Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rise to speak on the Renewable Energy (Electricity) Amendment Bill 2015. Firstly, by way of background, the previous legislation had our renewable energy target set at 20 per cent of our electricity production by 2020. I am not sure what the wisdom of 20 per cent by 2020 was, other than that perhaps it had a nice sound or a nice ring to it. The RET as modelled in the original legislation would have required 41,000 gigawatts of electricity to be produced to achieve that 20 per cent target by 2020. But this was just another example of the reasons we need to always be aware of economic modellers when they believe they can foresee the future. As economic modelling often is, this was, again, hopelessly wrong. They did not factor in the effect that schemes such as the RET, the solar subsidies and the carbon tax—all these wonderful so-called green schemes!—would have on the price of electricity.

In the decade between 1990 and 2000, we had a four per cent total increase in the price of electricity. But, since 2007 to 2013, the price of electricity for Australian consumers and Australian households doubled. There was a 100 per cent increase from 2007. If electricity prices double—surprise, surprise!—you will get some reduction in demand. That is exactly what happened. It looks like our electricity demand will actually be 20 per cent less than where we expected it to be by 2020. again, That is 20 per cent less than what the experts foretold.

Currently, we are generating around 18,000 gigawatts of what is classified as renewable energy. This legislation in front of us that we are debating here today proposes to reduce the target down from 41,000 gigawatts to 33,000 gigawatts. Effectively, here today, we are locking in the need for this country to build another 15,000 gigawatts of electricity by 2020, the majority of which will come from wind turbines. This will effectively require around 2,000 additional wind turbines to be built throughout our nation. Many members, especially on the other side, have spoken up and said how wonderful this is. I would suggest that we could perhaps share the joy. We could each volunteer to have in our electorates a proportion of those 2,000 wind turbines. Then we will see how many members of parliament are still standing up and saying how wonderful this idea is to roll out another 2,000 wind turbines throughout our nation.

Here is the kicker: we as a nation do not need to spend one additional cent on any electricity generation capacity because we have a market that is oversupplied at the moment. So by resetting the target to 33,000 gigawatts all we are doing is creating a taxpayer subsidised, make-work program for the wind industry. Despite some of the nonsense peddled during this debate, wind turbines are simply not a cost-effective way to generate electricity. No-one in this country would build a wind turbine unless they received some type of subsidy. Wind turbines do not run on wind; they simply run on subsidies.

I have heard during this debate that somehow subsidising wind turbines will make the wholesale price of electricity cheaper. But 'wholesale price' is a completely meaningless term. It is simply a single cost point along the supply chain which is meaningless. What counts are the cost of production and the retail price to the consumer. It is an absolute and complete delusion to believe that we can somehow reduce the costs of electricity by mandating a higher cost and a more inefficient form of production. That is why this target simply will not work. In short, this legislation will lock in $20 billion worth of malinvestment in wind farms rather than $30 billion. Just think for a moment about all the things we need to do in our nation. Think of the opportunities lost and what could have been done with that $20 billion that will be unnecessarily spent building 2,000 wind turbines around this nation.

During this debate I heard the member for Rankin waxing lyrical about our nation's investment in solar. I believe that sometime in the future solar electricity will have great potential in this nation. Currently, I understand that in some cases in remote locations where the cost of connecting to the grid is prohibitive stand-alone investments in solar can actually be economically viable today. But I suggest the member for Rankin take time to read the recently published report by the Grattan Institute on the cost to this nation of the various solar subsidies. The report revealed that there is a $14 billion asset transfer. It is a subsidy being paid by consumers who do not have solar panels on their roofs to consumers who do have solar panels on their roofs. So I say good luck to those who have taken up these schemes; they are getting a subsidy. But that subsidy—$14 billion of it—is being paid by the majority of citizens of this country who do not have solar panels on their roofs. The Grattan Institute found that, even if we make an allowance for the so-called climate benefits of solar, the costs outweigh the benefits by $9 billion. So the investment in solar in this country by 2030 will see $9 billion of our nation's limited and precious resources—excuse my language, Deputy Speaker Goodenough—simply pissed up against the window.

What has greatly concerned me during this debate, listening to speaker after speaker from the Labor Party, is how clueless those opposite are about how we create wealth and prosperity in this country. The one way you do not create wealth and prosperity is by mandating the use of or having a compulsory requirement for a higher cost method of production. That is how you destroy wealth. That is how you destroy our prosperity. Our wealth and our prosperity is created by entrepreneurs, mainly our small business entrepreneurs, taking risks, experimenting with new ideas, trying out new methods of production, creating new goods and services, and investing in productive assets.

What we are doing by this bill—legislating 20 per cent of our electricity; a total of 33,000 gigawatts—is going backwards in our nation's productivity. This is at a time when we need to be looking at how we can do things more productively. By locking in the construction of another 2,000 wind turbines, we are doing things that are less productive. That destroys our wealth and hampers our ongoing prosperity.

The other fallacy in this debate is that having all these subsidies will create all these wonderful jobs. Under this bill, for every job created, the cost of the subsidies is something like $200,000. That is a great idea. We could create many more jobs if the subsidies cost $200,000. But by building things we do not need, building things that are inefficient, we are simply costing this nation jobs. For every job we create through artificial schemes, through subsidies to build wind turbines, we are destroying more real jobs in the economy.

In this bill I note there is 100 per cent exemption for what are called emissions trade exposed industries. But that exemption merely exposes the fraud or stupidity of those who have talked up this bill. If the RET is really going to lower costs, why do we have the exemption? The exemption is there because this bill drives up the cost of electricity. If you exempt some industries from the harmful effects of the RET, others have to pay more. There are many unintended consequences of this bill, and time does not permit me to expand on them.

Many Labor speakers say the reason we need to have all these—and they deny the additional costs of them—is they deal with climate change. They believe that if we build 2,000 wind turbines across our nation somehow they will change the weather. In truth, the belief that building 2,000 wind turbines will change the weather is little different from those in primitive societies who believed we could change the weather by throwing 2,000 virgins down a volcano.

The first question we should be asking ourselves is: how much CO2 will we reduce by building another 2,000 wind turbines? It is worth noting that a 1,000 megawatt wind farm produces seven million tonnes of carbon dioxide in component construction and concrete, and it requires almost 100,000 truckloads of concrete just for the footings. Then the wind farms need a 24/7 backup of carbon-dioxide-emitting coal fired or gas fired power stations. It is a question about how much if any carbon dioxide emissions will be reduced.

If we are serious about taking steps to reduce our carbon dioxide emissions and our footprint—

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