Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Hansard source

I rise to speak on the Renewable Energy (Electricity) Amendment Bill 2006. This bill is in place of the Renewable Energy (Electricity) Amendment Bill 2002, which was amended some 3½ years ago beyond the government’s tolerance and subsequently allowed to lapse. This bill consists of amendments to the act of 2000, but regrettably and most substantially it is an indication of how the government can take five years of evidence of their 10-year program for supposedly promoting the production of electricity through use of renewable energy and then mock it. This program, purportedly encouraging the production of electricity through use of renewable energy, runs from 2001 to 2010. After five years of operation, halfway through the time frame, the content of this amendment provides plenty of evidence of the government’s negative attitude towards environmentalism generally and renewable energy specifically.

The Prime Minister’s 1997 statement, Safeguarding the Future: Australia’s Response to Climate Change, said in part:

Electricity retailers and other large electricity buyers will be legally required to source an additional 2% of their electricity from renewable or specified waste-product energy sources by the year 2010.

This target of a two per cent increase in the proportion of electricity generated from renewable energy would have meant a total of 12.7 per cent of 2010 production. Let us see how this original promotion is going.

At the time of the Prime Minister’s 1997 announcement, the proportion of renewable energy production was approximately 9.6 per cent through hydro schemes and an estimated 1.1 per cent through other methods, including solar hot-water systems. By the year 2001, at the start of the operation of the Renewable Energy (Electricity) Act, the proportion of electricity produced by renewable means appears to have fallen. Hydro schemes’ proportion of electricity generated had decreased from 9.6 per cent in 1997 to 8.1 per cent in 2001. In 2001, 12.7 per cent of production would have been 25,245 gigawatt hours and, in 2004, would have given us a target of 27,045 gigawatt hours. It is anticipated that 12.7 per cent of production in the year 2010 will be approximately 31,115 gigawatt hours and 37,465 gigawatt hours in 2015.

The government’s promotion of renewable energy for electricity generation was regrettably changed from the original growth target of 12.7 per cent to a static target, an increase of 9,500 gigawatt hours over what was produced at that time. This would mean an annual renewable output of around 25,500 gigawatt hours. The government is happy for industry to produce at the end of the 10-year promotion a total of 25,500 gigawatt hours. This is likely to be only 10.4 per cent of electricity production in 2010, an actual decrease in the proportion of electricity generated by renewable means from the original baseline proportion of 10.7 per cent in 1997.

The government is happy for its promotion of renewable energy to call for a decrease in the proportion of electricity generated by renewable means. That is some promotion. The government is also happy for the required amount to remain static throughout the next decade, with no required increase of renewable energy production over the current 9,500 gigawatt hour increase. This will result in a renewable energy target—if one can call it that—of 25,500 gigawatt hours in 2020. In the year 2015, it is expected that the target will deliver 8.6 per cent of total electricity generated, a decrease of 20 per cent of the 1997 baseline. Industry will meet the target—it is not hard to catch a dead rabbit—but that is hardly the point.

In 2002 it was predicted by the Business Council for Sustainable Energy that by 2010 we would only just be maintaining the proportion of renewable energy generated in 1996-97. The government appears to have lowered expectations, and probably future outcomes, thereby evidently realising its objective. What is worse than having a static target for 10 years of this promotion’s operation is having absolutely no expectation of growth in the subsequent 10 years of promotion from 2010 to 2020.

The government is confirming in this amendment bill that it has absolutely no expectation of industry to increase the proportion of power generated by use of renewable energy over its 1997 level. The government’s own white paper from 2004, Securing Australia’s energy future, identifies that demand for electricity will increase from 2004 levels by 50 per cent by 2020. The government knows its static target is effectively meaningless. The white paper also anticipates at least $37 billion in energy investments by 2020 to meet demand—investments that will be productive for 50-odd years, investments that this government is apparently quite happy to see ploughed into brown coal power generation, or similar, instead of any number of renewable technologies.

Limiting the target to the static 9,500 gigawatt hours this decade, and maintaining exactly the same quantity of electricity generation throughout the next decade, purposefully neutering the incentive to invest in renewable energy will, one can presume, lead to the opportunity created by mandatory renewable energy targets being squandered. The change from a growth target of 12.7 per cent of production to a static increase of 9,500 gigawatt hours after 20 years is an example of the billboard policy. A mandatory renewable energy target: it sounds great, it looks great up there in lights, and the government can say it is the first of its kind in the world. But it will also inevitably be the worst. Put a name like ‘mandatory renewable energy target’ on a billboard, authorise and print it, and forget about actually achieving anything. It is misrepresentation, nothing more, and it is such a waste of the opportunity given to this government by the Australian people.

This renewable energy promotional strategy is farcical. The government knows this. The government can only have designed the promotion strategy with this outcome in mind. How can anyone say that it is changing a growth target to a static target in terms of gigawatt hours, and pretend it is doing anything but pulling its head out of the harness it created for itself in 1997? Nevertheless, there may be some incredibly bright people pursuing substantial change regardless of the government’s target. I have heard of some examples. I have heard of some CSIRO scientists and the Queensland Centre for Advanced Technology producing solar turbine technology, which they think can store and produce power on a continual basis, overcoming the unreliability of solar and wind energy.

They believe it could replace coal-fired power stations in 20 years, which sounds miraculous, but apparently they cannot get sufficient financial backing within this country. I wonder why? According to a recent article, Queensland sustainable energy management consultant Mr Guy Lane has said that it has failed to generate interest among Australian investors, because they are more comfortable with traditional energy sources. Australian Business Council for Sustainable Energy Executive Director, Ric Brazzale, said one of the biggest barriers was the lack of political support. I would be keen to receive any background the Minister for the Environment and Heritage or fellow members may have on this project, and whether or not it is worthy of Australian investment. The article may sound far-fetched. It was by Ian Gerard of the highly reputable daily the Australian on 2 February this year.

I would like to acknowledge the leadership demonstrated by the Australian business roundtable on climate change. This group has members including BP Australia, Insurance Australia Group, Origin Energy, Swiss Re insurance, Visy Industries and Westpac. The roundtable commissioned CSIRO to quantify expected impacts of climate change on Australia, and commissioned Allen Consulting Group to assess the costs of substantially reducing our nation’s greenhouse gas emissions, both in acting toward this end sooner, and the costs anticipated if we act later.

The outcome of this research was that substantial reductions could be realised at an affordable cost by acting sooner. The longer changes take to be implemented and realised, the greater the increases in costs to business and the Australian economy at large. The government’s response toward such groups’ contributions will no doubt be one of indifference at best. The response of some government agencies and members of the public is more encouraging. For example, a constituent of the Hindmarsh electorate came in to see me recently. He is a firefighter and a really terrific bloke who has spent $20,000-odd of his own money, and thousands of dollars in rebates, installing a photovoltaic system in his home, courtesy of the Australian Greenhouse Office.

Photovoltaic means electricity from light. Such a system uses daylight to power ordinary electrical equipment such as refrigerators and lights. It is quite different, I understand, to the commonplace solar thermal technology used to heat water. The Photovoltaic Rebate Program commenced in January 2000 and offers a cash rebate of $4 per peak watt, capped at $4,000 per residential system and per school or community building system. This program was extended a year ago although, unfortunately, it is to be phased out in June 2007. It is unfortunate that such initiatives will not remain in place and available to greater numbers of Australian households who may become aware and convinced of such a scheme’s merits over time.

It is also unfortunate that the federal government’s interest is probably even lower in terms of carbon trading. It seems the government is saying: ‘It’s better to sit back and wait to see if everyone else will do it, making it inevitable globally. Europe may have started, but it is early days and results are mixed. There’s no rush; let’s wait and see.’ In contrast to this approach, New South Wales have developed their own scheme. In February 2005 New South Wales Forests was fully accredited as an abatement certificate provider under rule 5—that is, carbon sequestration of the New South Wales Greenhouse Gas Abatement Scheme. As a result, New South Wales Forests now has authorisation to create, register and trade New South Wales greenhouse abatement certificates.

New South Wales continues to be a pioneer in introducing carbon dioxide emissions trading and exploring methods to use forests for greenhouse-friendly products. The first carbon trades in Australia involved state forests of New South Wales working with Pacific Power and Delta Electricity. A subsequent carbon sink investment project has been announced with the Tokyo Electric Power Company. New South Wales Forests is developing a complete account of the carbon uptake and storage in relevant parts of its plantation estate, and is working to develop carbon accounting tools that could be applied throughout New South Wales, including in privately planted forests. So it is an exciting new era for those who grow forests. Now when we create a healthy forest, we not only receive a return for the wood products being grown, but may also benefit from trading in carbon credits.

The apparent view of New South Wales is quite distinct from that of the federal government. New South Wales holds the view that, although international trading systems for carbon dioxide emissions are still being developed and there is apparently no prospect of a national trading scheme while we have this federal government, there is growing recognition that Australia needs to act now to expand its planted forests and build a base that will make a real impact on the greenhouse issue. Everyone in this country bar the federal government is, I understand, in favour of a national carbon-trading system. I look forward to people such as the Premier of South Australia, Mr Mike Rann, leading the way, with NSW obviously at the cutting edge. I also look forward to the reforestation of—in some cases—increasingly degraded parts of South Australia, the creation of carbon sinks and the improvement that that will promote in the quality of the land.

We have recently heard that, within South Australia, a new $236 million, 45 wind turbine investment by AGL will not only make the Flinders Ranges wind farm the biggest in the nation but increase renewable electricity to 15 per cent of total state production. So what have the Rann Labor government done? They have increased their target for renewable energy from 15 per cent of total electricity production to 20 per cent within 10 years. It is quite remarkable to see the difference between Labor and coalition governments, to feel the enthusiasm for the growth of the renewable energy sector, on the one hand, and then, on the other hand, to reflect on the federal government amendment bill currently before the House.

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