Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

If anyone was inclined to believe this government had any intention of promoting the use of renewable energy then the terms of reference for the inquiry into the renewable energy target announced by the Minister for the Environment on 17 February—10 days ago—should disabuse them of that notion. A senior Liberal was more to the point when he recently told the ABC that the purpose of the inquiry was, 'Let's kill the RET.'

Given the extreme weather that we have been seeing—heatwaves, bushfires, drought—one would expect that any examination of the effect of the renewable energy target would see carbon dioxide emissions at the top of the list of the terms of reference. However, it is not there at all. We find, instead, is that the inquiry will focus almost entirely on the effect that the renewable energy target is having on power bills. Let me note that the Prime Minister pre-empted the findings of the inquiry by claiming that the RET scheme is significantly increasing electricity prices. He said in November last year:

… not only is the carbon tax adding about 9 per cent to everyone’s power bills, and we’re going to get rid of that as quickly as we can, renewable energy targets are also significantly driving up power prices right now.

This is a claim that we should examine. I invite the House and the Prime Minister to read the Australian Energy Market Commission's final report, for 2010-11 to 2013-14 on retail electricity price estimates. It stated, 'The impact of the carbon price at the national level is approximately six per cent in 2013-14.' The commission went on to state, explicitly, that the renewable energy target made a three per cent contribution to national price increases.

That report went on to detail the contributors to the national price increase in electricity for the years 2012-13 to 2013-14. The small-scale renewable energy scheme had a -0.8 per cent impact on prices. The large-scale renewable energy target had a 3.8 per cent impact on prices. The feed-in tariff and similar state based schemes had a 5.1 per cent impact on prices. The transmission system accounted for six per cent of the price increases. The retail side was 12 per cent of increases. The distribution side contributed 33.6 per cent and the wholesale side contributed 40.2 per cent. So, it is clear that the impact of the carbon price was minimal compared to the aggregate increase of 92 per cent for transmission, retail, distribution and wholesale costs. The real question is: if the government is genuinely concerned about the increasing price of electricity why has it set up an inquiry into the origins of the 3.8 per cent increase of the renewable energy target and overlooked the 90-plus per cent increase coming from other sources? By all means, let's have an inquiry into electricity prices but let's look at the real drivers: gold-plating of the poles and wires.

The Prime Minister is not alone in failing to read that report. There was a speech last year by the now Minister for the Environment, who said

According to the New South Wales IPART in the year just past we had an 18 per cent price rise in New South Wales electricity, of which nine per cent was the carbon tax—10 per cent on average around the country—and 0.3 per cent came from the renewable energy target ...

So, according to the environment minister, in June last year the renewable energy target added 0.3 per cent, or perhaps three per cent, to the price of electricity. Yet somehow, according to the Prime Minister in November, 'renewable energy targets are also significantly driving up power prices right now'. It is just nonsense.

If the claim that the renewable energy target is adding just 0.3 per cent or even three per cent to the price of power, what is the government's real justification for this inquiry? Indeed, there is research suggesting that renewable energy is helping to meet demand at peak times, such as during the recent heat waves, and therefore putting downward pressure on electricity prices. I congratulate the ACT government, which is far more forward looking, on the initiatives that it has just announced to lift the renewable energy target. It should be congratulated on its foresight and its commitment to giving us a liveable world in the future and not a world dominated by heat waves, droughts and bushfires. If the federal government wants to have an inquiry into electricity prices, I urge it to make sure that it is a serious inquiry that covers all the things that are impacting on electricity prices.

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