Amendment Bill 2006, which we are now debating. The bill is designed to improve the effectiveness of the act and the following are among the targets of the bill.

The bill introduces time limits with regard to creating a renewable energy certificate. One of the issues that became apparent during the review of the act was that there was no set time frame between when renewable energy is produced and when the REC needs to be created. The bill suggests a time frame of 44 weeks after the generation of the unit of renewable energy is formalised. The bill will allow provisional renewable energy accreditation for proposed new power generation projects. This will help to resolve a ‘chicken and egg’ type situation. As it stands at present, the Office of the Renewable Energy Regulator is able to give accreditation to those power generators which have met certain criteria, including complying with various Australian and state government regulations. However, the producer may not be able to meet the criteria until its facility is actually ‘up and running’, and this is obviously causing a dilemma. The bill suggests giving provisional approval to projects so that they can begin moving ahead, while the application proper is assessed within a six-week time frame.

The bill also clarifies various definitions in the act in relation to eligible renewable energy sources. It clarifies provisions relating to the claiming of renewable energy certificates in the case of solar hot-water heaters and small renewable-energy power generators. Homeowners can currently indirectly participate in the MRET scheme, and the bill introduces simplified procedures to administer this process. The Office of the Renewable Energy Regulator has quantified the value of domestic renewable energy systems in relation to renewable energy certificates. In addition, the bill streamlines the system by which agents are able to trade in RECs that are created in the domestic sector.

The bill makes room for the entry of new operators in the renewable energy sector, while also making provision for changes to the national electricity market. The bill suggests the introduction of new powers for the Renewable Energy Regulator, enabling it to collect information that will assist in effective monitoring of power producers, ensuring they comply with the legislation.

It is important to encourage increased production and use of renewable energy in Australia. The renewable energy certificates scheme has been helpful in bringing about a change in mindset to this issue within the power industry. It is very important that this system is not allowed to be abused, so safeguards are important. The bill proposes that accreditation for a producer of electricity can be suspended in cases where its reported output of renewable energy is manipulated so as to create extra renewable energy certificates without an actual increase in its production of renewable energy.

The provisions of the Renewable Energy (Electricity) Amendment Bill 2006 will help to increase further the effectiveness of the act in encouraging and administering the continued growth and development of the renewable energy sector. This is an important, ongoing step and the government ought to be given credit for it. The outcomes which will flow from the implementation of this bill will be very positive for the energy future of Australia. I commend the bill to the House.

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