Chris Hayes (Werriwa, Australian Labor Party) Share this | Hansard source

I welcome the Renewable Energy (Electricity) Amendment Bill 2006. Renewable energy is an increasingly important source of energy for securing Australia’s energy needs. Energy in all its forms is the lifeblood of a modern economy. It is an essential ingredient in the production of just about every good and service that you can imagine. Electricity itself has fast become a consumption good.

I also welcome the second reading amendment moved by the member for Grayndler. It is important that, in any debate about the security of Australia’s energy future, consideration is given to the impact of energy consumption on the environment. It is important that both sides of the energy equation—production of and demand for energy as well as its environmental impact—are always considered. I will return to some of these comments a little later.

The bill we have before us today seeks to introduce a time limit following the renewable energy generation, during which renewable energy certificates for that generation must be created. The bill also enhances the market transparency by allowing for the publication of additional data relating to renewable energy generation, the baseline allocated to power stations that were in operation prior to the announcement of measures and the additional information on the liable parties’ renewable energy certificate shortfalls. Quite frankly, they are very important. But this bill also provides the opportunity for the participation of bioenergy and solar energy technologies to access renewable energy certificates—again I would say a very important development.

The size of the contribution of renewable energy production to Australia’s total electricity supply is relatively low. That stands to reason, given the abundant supply of coal that we have available to us in Australia. In fact, in 2004 the bulk of Australia’s electricity was generated by burning coal. Black coal production at that stage was responsible for about two-thirds of Australia’s electricity demand, and brown coal was responsible for supplying about a quarter of the country’s electricity demand. Less than one per cent of Australia’s electricity, according to the Electricity Supply Association of Australia, was generated from oil or other sources.

It is disappointing that this bill seeks to change only the administrative arrangements associated with renewable energy. It is also disappointing that the government has acted to gag this debate, because the renewable energy sector investment that is needed, the benefits that can be achieved and the difficult issues that need to be considered with climate change and energy security are not being treated with the level of seriousness they deserve. I do not know whether it is a product of the government’s single-mindedness when debating Australia’s energy future or just some dislike for the renewable energy sector, but it seems to have some sort of objection to providing any sort of support for this industry.

One thing is looking reasonably certain when it comes to the government and debate about Australia’s energy future: the government is pretty willing to put all its options in one basket. When the government first announced the mandatory renewable energy target in 2002, it was set up as a percentage. In fact, in his second reading speech, Minister Campbell said:

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 generation.

From its earliest form, the MRET worked or at least it seemed to work. The renewable energy sector got off to a flying start. Investments were made. Not all those who had participated in that industry did so successfully, but funds were being committed and investments were being made. For the first time, the MRET at that stage was target based. It was very clear that the targets had to be met in terms of generating tradeable certificates, because they were underpinned and supported by a penalty regime. I have to admit that it was an innovative policy and, as I understand it, a policy that was adopted by many other countries. The MRET provided for the entry of a policy instrument that provided an environmental solution in a national energy market. That is not an insignificant step, and I am sure most people would agree. But obviously things change, particularly the design of the MRET scheme. As I said initially, the MRET scheme was originally conceived as a market share target, but it is now more like a gigawatt hour target. As some people have said, once this happened it became almost a dead target.

A fixed target such as a gigawatt hour target cannot of itself act to increase the market share of renewable energy sources accounted for, as all a fixed gigawatt hour target will allow us to achieve is renewable energy to at least keep pace with growing energy demands—not exceed them, not to make inroads into them but to just keep pace. The MRET has enabled further development in an innovative industry and one that makes a significant contribution to the Australian economy. I can attest to that on a personal basis, having worked with a company which was very dependent on generating energy tradeable certificates in order to commit funds from their investors to renewable power generation.

Despite the advances in renewable energy development, this government risks stagnation of the entire industry. Australia risks falling behind its global competitors when it comes to addressing the energy challenges of the future. Australia also risks stagnating industry, its capabilities, its technology, its skills and its intellectual property. Despite getting off to what I consider to be a good start, when it comes to the renewable industry sector the government’s failure in energy policy poses a serious risk not only to the future of the Australian renewable industry but also to Australia’s energy and electricity future.

It is important that Australia can stand on its own two feet when it comes to the production of electricity not only to support our lifestyle but to support our economy. It is disappointing to see that, with so many other technologies on offer and so many other options for the ongoing supply of electricity in Australia, the Prime Minister and his government are wedded to only one. It is disappointing that the Prime Minister is wedded to a position whereby he is not prepared to ratify the Kyoto protocol. He continues to cling to the argument that meeting those requirements will be damaging to our economy yet, when he addressed the Asia-Pacific climate pact, he indicated that Australia can achieve the same outcomes as Kyoto without damaging the economy. When you consider both approaches, it does not lend itself to making a great degree of sense. The government cannot work out whether it is Arthur or Martha when it comes to climate change, as long as we have nuclear power in Australia. A Labor government would provide the leadership to protect the environment and Australia’s future.

This government is ignoring other technologies available to us that should be part of a general suite of solutions to our energy future. Technologies such as geosequestration—the process of carbon dioxide capture from power generation processes and storing it underground—is not being taken seriously by this government. Australia has huge resources of coal and a huge power-generating capacity invested in the coal industry.

As I noted at the outset, power generated from coal accounts for nearly two-thirds of Australia’s power demands. Geosequestration is already occurring in other parts of the world and has been for quite some time. It is my understanding that it might not be economical right here and now in Australia, but it has to be considered economical or, at least, essential in the not too distant future. We need to constantly address and achieve energy security in this country. Importantly, we have to have a vibrant energy policy which looks at not only demands and supply but also, as I indicated earlier, its impact on the environment.

Australia has an abundance of coal resources—as I understand it from publications I have read, about 800-years supply—yet coal and clean coal technologies are not being considered by this government as part of a suite of technologies that are available to secure Australia’s energy future. Coal will remain the dominant source of power generation in this country for some time to come. That is why it is so important that cleaning up coal is not dismissed as simply pie in the sky. Geosequestration, gasification and other technologies present opportunities to expand the supply opportunities available to us, while taking positive steps to address climate change.

In the very short time that I have left, I would like to acknowledge the contribution today of the member for Batman, who sought to introduce into the debate Australia’s energy security, particularly as to how we should extend the argument to transport fuels. I could not agree with him more. All members in this place know the pain that our constituents are currently feeling at the petrol pump. Every week the price of petrol seems to go higher. In fact, only yesterday a poll was released that indicated that the price of petrol has had a dramatic impact on the spending habits of Australians.

See this speech in context