George Christensen (Dawson, National Party) Share this | Hansard source

I note that the previous speaker, the member for Rankin, boasted of the Labor Party being the party of renewable energy. Given that renewable energy only exists in this country in the way it does through subsidies and government welfare, and that the Labor Party is the party of welfare, it is a neat match. We have heard from the member for Canberra that they plan to do more. They plan to ratchet up the amount of subsidies going into renewable energy, with the cost of power being driven up as Labor seeks to expand this sector, which is all subsidies.

Before I speak on the Renewable Energy (Electricity Amendment) Bill 2015, I want to address the changes that this bill will implement, and I want to preface those remarks by noting that a great deal of compromise has gone into achieving this negotiated agreement. This bill will make a number of key changes to the Renewable Energy (Electricity) Act 2000. It will adjust the large scale renewable energy target to 33,000 gigawatt-hours, in 2020. It will change partial exemptions to full exemptions for emissions-intensive trade-exposed activities. I note that the member for Rankin tried to claim this as a Labor Party feat, but part of the reason we went into this review was to give a reprieve to these industries. These trade-exposed emissions-intensive industries were copping it in the neck from high electricity prices caused by the carbon tax and the renewable energy target. It is certainly not a Labor feat, but one that the Liberal-National coalition has achieved because of this review. It will change partial exemptions for those industries to full exemptions. It will reinstate biomass from native forest wood waste as an eligible source of renewable energy.

This bill removes the biennial review—sadly, I have to say. I know the Labor Party and their Greens mates were very keen to see the back end of those reviews, and it begs the question: what exactly were they afraid of with the review? They tell us, ad nauseam, how great renewable energy is. They tell us it is a growing industry and creating all these mythical green jobs. But if renewable energy is such a wonderful thing, and if it is so efficient, then why would they not want it be reviewed every two years?

Are they afraid the review will show renewable energy to be not the raging success they think it is? I think they are afraid the review will highlight what a disastrously expensive indulgence it is, because the renewable energy target has already been reviewed. The Warburton review reported, and a key finding of the review was that:

In the presence of lower cost alternatives, the costs imposed by the RET are not justifiable.

Let me repeat that for the Labor Party: in the presence of lower cost alternatives, the costs imposed by the current renewable energy target are not justifiable. The Warburton review reported that the RET was an expensive means of reducing emissions because it failed to directly focus on emissions reduction and related only to electricity generation. Between 2014 and 2030, the cost of carbon abatement is estimated by the Warburton review to be between $32 and $62 per tonne for large-scale renewables. In small-scale renewables, the cost is even more outrageous, at between $95 and $175 per tonne of abatement.

One of the problems that this bill will address is the distortion caused by a changing market. As highlighted in the energy white paper, we have an oversupply of electricity generation capacity, when demand has fallen by an average of about 1.7 per cent per year from 2009-2010 to 2013-14. To allow for a changing market, this bill will reduce the large-scale renewable energy target from 41,000 gigawatt hours in 2020 to 33,000 gigawatt hours. The bill also changes the annual targets so that the 33,000 gigawatt hours in 2020 remains the target until 2030. These new targets address the fact that declining activity in the industrial sector and increasing energy efficiency have driven down demand. The changing target balances, on one hand, the desire to encourage investment and to reduce emissions and, on the other hand, the need or the absolute necessity to keep electricity prices down for consumers.

I note there is another section of this bill that the Labor Party says they no longer agree with, and that is reinstating biomass from native forest wood waste as an eligible source of renewable energy. I say 'no longer' because at one time they did agree with it. I was on the Labor dominated committee chaired by Dick Adams where a recommendation was made to the previous parliament that native forest wood waste be eligible as a source of renewable energy. The inclusion of native forest wood waste was in Labor's own legislation until November 2011.

The Liberal National government made a commitment at the last election that we would reinstate wood waste as an eligible source of renewable energy under the RET. In doing so, we were basing eligibility on exactly the same conditions that were in place under the Labor government. The whole idea of the RET is about support for additional renewable energy generation that is sustainable. Wood waste is a renewable energy source, and there is no evidence that it would lead to unsustainable practices, nor would it have a negative impact on biodiversity. In fact, the supply of wood waste as a fuel would have to work within the processes of Commonwealth, state and territory approvals. If burning wood waste to generate electricity is more beneficial for the environment than burning the waste alone or simply letting it decompose, how can Labor justify ruling it out?

The position Labor, the Greens and others in the same field have taken on this issue has been to block anything that would make energy cheaper and to search for ways that are going to make it more expensive because Labor and the Greens do not care if it costs more money. In fact, they want it to cost more money. Labor wants it to cost more because they are happy to keep borrowing money until they send this country broke. And what of the Greens? Well, the Greens do not believe in money. What the government has done is inherit a Labor Greens scam. It has made the most of the hand it was dealt, and credit is due to the government for limiting the damage and salvaging industry wherever it could.

But the reality is that the renewable energy target is a government mandated system designed to cost more. It is one viable sector of the industry being forced to prop up an unviable sector. There are many ways to generate electricity out there. The cheapest, the easiest and the most efficient is coal—coal fired power. In fact, the only way to generate reliable baseload power in this country is through coal fired power stations. There are other ways of doing it: nuclear, but we do not want to talk about that; or hydro, but, no, the Greens will not allow that either. There are the expensive ways of producing electricity, like wind or solar.

There are two problems, though, with wind and solar. They are intermittent and they are expensive because the wind does not always blow and the sun does not always shine. So it is necessary to have an alternative baseload generator. The baseload generator must be operational 100 per cent of the time because you cannot rely on wind and solar. So right from the get-go you are paying for two power sources when the cheapest one on its own could do the job.

When they introduced the job-destroying carbon tax—which they promise to bring back after the election if they are in, if they are given the chance—they droned on and on about green energy and green jobs. But their sermons never touched on how expensive that energy or those jobs would be. More important than what they said is what they did not say. They do not mention reports like the November 2014 report by Euan Mearns of Energy Matters, which concluded that renewable energy subsidies amount to 94 per cent of the value of the energy produced. Because the RET has forced Australia to use more expensive power generation, we all must pay more for power.

The Labor Party, during debate on the cataclysmic disaster that was the carbon tax, insisted that only the big polluters pay. The argument did nothing but confirm their own ignorance of anything to do with business or the real world. Any business that was forced to pay the carbon tax was forced to pass it on if they wanted to stay in business, and the same outcome applies to the RET. If we insist on using more expensive electricity, then someone has to pay that extra expense, and that someone is the end user: mums and dads and families around Australia. Every time they turn on the light, they are paying for the electricity, plus they are forced to pay more for more expensive electricity. Every time they cook dinner, have a shower, go to the fridge or watch television, they are using electricity that is much more expensive than it should be because of the RET. In some business operations, it is impossible to pass on that extra cost because there are other businesses in other countries that are not forced to use a more expensive means of electricity generation. So the RET places those businesses in an uncompetitive position. When the largest item of expense for a business is electricity, they are placed in an untenable position. They suffer massive cost blow-outs and will never be able to compete with a business that does not have that cost. That is why the government should be applauded for including in this negotiated agreement the raising of partial exemptions to full exemptions for businesses in that situation.

I am very pleased to say that that full exemption for emissions-intensive trade-exposed industry is very good news for a business like Sun Metals, a zinc refinery in my electorate up near Townsville. The refinery was built in 1996 by Korea Zinc, which produces 10 per cent of the world's zinc. Sun Metals is one of the most advanced plants in the world and one of the largest zinc refineries. It employs about 400 people. When massive cost increases were imposed upon the industry through schemes like the RET, and through Labor's other famous act of economic self-harm, the carbon tax, it was jobs like those that were put directly at risk. North Queensland is doing it fairly tough at the moment. Jobs are harder to come by since the downturn in the resource sector. The last thing we want is to see another carbon witch-hunt put 400 families out of work.

In conclusion, I want to address some of the fantasies that surround this mythical 'clean energy'. If you took the headlines at their face value, you might fall into the trap of thinking that families and business would be better off with renewable energy. For instance, consider a Worldwatch Institute article headlined, 'Renewables becoming cost-competitive with fossil fuels in the U.S.' These are the sorts of headlines that the Labor Party and the Greens love to promote and trumpet. If renewables are cost-competitive with coal, I ask: 'Why do they need subsidies? Why do we need any renewable energy target? Why do we need a government-imposed mandate at all?' But do not look at what they say; look at what they do not say—or at least read beyond the headline.

For example, there was a New York Times article from November last year headlined 'Solar and wind energy start to win on price vs. conventional fuels'. That sounds fairly promising. It even goes on to talk about:

… several companies signing contracts, known as power purchase agreements, for solar or wind at prices below that of natural gas, especially in the Great Plains and Southwest, where wind and sunlight are abundant.

But here is the kicker:

Those prices were made possible by generous subsidies …

And it goes on:

Both industries have managed to bring down costs through a combination of new technologies and approaches to financing and operations. Still, the industries are not ready to give up on their government supports just yet.

Already, solar executives are looking to extend a 30 percent federal tax credit that is set to fall to 10 percent at the end of 2016. Wind professionals are seeking renewal of a production tax credit that Congress has allowed to lapse and then reinstated several times over the last few decades.

In another article—one by Joel Hruska on the ExtremeTech site in December last year—it is a little bit more upfront. The headline declares, 'Solar and wind power are now fully cost competitive with fossil fuels—is it time to switch over?' But in the very first line the story says:

Renewable energy production has boomed across the globe in recent years, driven by improvements to solar and wind turbines, increased economies of scale, and in some cases, significant government subsidies.

They are right when they say that the Labor Party is the party of renewable energy, because renewable energy relies heavily on welfare and subsidies. And Labor is the party of welfare and subsidies.

I congratulate the government on what it has been able to achieve here in making a silk purse out of a sow's ear. I do commend this negotiated RET agreement to the House. I look forward to its passage in the Senate. And let us hope that some sense is retained here with the biomass wood waste being included in the final bill.

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