Melissa Parke (Fremantle, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the Australian Renewable Energy Agency Bill 2011 and the Australian Renewable Energy Agency (Consequential Amendments and Transitional Provisions) Bill 2011. Together they form part of the government's suite of policies designed to address climate change, to provoke and support innovation, and to guarantee our place in a burgeoning global renewable energy economy.

The main bill creates the proposed Australian Renewable Energy Agency, ARENA, whose role as an independent statutory body will be to provide independent administration of the support which government will provide to increase the competitiveness of renewable energy and, in so doing, to increase the supply of renewable energy. In that way, ARENA will deliver specific and targeted program assistance that will operate in addition to the two macroeconomic level incentives, namely, the price on carbon and the renewable energy target.

ARENA will be responsible for delivering financial assistance for the research and development, demonstration, commercialisation and deployment of renewable energy and related technologies. The ARENA (Consequential Amendments and Transitional Provisions) Bill facilitates the effective absorption into ARENA of the functions of the Australian Centre for Renewable Energy, ACRE, and the Australian Solar Institute, ASI, through the consolidation and streamlining for which ARENA is being established. As ARENA will come into existence on 1 July 2012, the transfer of assets, projects, personnel and so on from ACRE and ASI to the new ARENA structure is expected to occur in the second half of next year. As I have mentioned, ARENA will administer $3.2 billion in existing program funding, $1.7 billion of which is as yet unallocated, and the government is establishing ARENA on the basis of prescribed funding, out to 2020, for the sake of ensuring industry certainty and confidence. It is important, as we embark on this period of dynamic change in our economy, to remember that the pursuit of a strong and substantial renewable energy industry in Australia is based on a number of considerations. In the current public debate there is an understandably strong association between renewable energy and the problem of climate change, and it is well understood that non-renewable energy, which we derive from hydrocarbon fuels of one kind or another, produces carbon and other greenhouse gas emissions which are contributing to global warming and related climate effects. So, the more we employ renewable energy sources rather than non-renewable energy sources, the more we reduce our carbon emissions.

But the creation of a vibrant renewable energy sector in Australia offers a number of wider benefits. At the simplest level, a reduction in carbon pollution across the board will obviously deliver cleaner air, but there are also significant economic and energy security benefits that render nonsensical the outdated view of the pursuit of renewable energy as some kind of environmental imperative of marginal economic value. To take that view is to overlook perhaps the most important long-term reason for growing our renewable energy capacity and knowledge—that is that, even with considerable Australian and worldwide non-renewable resources available, those resources are finite and are being devoured at an ever-increasing rate. At some point civilisation will be forced to give up its reliance on cheap non-renewable energy, and those countries that not only begin that transition but become established as innovators and exporters in the renewable energy and energy efficiency fields will reap the employment and economic benefits that will come with successful early adoption.

There can be no question that many other countries understand the imperative to move into renewable energy, and this brings me to the main point I want to make, which is that Australia has the opportunity to be at the forefront of an industry that is already showing signs of being one of the fastest growing areas of investment and innovation.

In the course of the climate change debate over the last decade, there have been those who argued that, with Australia's abundant non-renewable resources, we have no need to move into renewable energy and, indeed, would be harming our existing carbon resource strengths if we did so. That is retrograde thinking, in my view. It is complacent, self-limiting, head-in-the-sand stuff. The world is shifting, because it must shift, and we have the chance to be a leading participant in change. We have the chance to be both a country that will benefit from a range of new technologies and one that is also very likely to be the source of inventions that will benefit the global community to which we belong.

On this last point, a recent report commissioned by the United Nations Environment Program and produced as a cooperative endeavour with the Frankfurt School-UNEP Collaborating Centre for Climate and Sustainable Energy Finance, and Bloomberg New Energy Finance, provides a very useful overview of the current state of global renewable energy investment, which is growing strongly. One of the most startling pieces of data in this report is that for the first time in 2010 more was invested on renewable energy in developing countries than in developed countries. In fact, financial new investment in developing countries totalled $72 billion as against $70 billion in developed countries. In 2004, the ratio was four to one in favour of developed countries.

China has led that surge, with nearly $50 billion invested last year to make it by far the largest source and location of renewable energy investment. But while China's investment, predominantly in the form of asset finance for large wind farms, jumped 28 per cent in 2010, financial new investment in South and Central America grew 39 per cent to $13 billion; and in the Middle East and Africa region, investment surged by 104 per cent to $5 billion. While this steep climb in global renewable investment is very welcome, it is also a reminder that the world is moving rapidly and that we would be fooling ourselves if we thought we were leading the charge or going out on a limb in this area.

Total global investment in renewable power and fuels reached $211 billion in 2010, a 32 per cent increase on 2009 and approximately 5½ times the investment made in 2004. In the report's foreword, Achim Steiner, the UN Under-Secretary-General and UNEP Executive Director, summarises recent progress by saying:

Renewable energies are expanding both in terms of investment, projects and geographical spread. In doing so, they are making an increasing contribution to combating climate change, countering energy poverty and energy insecurity, stimulating green jobs and meeting the Millennium Development Goals.

The UN climate convention in Durban later in the year, followed by the Rio+20 Conference in Brazil in 2012, offer important opportunities to accelerate and scale-up this positive transition to a low carbon, resource efficient Green Economy in the context of sustainable development and poverty eradication.

All of this is encouraging news because investment in renewable energy and related technologies is leaping ahead, even through a time of economic instability, and even in circumstances of constrained financial confidence and capacity. 2010 was also the first year that total investment in solar came close to matching the investment in wind, once you include the $60 billion in small-scale distributed solar capacity investment, up from $31 billion the previous year, much of which was concentrated in rooftop photovoltaics in Europe, led by Germany. That shows the wisdom of this government's historic support for household solar PV. Indeed, since the election of the Labor government in 2007, we have supported the installation of something like 150,000 household PV units at a rate of close to 40,000 per annum, which is in stark comparison to the former government's effort in supporting barely 12,000 in their 11 years in office. I know that in Western Australia, where the WA government has overseen a 50 per cent increase in electricity prices in three years, there are now thousands of households with the in-built capacity to better weather such costs.

The support provided by this Labor government has begun, quite literally, a transformation of the suburbs, so that solar panels on roofs are no longer novelties and, though still represented by a minority of houses, are now at least relatively commonplace. But as the household solar industry has become established, and with the combined effect of economies of scale, lower input costs and a high Australian dollar, the direct government support is being sensibly scaled back. That is the responsible approach: first, to turbocharge innovation and investment, and then retreat once the industry and market has become established, both here and globally. And, happily, it remains the case that a 1.5-kilowatt household solar system can be installed on the roof of most average Australian houses for around $2,000, with a likely capital payback period of between five and seven years.

The experience in Australia in terms of cost and price reduction through the strength of well-established industries and competitive market forces is reflected globally, with the price of PV modules per megawatt falling 60 per cent over the last three years according to Bloomberg New Energy Finance Estimates, and the price of wind turbines falling 18 per cent per megawatt in the last two years. This is the proof that investment in renewable energy development and commercialisation will in time provide energy source options that are increasingly cost competitive with non-renewable sources. But the investment and the regulatory support is essential if that is to occur.

It stands to reason that the recent vertiginous jumps in the cost of electricity will be retrospectively attributed to the carbon price, though it will be cravenly dishonest for anyone to do so. The reality is that the government's Clean Energy Future policy will provide the investment necessary to spark Australian innovation in new sources of energy and new energy frameworks, with better long-term outcomes for Australian households than would be possible if we took a do-nothing approach and allowed Australia's renewable energy sector to lag in the wake of what is occurring elsewhere.

I have spoken before in this place about a company in my electorate, Carnegie Wave Energy, which has pioneered a wave-power technology using specially designed buoys that are anchored to the seabed and generate both emission-free electricity and emission-free desalinated water from the ocean's movement. Carnegie already has a commercial-scale demonstration of its technology on the seabed in WA's Cockburn Sound, and is pushing ahead with agreed projects in Ireland, Bermuda and Reunion Island. The Irish wave energy project, as one example, is a proposed five-megawatt demonstration project for which the conceptual design and site study was 50 per cent funded by the Irish government's Sustainable Energy Authority under the Ocean Energy Prototype Research and Development Program. This is the kind of forward-looking and supportive approach that Australia has embarked upon, and I am sure that companies like Carnegie Wave Energy will look to the opportunities provided through the creation of ARENA in order to expand and leverage the success they have already achieved.

There can be little doubt that the global economy is on the cusp of an energy profile transformation and that many countries, developed and developing, are working to establish footholds in this critical sector. Australia has a role to play, both on its own behalf for the benefit of Australian jobs and energy security and as part of our historic role as an innovator—as a country that has delivered, for the world's benefit, advances that go back to the Westinghouse air brake, the first invention to be granted an Australian patent, and of course include recent inventions like the cochlear ear implant, the cervical cancer vaccine, and CSIRO's wi-fi technology. Renewable energy and related technologies represent an opportunity that must be embraced—and this is a government that is intent on seizing that opportunity or, rather, on opening up a window through which Australian companies can take their part in one of the most important, exciting and innovative areas of human endeavour and industry. As we look forward to the visit by the President of the United States, it is timely to consider the approach being taken in this area by the world's largest economy. In June last year, President Obama spoke about the clean energy challenge. He said:

For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we have talked and talked about the need to end America's century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked not only by oil industry lobbyists, but also by a lack of political courage and candour.

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We cannot consign our children to this future. The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash American innovation and seize control of our own destiny.

This is not some distant vision for America. The transition away from fossil fuels will take some time, but over the last year and a half, we have already taken unprecedented action to jumpstart the clean energy industry. As we speak, old factories are reopening to produce wind turbines, people are going back to work installing energy-efficient windows, and small businesses are making solar panels. Consumers are buying more efficient cars and trucks, and families are making their homes more energy-efficient. Scientists and researchers are discovering clean energy technologies that will someday lead to entire new industries.

Each of us has a part to play in a new future that will benefit all of us. As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of good, middle-class jobs but only if we accelerate that transition. Only if we seize the moment. And only if we rally together and act as one nation workers and entrepreneurs; scientists and citizens; the public and private sectors.

It is an essential part of the Labor ethos that a strong economy should be the foundation for positive long-term reform. These bills, which go hand in hand with the clean energy future package, are very much consonant with that ethos. It is a characteristic feature of Labor governments that we take on the difficult big-picture structural changes that are necessary to put Australia on the path to prosperity with fairness, to productivity that is sustainable and to a social and physical framework for our communities that in the face of future challenges is optimistic but realistic at the same time. These bills are part of that task which I wholeheartedly support.

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