Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Hansard source

in reply—I seek to make a few comments in response to the issues raised by the members for Groom, Wills, Moreton, Oxley and Dawson during this debate. In doing so, I also express my appreciation for their contributions to a very significant and ongoing process of reform in the operation of the national electricity market in Australia. By way of background, I brought this bill to the parliament with the support of my colleagues on the Ministerial Council on Energy, representing all state and territory ministers in association with the Commonwealth, for the purpose of continuing our progress towards the creation of an efficient and effective national energy market. At this stage, I would also like to table some corrections to the explanatory memorandum which have been circulated and conveyed to the member for Groom, the shadow minister for industry and energy, Mr Macfarlane. I thank the House for its cooperation on that front.

In passing the Australian Energy Market Amendment (AEMO and Other Measures) Bill 2009, the House will play an important role in facilitating the cooperative approach by the Ministerial Council on Energy to national energy reform. Lead legislation to be enacted in South Australia will see essential functions conferred on the Australian Energy Market Operator. This lead legislation will amend the National Electricity Law and the National Gas Law, and it will then be applied in all remaining jurisdictions, excluding the Northern Territory and Western Australia, through legislation to be known as the application acts. AEMO will assume the functions carried out by the Gas Market Co. in New South Wales, the National Electricity Market Management Co., the Victorian Energy Networks Corporation, the Gas Retail Market Operator in Queensland and the Retail Energy Market Co. in South Australia. The Australian Energy Market Operator legislative package is itself currently the subject of a rigorous consultation process engaging all relevant stakeholders. The Australian Energy Market Operator Implementation Steering Committee of the Ministerial Council on Energy has sought stakeholder comment and will be finalising legislation in the near future, taking into account this input.

The bill that the House has been debating amends the Renewable Energy (Electricity) Act 2000 and the Trade Practices Act 1974 to replace references to the National Energy Market Management Co. Ltd with the Australian Energy Market Operator Ltd. The bill also makes minor amendments to the Australian Energy Market Act 2004, the Administrative Decisions (Judicial Review) Act 1977 and the Trade Practices Act 1974 to ensure that those acts correctly reference Western Australian legislation which will apply to the Commonwealth’s offshore area, with Western Australia adopting elements of the National Gas Law.

In summary, passage of this bill, which makes minor technical amendments to Commonwealth legislation, will allow for the smooth implementation of the cooperative energy reform agenda. This bill has the full support of all my state and territory colleagues on the Ministerial Council on Energy. For the purposes of the record, I will also comment on a couple of issues raised in the contributions of a range of members, including the members for Groom, Wills and Dawson. I firstly express my appreciation for the support for this bill of the opposition and of the member for Groom in his role as the shadow minister and as a former energy minister and member of the Ministerial Council on Energy. More generally, I acknowledge the role played by all other state and territory ministers in progressing energy market reform. In doing so, can I say that the member for Groom correctly identified the role that the Ministerial Council on Energy has played over many years in pursuing energy market reform, with the creation of AEMO being an important reform. On that note, with respect to the issue of the Australian Energy Market Commission’s Review of energy market frameworks in light of climate change policies, I want to assure the House and the Australian community that this is not a politicised review but a serious look at the impact that climate change policies will have on the energy market. It is a matter of serious concern to the Ministerial Council on Energy and it is being taken seriously through the AEMC’s market review.

I also note the comments of the member for Groom about the failed privatisation process in New South Wales. For the purpose of the record I want to clearly indicate that the Commonwealth, through comments made not only by me as the Minister for Resources and Energy but also by the Treasurer and the Prime Minister, gave full support to then Premier, Morris Iemma, in his endeavour to bring the New South Wales electricity market into the 21st century. I think it is appropriate that for historical purposes the position of the government across the board be placed on the record in response to the remarks made by the member for Groom, which were far from correct or accurate in the context of that very tough and serious debate.

I also note the contribution to the debate of the member for Wills. Can I say that often when residents are, as he said, ‘excited’ by electricity it is because supply is interrupted. We saw that with the recent difficulties in both South Australia and Victoria following the heatwave earlier this year, with load shedding put in place for the purpose of the integrity and security of the national energy market. I simply say that, as the minister for energy, I am quite happy to take that excitement out of the equation, provided electricity is supplied to households in a reliable, efficient and cost-effective manner.

In the context of a cost-effective manner, I refer to the comments of the member for Wills on feed-in tariffs. The government’s policy—and the member for Wills is a member of the government—is to encourage the rollout of: renewable energy through our 20 per cent renewable energy target, which is quite an ambitious target; the $500 million Renewable Energy Fund, which is now out for competitive bids; and the $150 million Energy Innovation Fund. That also includes the Solar Institute that opened in January this year in Newcastle, representing cooperation between CSIRO and a number of universities, including the University of New South Wales and the ANU.

With respect to those renewable energy grants, I encourage all those who are interested in competing to actually establish commercially demonstrable opportunities and to have discussions with the department for the purposes of trying to make sure that they are part of the process, and then on merit we have a capacity to select the best possible demonstration opportunities from a renewable energy point of view for the foreseeable future. But, having said that, can I say on behalf of the Commonwealth government that it is not our position to introduce a national feed-in tariff, with the mandatory renewable energy target achieving renewable rollout at a lower cost than prescriptive feed-in tariff schemes.

Reference was made to Germany’s solar subsidy, but let us deal with a few facts. That scheme is not cheap. That scheme saw around half of one per cent of Germany’s gross electricity consumption come from solar PV in 2007. As to the cost—and this is where consumers actually get excited—it is interesting to note that German consumers that year paid more than €1 billion in additional power bills to cover the cost of that excessive German government policy. That is more than $2.5 billion in one year. Feed-in tariffs, so far as the Commonwealth government is concerned, have a number of unintended consequences, and the position that we have advanced with our renewable energy target of 20 per cent, in association with Commonwealth dollars to encourage the development of the renewable energy industry, is a far more comprehensive and well-thought-out position than the ill-thought-out position of the German system.

I simply say that artificially pricing one source of energy 300 or 400 per cent higher than others—including other renewables, I note—could divert investment from technologies that might in fact produce better environmental outcomes at lower cost. Solar PV is interesting but I must say that potentially more interesting from a baseload point of view are solar thermal and geothermal industry developments because they are about reliability and the question of consumers not getting excited because of a lack of reliability in the functioning of the national energy market. So let us focus on a real, practical debate rather than ill-thought-out policies pursued by some minor parties in Australia.

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