James Stevens (Sturt, Liberal Party) Share this | Hansard source

had to be dropped out of the system, again because there was no reliability in the system. What was the state Labor government's response to that? They went out and purchased 300 megawatts of diesel generation to install in South Australia—that's right, dirty diesel was purchased by Labor to patch up the disastrous circumstance that they had created in the South Australian electricity grid. Labor were proud of the fact that they were putting gas generation into the South Australian grid. Gas generation in South Australia was the proud policy that Labor took to the 2018 state election. Diesel and gas were invested in by the taxpayer in South Australia because it had been Labor's policy and Labor's position that diesel and gas were required to support the intermittent wind and solar generation installed in South Australia. I'm a supporter of wind, I'm a supporter of solar and I'm a supporter of transitioning away from fossil fuels. We need to have a plan to transition. If we don't have a plan, what happened in South Australia in 2016 and 2017 will happen in all the other electricity markets across this country. That's what underpins the policy principle of what we are achieving through the bill that is before us right now.

We have an enormous amount of intermittent electricity in South Australia, and we have had to rely very regularly on importing electricity from Victoria. We have plans to build an interconnector into New South Wales to almost double the capacity of energy that can be imported and, hopefully in the future—more importantly—also exported. Interconnectors have the ability to do both. But the reason we needed to pursue the policy of a New South Wales interconnector was to ensure that we never again got into the situation we were in five years ago in South Australia. This allows us to chart a sensible, safe, stable, reliable pathway to emissions reduction in this country, not just in my home state of South Australia but everywhere across the country. As we expand our installed intermittent renewable technology, it needs to be firmed up. We need reliability. In the future that will absolutely come through zero-emissions base-load technologies, and we have some of them already operating in this country—pumped hydro, other hydroelectric sources and so on and so forth. But it's simply not possible to embrace renewable intermittent generation, as we should, without having the ability to firm it up. No Australian would accept putting anywhere else in the nation in the same position that South Australia was in in 2016 and 2017.

There are a few excellent things that the CEFC has been doing in South Australia that I'm really proud of. One is the Home Battery Scheme, which is a partnership between the Morrison government and the Marshall government. This is allowing us to support households to purchase and install batteries, where they have household solar. In fact, if they don't yet have household solar, they can install both the solar panel system and the battery system. That obviously creates the ability for households to generate electricity and use electricity at different times. With solar, much like wind, this is absolutely vital. There's no point generating electricity that can't be used, while the sun is shining and we're not at home. Equally, it's a waste if we're not able to access any of that unstored energy in the evening, when we turn on the television, the oven, the dishwasher and the washing machine. Home-scale battery storage means that you can generate electricity, store it and use it when you need it. In fact, in an even more sophisticated way than that, you can actually sell it back into the grid, if you want to, or you can use it to charge your electric vehicle overnight while it's sitting in your garage. This partnership between the CEFC and the South Australian government is allowing so many people to reduce their electricity bills and reduce their emissions. That's probably the perfect example of exactly what a partnership between something like the CEFC and consumers can achieve. We want to see a lot more of that, but it is absolutely vital that we are remembering that, whilst renewable energy technologies are being embraced and invested in—and the private sector is leading that—in South Australia there are times now where we consume the entirety of our electricity demand from renewable energy, and that's a really good thing. We have the installed capacity across wind, in particular, but wind and solar together provide for the electricity needs of South Australian consumption on a regular basis. But of course that is completely underpinned and supported by the peaking gas generation that we have available to us in South Australia and the ability to bring energy in from Victoria and in the future, hopefully, New South Wales. So, although we can generate all the electricity requirements from renewables at times, there are equally other times when we can't generate any at all. It's not the position of the average South Australian that they're happy to have no electricity if the sun isn't shining and the wind isn't blowing. That's patently ridiculous.

As other technologies are developed into the future, particularly from a storage point of view, and storage technology expands, we, of course, hope to be able to store a lot more of that intermittent energy not just at the household level, as I outlined before with programs like the home battery one. Of course we've got the Tesla facility at Hornsdale in South Australia. That's the biggest battery in the world and yet it doesn't have the capacity to provide significant grid contribution. It's excellent for frequency support and it's good to have as part of the mix; however, the technology needs to develop much more than currently exists from batteries of that type to be able to have a significant capacity to store and inject into the market the type of voltage and wattage that could possibly replace something such as peaking gas capability.

In South Australia, gas has replaced coal. We don't have any coal generation in South Australia anymore, and people can argue as to whether the way in which we transitioned away from sovereign coal generation capability in South Australia could have been managed better—and I alluded to the worst example of the mismanagement of that. I am quite comfortable with the fact that we don't have coal generation in South Australia anymore, and I wouldn't support in any way proposals to build any new coal generation in South Australia. But what has replaced that coal generation has been a combination of renewable energy, particularly from wind farms, as I've said, which at times can provide almost the entirety of South Australia's consumption needs. However, it is supported by peaking gas capability that is effectively key start and can be turned on when needed to fill gaps that might occur because, for example, weather patterns might change and the wind that was providing the fuel source to the turbines that are generating that wind electricity is no longer available. In South Australia we have this from natural gas. I hope that the interconnector that will be built between South Australia and New South Wales can change that dynamic significantly. It will mean that we won't need as much peaking gas capability in South Australia if we can potentially import, when needed, an extra 750 megawatts of electricity from the New South Wales market much like we can bring in around 800 or up to 850 megawatts from the Victorian market through that interconnection. That will allow us in South Australia to export much more renewable energy than we can simply consume to use domestically in South Australia.

Until 25 years ago, South Australia was always a net exporter of electricity generated in South Australia to other states. We want to get back to being an energy exporter, and in South Australia we can because there's enormous capability for more installed renewable energy capacity across the state in wind and solar. There are other technologies, obviously, that we are developing and we equally hope in South Australia to be a major producer and exporter of green hydrogen. We hope to produce and export green steel from the Whyalla plant steelworks. All these opportunities will only come if we have a transition in place.

If we thought in South Australia we could switch off all of our gas capability and operate off only intermittent renewable energy sources like wind and solar at the moment whilst technologies are still developing then those industries and those opportunities would collapse and there wouldn't be the investment appetite whatsoever for people to do what I know they will do if we have a proper plan to transition, which is invest more in wind, in grid-scale solar and in other grid-scale renewable zero emissions technologies, with the opportunity not just to sell in South Australia but to export into other states and through the National Energy Market. But that is only going to be possible if we've got stability and reliability in the grid.

That's exactly what this bill will deliver. It will give us the ability to bring industry certainty and investment certainty to the energy market across the country. That is going to benefit not just my home state of South Australia but all the participants in the National Energy Market and, of course, the others that are not in that grid in Western Australia and the Northern Territory. That investment certainty extends to industries that obviously must rely on reliable electricity. In my home state of South Australia, we have three major smelters—the steelworks at Whyalla, the lead smelter at Port Pirie and up at Olympic Dam the copper uranium mine has a significant smelter as well. They all need reliable electricity and they need a reliable grid without the risk of what happened in South Australia significantly in 2016 but also more regularly with load-shedding events because we didn't have that firmness underpinning that intermittent generation.

This is what the Morrison government is delivering through this legislation. This is giving the CEFC the ability to make sure that, whilst they're supporting clean energy projects in this country, they're also supporting the transition so that we don't have unintended consequences from an overinstallation of intermittent renewable energy that drives base-load providers out of the market because they can't compete against renewable energy at certain points in time and are selling into the market at nothing or negative and therefore get driven out of the market and, when we need them, because the reliability isn't there through intermittent energy they're not there because there was no transition in place to make sure that intermittent electricity was underpinned by the stability that you get from base-load generation. That obviously needs to include technologies beyond renewable technologies.

It would be great if we could do everything with pumped hydro. That's just not possible. No credible person suggests that that can be done. We need to do it through the sorts of technologies that this legislation is going to support. And, of course, the great thing about having a clear plan for transition is that that is going to drive more investment in renewables. If we know we've got a stable and reliable grid then we're going to have more investment in renewable technology because they are going to know that the market is going to be strong and protected from the risks that occur if you don't have stability and reliability. So it is the place for the government to be doing exactly this, and I commend the bill to the House.

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