Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

Before the interruption of debate on the Renewable Energy (Electricity) Amendment Bill 2010 and cognate bills, I was speaking about the objectives in the suite of technologies that are contained in these bills. Clearly, the objectives are to develop renewable energy, to encourage the research, development and commercialisation of renewable energy projects and to underpin the support both for the renewable energy sector itself and importantly—and this is not often mentioned—the jobs that are growing in that industry. I know, Mr Deputy Speaker Thomson, that you have taken a keen interest in this yourself. A range of companies from this sector that both you and I have spoken to have described to us the new and emerging employment opportunities and skill sets in this industry. There is a whole suite of skills required of those involved in geothermal, wind power generation, biomass preparation, solar and so on, and these skill sets are of considerable importance to large-scale projects.

Among the things that should be encouraged is addressing those issues and looking at those skill sets. I remember reading last year a paper produced in Germany that talked about that having been done. The paper described the decision to start auditing the skills required for an emerging renewable energy industry. That is something that we in Australia really have to apply ourselves to, because whilst those skills can be tailored and developed, if we are going to seriously address those issues so that companies will invest in and develop these technologies, we need to make sure that we have the skill sets to do it. It is heartening to see that the investment is taking place and that vocational education in particular is moving to ensure that we have those skill sets. From speaking to those companies, I know that the opportunities are now being taken to use the skills that have been developed through those courses to these new and emerging industries.

As I said in the opening part of my speech before the interruption of the debate on these bills, I had the opportunity to work with a renewable energy company prior to coming to this place, so I know about the difficulty of commercialising technology. I know that most of these technologies will be developed not through the public purse but through commercialising the project by raising funds on the share market. In saying that, companies that are developing large renewable energy projects need certainty. They are developing these projects partly for altruistic reasons. They want to get in and do something decent not only for our economy in the long term but also for our environment. These companies are well motivated in those respects. But, if they do not have a share price that underpins their altruistic motivations, the projects do not get commercialised and the viability of all the research and development work that is needed to bring them on stream is threatened. One of the things that this bill does in looking to create two aspects to renewable energy technology and in distinguishing between large-scale and small-scale projects is to try to provide the certainty needed to take investment decisions.

It was a coincidence that 10 or 15 minutes before I started to speak this morning I ran into Gerry McGowan, who is the managing director of CBD Energy. The people from the Bank of China were in the House today as well. He was telling me that they were trying to develop a substantial wind farm for renewable energy power generation in New South Wales, I think in Gundagai. People have to be able to bring to bear their entrepreneurial spirit, to make the commitment to invest in something that is going to be significantly long term with a view to committing to the development of those resources in such a way that we will see a long-term benefit.

I know that in Victoria, since these bills were announced, AGL has already committed to conditional agreements for the construction of a very substantial wind farm, the Macarthur wind farm, in south-west Victoria. It is going to produce, after full construction, 365 megawatts of power. That is very substantial. The point of saying this is that these organisations need a degree of certainty. One of the things that can undermine this certainty, bearing in mind that this is an energy trading system we are looking at and they are going to invest on the basis of having 20 per cent renewable energy power by 2020, is a high take-up of small-scale renewable energy projects, or the development of small-scale renewable energy technology.

This bill goes a substantial way towards giving certainty in respect of those investors in large-scale renewable energy power generation. Both large-scale and small-scale will be delineated, and that will give certainty to the investment decision surrounding large-scale renewable energy projects. From the figures I have seen to date, putting both of those categories together is possibly going to lead to something larger—I do not know how much larger—than 20 per cent of renewable energy being produced by 2020. I suppose a number of things can influence that. This will allow those major investors looking at significant projects to be able to commit funds for the development of those projects based solely on the notion that this is where we will be in 2020. That is why this is of some particular significance.

It is also important to remind people of what the renewable energy target does. The RET provides guarantees; it is a market for the additional renewable energy power we require. It certainly provides that financial incentive by dictating the energy mix that will be achieved by 2020. The RET uses mechanisms of tradeable renewable energy certificates, and those certificates can be produced by renewable energy generators large or small. As I say, being able to make this distinction between large-scale and small-scale generators, whether small scale is just having solar panels on your roof, or a solar hot water system, gives a very clear signal to any boardrooms looking at investing in renewable energy technology that by 2020 we are looking at 20 per cent of our power being produced through renewable energy. These are matters which are quite substantial.

I did say when I started my contribution earlier today that we are an energy rich nation. We are one of the largest coal-producing nations in the world, and I think we are the biggest exporter of coal. Clearly coal will play a significant role in the generation of power for some time to come in this country, but we are making decisions now about how we move towards developing not only clean coal technology, which I know the minister at the table has a very significant interest in, but also a clean energy mix for this country. It does not happen just because we say it should. We need to provide the framework within which that can be developed, and that is clearly what these bills are aimed at. These remarks are similar to those I made in respect of the ETS itself when it was debated in this chamber on a couple of occasions. We pressed for a mechanism that would allow the change to occur within a very planned commercial process and enable the deployment of these technologies.

What we are doing here today is augmenting our position in terms of the 20 per cent renewable energy target by 2020. We are giving greater definition and greater certainty, particularly as they apply to large-scale projects. On that basis I commend the bill to the House. I encourage people to participate in this debate and certainly take an interest in what is happening in each and every one of our own backyards in relation to renewable energy. Not only mums and dads but also their kids are now developing the very clear view that we must make changes for the future. We are trying to provide a real, positive incentive to make that change.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Renewable Energy (Electricity) Amendment Bill 2010, which administers Australia’s commitment for at least 20 per cent of electricity usage to come from renewable energy sources by 2020, which equates to a target of 45,000 gigawatt hours. The coalition will not oppose this legislation in the House this week, but we will reserve our final position subject to the completion of a Senate inquiry and the completion of negotiations between government and industry.

This legislation aims to amend the Renewable Energy (Electricity) Act 2000 to separate the RET into two categories: the large-scale renewable energy target and the small-scale renewable energy scheme. If passed, the separation of the RET will become effective on 1 January 2011. The changes in this legislation intend to fix the problem identified by the coalition in August 2009 relating to the Labor government’s solar credit scheme, which would crowd out large-scale renewable energy projects in the renewable energy certificates market. The large-scale RET is capped at 41,000 gigawatt hours and will free up large-scale generation certificates, formerly known as RECs, for large-scale projects undertaken by accredited power stations, including wind, solar, biomass, hydro and geothermal energy. Liable entities would be allowed to use existing bank RECs to meet LRET obligations, but not small-scale renewable energy scheme obligations. The small-scale renewable energy scheme is uncapped and will create an unlimited market for the installation of solar panel systems, solar hot water systems and heaters, wind turbine systems and small hydro systems. The Office of the Renewable Energy Regulator will continue to administer the certificates and will receive an additional $6 million to administer changes and $4.5 million to establish an optional clearing house to manage creation, surrender and transfer of small-scale technology certificates.

The coalition has been strongly supportive of a renewable energy target, and certainly renewable energy in general, and believes that clean energy with green carbon is fundamental to significantly reduce Australia’s net emissions. It was the coalition that introduced Australia’s first mandatory renewable energy target, and we strongly support the principle of a 20 per cent RET. However, we seriously question how the Labor government has treated the renewable sector since coming into office. The coalition introduced the $8,000 solar rebate, which the government means-tested in a broken promise in 2008. The result of the means test took the price of solar panels out of the hands of many mums and dads who earned $50,000 each. Then the Labor government completely abolished the $8,000 solar rebate without notice on 9 June 2009—something we certainly heard about in our electoral offices.

We also introduced the Remote Renewable Power Generation Program, which Labor abolished, again without notice, on 22 June 2009. This put remote solar out of reach for many, many people in rural and regional Australia who were off-grid. To date the government has not replaced either of these programs and has failed to assist the industry in this area. The Labor government have failed with every policy they have touched, in particular the home insulation and green loans programs.

The Home Insulation Program has seen 144 house fires to date, 1,500 potentially deadly electrified roofs, 240,000 dangerous or dodgy roofs, four young lives tragically lost, and almost $1 billion in provisions within the budget to fix this major problem. In my electorate of Forrest, a number of local businesses were dramatically affected by the sudden suspension of the Home Insulation Program in February this year. Two companies I have met with had a combined total of $95,000 worth of stock and were owed around $77,000 in insulation payments, but they believed the Prime Minister’s promise that the program would be reinstated as of 1 June. They also believed him when he met the insulation companies in front of Parliament House with his notebook and told them that he got it and would fix it. However, this turned out to be another broken promise, leaving these businesses damaged. They have had to put off workers and their futures are uncertain. The lack of support for these small insulation businesses after the sudden cutting of this rorted and mismanaged program is disgraceful and has not assisted reputable businesses that are now in a serious commercial situation through no fault of their own. The Prime Minister is so embarrassed by the support package that the government is offering that he would not even face those same installers who rallied at Parliament House in disgust over what has happened and what was offered to them. The Labor government is responsible for the failure of this program, and must take full responsibility for the circumstances that reliable and legitimate insulation installers and small businesses are now facing.

Also of major concern with this legislation has been the government’s 1½-year delay in taking action on the renewable energy target. The coalition engaged in open and active dialogue in late 2009 to ensure that the RET legislation was amended in such a way that met industry requirements. Outcomes to the amendments sought to the legislation by us in 2009 included decoupling the legislation by establishing separate regulations and a start date based on royal assent. At the introduction of a CPRS, the coalition moved to ensure the inclusion of electricity generated from waste coalmine gas as a fully eligible zero energy source of renewable energy credits. We also moved to ensure that the aluminium sector received 90 per cent exemption for both existing and new RET obligations. We moved to have heat pumps for domestic installation continue to be included in the RET at current rates of allocation. And then there was the move to ensure that food processing was given 90 per cent coverage, that 8,875 gigawatt hours of the RET by 2020 be banded and reserved for emerging baseload renewable technologies via the schedule.

In my electorate of Forrest there has been a lot of interest in sources of renewable energy: wind power, particularly in the area of Scott River, and biomass. I look forward to the progress of these initiatives. Major gains can be achieved in Australia through energy efficiencies. We have heard consistently over a number of years from the member for O’Connor about HVDC transmission and its significant potential 20 per cent savings in power transmission. Late last year west Perth based Green Rock Energy announced that it had been granted three geothermal exploration permits within the town of Collie in my electorate where a substantial proportion of Perth’s electricity supply is generated from power stations.

I have hosted two energy diversity forums in my electorate over the last year, which have provided an interactive environment for people to learn more about a range of energy diversity options. Those in attendance not only heard how they can be more energy aware and efficient in their own homes and business premises but also received information on environmental programs and proposed outcomes at local, state and national levels. The forums covered topics including geothermal energy; solar, tidal and wind power; converting CO2 to energy using algae; waste water recycling; and stormwater filtration.

The Prime Minister has stated that climate change is the greatest moral and economic challenge we will face in the 21st century and yet we have not seen the Labor government do anything much more than propose its great big new tax, the ETS—a new tax that would impose massive costs on Australian families and small businesses. The government’s seriously flawed CPRS legislation would add costs to Australia in households and businesses without achieving a genuine reduction in carbon emissions.

The Prime Minister himself has admitted that electricity prices would increase by 19 per cent in the first two years of Labor’s ETS. There was no mention of compensation, only extra costs for the 750,000 small businesses in Australia. There was certainly no mention of compensation for the increased taxes for the 14,000 small businesses in my electorate such as drycleaners, retailers, hairdressers, those in the service sector and particularly those who are in no position to pass on any additional costs like farmers and horticulturalists, who would see additional costs on their inputs. But it is not just small businesses who would be hit hard by price increases. Many individuals and households would also be affected.

Another issue ignored by the government with the flawed ETS legislation is that its cost across the board for families and businesses is compounded over and over again in rural and regional areas. Electricity, food, groceries, fuel and other essentials like heating and cooling are often a real necessity, particularly for pensioners and those with health issues.

The Prime Minister assembled a major contingent of 114 people to take to Copenhagen only to find that what was very clear to the coalition prior to Copenhagen and which became crystal clear to every Australian and, finally, the current Prime Minister was the fact that, in spite of Australia’s contribution of 1.5 per cent of the world’s carbon emissions, the world’s biggest emitters—China contributing 21.5 per cent, the US contributing 22.2 per cent and India contributing 5.3 per cent to the world’s emissions—had no intention of agreeing to binding emissions reduction targets and placed no priority on an ETS. If the Prime Minister had rammed his CPRS through the parliament prior to the major emitters in the world agreeing to a similar tax, Australia would be uncompetitive in domestic and overseas markets and would potentially export jobs, investment and the carbon itself. I also note that the Prime Minister has been AWOL on climate change, the environment and the CPRS since the failure at Copenhagen—shelving the CPRS until after the election. Under the government’s flawed legislation the CPRS will place a further tax on the mining and resource sector in addition to the Resource Super Profits Tax.

Unlike Labor, the coalition is serious about taking environmental action and believes an incentive based approach will reduce emissions as well as address some of Australia’s serious environmental problems. I note that Labor’s big new tax would have cost $120 billion compared to $17 billion for the coalition’s direct action plan. It would cost far less, achieve the agreed target, provide real environmental benefits, would not cost jobs and would not increase electricity and grocery bills. The Prime Minister has certainly lacked courage and conviction when it comes to making environmental policy and commitments, highlighted by his move to shelve the ETS in spite of describing climate change as the greatest moral and economic challenge of our time and that delay was denial. The Prime Minister also said the third group of climate deniers are those who pretend to accept the science but then urge delay because they do not want their country to be the first to act. He also said in a speech to the Lowy Institute: ‘there are two stark choices: action or inaction. The resolve of the Australian government is clear: we choose action.’ The action taken by the Prime Minister was to shelve the ETS until after to 2013. The sidelined ETS has cost taxpayers hundreds of millions of dollars without any measurable reductions of global emissions.

The Department of Climate Change and Energy Efficiency and its 494 staff will have cost taxpayers $215 million by July this year and the government has allocated a further $30 million to spend on a climate change advertising campaign. The whole extended protest cost the business sector millions and millions of dollars in assessing and analysing the implications of the green paper, the white paper and then the very seriously flawed legislation itself. Many industries, groups and businesses from my electorate flew backwards and forwards to Canberra consistently throughout this process. What a massive additional cost to their bottom line. And what for? For the Prime Minister to shelve the CPRS until 2013. If the Labor government is re-elected, the seriously flawed ETS legislation and tax will be added to the other Labor governments—

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

Order! I have given the member for Forrest a great deal of latitude in debating legislation that is not before the House. I ask her to return to the legislation which is before the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

Certainly, Mr Deputy Speaker. In conclusion, the coalition is highly focused on renewable energy and strongly supports the concept of a 20 per cent renewable energy target.

We will consider the following issues in the Senate inquiry: any attack on the waste coalmine gas sector; and increasing to 300 megawatts by 2030 waste coalmine gas generation capacities in the absence of access to GGAS, subject to support from high electricity users and the provision of full costings to industry. Further, we will consider the issue of limiting the exposure of high electricity users to the currently uncapped SRET by implementing one or more of the following options: removing the eligibility of heat pumps to earn RECs where installed in reticulated gas areas; capping the SRET at 4,000 gigawatt hours; removing unlimited liability for large energy users in the case of an expansion in the solar homes programs—or if there is a feed-in-tariff then solar panels may not generate a small-scale technology certificate.

In the House of Representatives, the coalition’s position is to reserve our final position until the report of the Senate inquiry and the completion of negotiations with government and industry.

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to rise today in support of the government’s Renewable Energy (Electricity) Amendment Bill 2010 and the cognate bills. The changes included in this bill will accelerate investment in renewable energy projects, many of which languished during the years of the Howard government and were never realised. But the Rudd government is committed to this nation’s future, hence the bill before the House today. The people of Australia want to see an increase in the use of renewable energy. The people in my electorate want to ensure that Australia is an advanced, prosperous and environmentally conscientious nation, and so I am very pleased, once again, to see the Rudd government delivering on its clear commitment to addressing the issue of renewable energy.

I come from the state of South Australia, which has had a very big take-up of renewable energy. South Australia produces 56 per cent of the nation’s generated wind power and has the highest incidence of residential grid connected solar systems in Australia, accounting for around 25 per cent of Australia’s residential grid connected solar capacity. We have also seen huge investment and a huge interest in the area of geothermal energy in South Australia. We have seen many residents, companies and community groups who are interested in renewable energy and who want to help make a difference. By investing in renewable energy, they have seen their energy costs decrease and they have been actively pleased to reduce their carbon footprint.

Earlier today I was talking about the commitment from the Seaford Meadows Scout Group, who have been on a campaign to talk to the community about the importance of solar power and the benefits it has had for their small part of the world. We know that communities around the country have embraced renewable energy and that they expect their governments to do the same, to do all they can to encourage renewable energy. The Rudd government has already dramatically expanded the renewable energy target to 20 per cent. That was a commitment that we gave in opposition and a commitment that we have now delivered on. So, by 2020, the equivalent of all household electricity will come from clean, renewable sources such as wind and solar power.

The bill before us today seeks to separate the Renewable Energy Target Scheme into two parts, the large-scale renewable energy target and the small-scale renewable energy target, creating separate obligations for liable entities. It will retain the renewable energy target; however, it will limit its scope to large-scale generation. It will introduce large-scale generation certificates and small-scale technology certificates. These changes will provide greater certainty for all Australians. The changes to the Renewable Energy Target Scheme will support an increase in a range of technologies, such as solar, wind and geothermal. This is renewable energy for the future. The bill strengthens the Rudd government’s commitment that at least 20 per cent of Australia’s electricity will come from renewable sources by 2020.

We know that there is significant private investment ready to be unleashed. While estimates have varied, the investment has been estimated by a number of commentators to be around $20 million. Such an investment in the area of renewable energy will create jobs and train a green workforce for the future. So there are a lot of positive things about this investment, not to mention the huge, positive impact it will have on reducing our carbon emissions.

The Rudd government are committed to renewable energy, and that is why we have already committed to and introduced a range of programs—programs that are already running that have been incredibly successful. We have introduced the Renewable Remote Power Generation Program, which is aimed at creating reductions in greenhouse gas emissions. This program provides rebates for renewable energy systems for people in off-the-grid areas and goes a long way towards minimising their reliance on fossil fuels. In my electorate alone, there are six systems that have been installed to ensure people are getting good renewable energy sources.

Under the National Solar Schools Program, grants worth more than $140 million have been approved, assisting over 2,500 schools. This is practical action to help combat climate change but it is also helping schools out with costly electricity bills. In my own electorate, many schools have benefited from this initiative, including Moana Primary School, Seaford K-7 School, Seaford Rise Primary School, Coorara Primary School, Hackham East Primary School, Hallett Cove South Primary School, Lonsdale Heights Primary School, McLaren Vale Primary School, O’Sullivan Beach Primary School, Woodend Primary School and Willunga Primary School. All of them have received up to $50,000 to support their uptake of solar panels.

I know that schools have certainly welcomed this. A lot of teachers and others commented on the fact that the previous government had a scheme for solar energy for schools, but it was only for solar hot water systems. Unfortunately, as the schools told me, they did not use a lot of hot water at school. They made cups of tea and a few other bits and pieces, but it was not saving them huge amounts of money on their energy costs. The Solar Schools Program will allow them to use the funds to generate energy in their schools—obviously, lights, computers and a whole range of things take up a lot more energy. With our program they will be able to make sure that the energy they use is renewable and that they can return power that they are not using back to the grid.

Under the Solar Credits scheme, the Rudd government has provided support for homeowners to install small-scale solar power systems. In my electorate alone, over 1,407 householders have benefited from this program and close to $1,100,000 has actually been spent just in Kingston. This is a significant program and it has made a real difference to many people. I was out doorknocking at the weekend in Woodcroft and I spoke to a number of people in the street. Many of them had taken up and benefited from this program. Others had just put in for the program. They were seeing on their quarterly bill some real improvement, and they were very grateful for that.

Getting back to the bills: the changes in these bills will enhance the renewable energy target by providing greater certainty as to the support provided by the RET for households, large-scale energy projects and installers of small-scale systems like solar hot water. We have already heard from the Parliamentary Secretary for Western and Northern Australia, who is in the chamber now, that renewable energy systems will underpin our economic prosperity and drive our economy into the future. I could not agree with him more. The government is delivering on its commitment to provide strong and viable action on climate change. This is a practical change, a legislative evolution, that will have a positive impact on business—big and small alike—while also affecting the end consumer. Many mums and dads are also interested in securing a good and positive environment for their children’s future.

The large-scale renewable energy target will encourage the deployment of large-scale power generation from renewable energy sources such as wind and solar. The legislation before us provides further encouragement for companies to invest in renewable energy. The bills before us today create large-scale generation certificates, distinct from the small-scale technology system. They retain the concept of a renewable energy target but only for the large-scale power generators. These certificates will relate to energy generated by accredited power stations.

The benefits of the new LRET and SRES are already emerging. Within days of the government announcing this enhancement of the RET, AGL announced that it had entered into agreement for the construction of the 365-megawatt capacity Macarthur wind farm in south-west Victoria. This highlights a stark contrast between the current government and the former Liberal government, which not only failed to attract investment in renewable energy but effectively sent investment offshore. Companies such as Suntech, one of the world’s top 10 manufacturers of solar PV cells, had to set up their manufacturing facilities in China because of the lack of government incentive offered by the Liberals when they were in office. This was not isolated. It has happened time and time again. In 2006, a $750 million wind development by the company Roaring40s was stalled due to the Howard government’s failure to take action and increase the RET. In February 2007, Pacific Hydro announced it would invest $500 million in Brazil because investment in Australia was undermined by the Howard government’s refusal to ratify the Kyoto protocol. These examples show not only that the Liberal Party has a blase approach to environmental energy production but its complete lack of interest in working Australians. Such investment would have created jobs for Australians and put money back into communities.

We also have before us the small-scale renewable energy scheme, which will provide continued support to households, small business and community groups that install renewable systems into their homes or places of business. The bills create small-scale technology certificates, which relate to the installation of renewable energy and small-generation units. There will be no overall limit on the creation of these certificates, and the price will be fixed at $40. For small-scale technology, liable entities must surrender all small-scale technology certificates created in a year. Small-scale certificates will be created as per the current process and administered by the regulator. The proposed system provides certainty for small-scale technology entities, though the actual liability of such entities will not be known until the total number of certificates required is identified.

The bills require that the regulator provide each liable entity with a quarterly estimate of the number of small-scale technology certificates that it will be required to surrender. The rate of clearance of certificates has been problematic under the current system. This is addressed by empowering the regulator to establish a clearing house for small-scale technology certificates. The clearing house will act as a central point for the transfer of these certificates at a set price of $40 per certificate. It is a requirement of these bills that certificates be surrendered quarterly to encourage Australians to take action on climate change. This change will encourage families and small business owners to take on renewable energy. This is an important aspect of this government initiative. It is important that we encourage the bigger end of town to move towards renewable energy, but we also cannot forget the many community members and families that are very keen to embrace renewable energy. These bills encourage this uptake.

The bills before us today are part of a suite of government policies that will encourage a switch to renewable energy. This switch is essential for the ongoing energy security of Australia. For the consumer, the cost to the end user will be minimal. The Department of Climate Change and Energy Efficiency estimates that the enhanced RET system will add less than $4 a year to the average household bill. This is a cost-effective change—a small-cost change—that will go a long way to ensuring our environmental security for Australia. Combined, the SRES and the LRET are expected to deliver more renewable energy than the existing legislation. This highlights the effectiveness of the scheme and its importance for our future.

As I said, the government not only is committed to the renewable energy target but has made significant investments through the $4.5 billion Clean Energy Initiative. These include the $1.5 billion Solar Flagships program to support the construction of large-scale, grid-connected solar power stations.

As announced in the budget two weeks ago, the government will provide $652 million to establish a Renewable Energy Future Fund to support Australia’s transition to a low pollution economy prior to the commencement of the Carbon Pollution Reduction Scheme. This fund, together with other initiatives, will expand the Clean Energy Initiative to $5.1 billion. It was very disappointing to hear the shadow minister for finance say in his reply to the budget speech that this future fund would be cut. It was very disappointing to hear that; however, it was not surprising and probably represents the coalition’s lack of interest in renewable energy.

It is time that Australia took advantage of its renewable resources. We have sun, wind and the potential of geothermal technology. We have a lot of natural renewable resources. It is very important that we invest in them to ensure the provision of cleaner energy and a cleaner future for all Australians. I commend the bill to the House.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to address the Renewable Energy (Electricity) Amendment Bill 2010 and related bills. I feel a bit like a school student as I stand here and say to the government: ‘We told you so.’ We warned the government at the time the RET legislation was introduced into the House last August that it would lead to emerging and large-scale projects being frozen out. The government is now proposing that we split the RET into two—a large-scale renewable energy target and a small-scale renewable energy target. I think that will improve the bill but I still have some reservations.

In considering the amendments, I return to my comments in August 2009 when the original legislation was presented. I said:

The legislation will help a number of these industries, but it also has some dangers in that the support may be soaked up fully by mature technologies which can quickly meet the targets when the aim should be to encourage new technologies to be able to come of age and compete in the marketplace. That is why the opposition will move an amendment stipulating that 25 per cent of the renewable energy target should be reserved for new and emerging industries … The renewable energy credits or RECs will be most valuable at the start of the program and will deteriorate in value as 2020 and the 25 per cent target near.

This would protect and foster new industries. It is now some eight months later and we have come back to revise that legislation because the government chose to ignore our advice at the time.

At the time of those comments, I took the opportunity to highlight a number of opportunities in my electorate of Grey that would benefit from the RET. It is worth remembering that the origins of the RET were in the previous government’s MRET scheme, which was responsible for most of the completed wind farms in Grey. Off the top of my head, I think we have seven fully completed wind farms. The scheme will also benefit solar, wave power and hot rocks. I am pleased that in the current budget the government has allocated $60 million to the solar array project in Whyalla. This project enjoyed the support of the coalition government with $10 million in seed funding. I am hopeful that it will come to fruition, unlike the $7 million solar power project that the Minister for the Environment, Heritage and the Arts announced some two years ago for Coober Pedy. Despite having questions on notice, I have never received an official answer from the minister that the project has been officially shelved, even though it is already some four months past its switch-on date. Nothing has happened at all.

We are considering the amendments before us because there has been a rush on solar photovoltaic roof installations and hot water systems. With their front-loading of lifetime credits, it was quite predictable to everybody—except the government, it would seem—that this would lead to a distortion in the system. The amendments are an attempt to address that distortion. But, even now, I must admit that I have some doubts about the economic efficiency of a scheme that gives a taxpayer subsidy to install a home generation system and then another very generous taxpayer subsidy—the feed-in tariff. In South Australia, the feed-in tariff is 44c per kilowatt hour, which is typically about double the price for retail electricity. The scheme accesses the taxpayer subsidy on installation and then it accesses the state taxpayer subsidy every time the sun shines. I think it bears some consideration whether this is really a good use of taxpayers’ money. Renewable, yes; public assistance, yes. But the scheme must be designed in such a way that it encourages the most efficient forms of renewable energy. I am a little worried about the double subsidy.

This legislation also leaves the small renewable energy target uncapped—that is, as many photovoltaic power systems and hot water systems as we can put into houses will subsidised by the government. We must be honest about what we want to do here. If we want to use taxpayers’ funds to engineer a shift in energy production in Australia, which is what this legislation proposes, it will come at a cost. So it is imperative that we get good value for money, the process is transparent and we understand exactly what we are doing.

I have been very encouraged by the wind farm industry. As I said, we have seven operating farms in the electorate of Grey and a number of others on the drawing board at the moment. It is great to see the local employment that they encourage. My reservation about wind farms is that wind is a fully mature technology delivering today. Some of the other possible projects in my electorate, such as hot rocks technology and wave technology, will probably not be mature enough to take advantage of these RETs until the latter years of the projects. By then, the targets may well have been soaked up by the wind farms. That is something that still causes me concern and it was raised in our amendments back in August.

It is worth looking at the amendments proposed by the coalition that the government did accept. One was to decouple the legislation from the CPRS. Looking back now, it is just as well we did because it enabled us to actually do something positive about greenhouse gas emissions reduction in Australia when it would all have failed had it been attached to the ETS. The failure of Copenhagen exposed, in the end, how foolhardy it was to be trying to introduce legislation that was, in effect, irreversible before the rest of the world had made decisions about how it was going to deal with this problem. Other amendments that the government accepted dealt with waste coalmine gas, the exemption of the aluminium sector, heat pumps and concessions to the food processing industry. These were all good things and all things I am very pleased the government accepted.

We also attempted to introduce a banding structure, which would have dealt with the problems I have talked about concerning mature technologies as opposed to emerging technologies. As always with amendments the coalition puts up, however, the government say they are not needed and that we should just get out of their way and let them get on with governing Australia. I would bring their attention to the youth allowance debate, the imported beef debate and the cataract surgery debate. In those cases, despite telling us to pass legislation, in the end they did see the point of view of the coalition. I suspect that even the great big new tax on mining may meet a fate where the government is, in the end, prepared to compromise and come back to reality.

To come back to the amendments: as with all of this government’s measures, everything seems to cost more and this is no different. The sum of $10½ million for the Small-scale Renewable Energy Scheme is not a lot the way governments measure money—and it is certainly not a lot the way this government throws money around—but it is still a lot of money to me and it is another $10½ million out of the budget. I can think of a lot of good things I could do in my electorate with $10½ million.

It does come at a cost, but the coalition is committed to real and direct action on climate change. Unlike the government, we do have a policy in this area. The government have abandoned all pretence of trying to get their ETS legislation through the parliament. We should remember that the Prime Minister described this is the greatest moral, economic and environmental challenge of our generation. Now we watch government members rise, one by one, to speak in this place, mouthing the words that they still want the ETS legislation passed, but they do not believe it and we know they do not believe it.

If they did believe it, they would bring it back into the Senate. There are probably two reasons why they are not keen to bring it back into the Senate. One is that it would trigger their ability to call an election on the matter and I do not think they are at all confident that they have the confidence of the Australian people on this subject. The other reason is that they may well find that, if they reintroduce the legislation into the Senate, the Greens will agree to it. Then they would be stuck with it. I do not think they want that either. As the Prime Minister said, not to implement the ETS would be absolute political cowardice, an absolute failure of leadership and an absolute failure of logic.

It comes as a great disappointment to many Australians that their Prime Minister was not really fair dinkum about the ETS. What he was fair dinkum about was a new tax. He was fair dinkum about a $14 billion a year tax on Australian industries. Not to be deterred because he could not get the $14 billion a year tax on Australian industry, he has gone for a $9 billion tax on the mining industry. It is quite obvious that the main game in town is the new tax, not what the consequences of the new tax are.

It is a simple fact that, if Australia is to make a real contribution to greenhouse gas emissions reduction, we can only do it by staying roughly in step with the rest of the world, not by proposing irreversible legislation. As I said, looking back, the ETS was very foolhardy and I am glad the government has abandoned the attempt to get it through in this session of parliament. I wonder what they will say to the Australian electorate when we come to the election. However, the absence of agreement does mean we need a direct action agenda, as the coalition has proposed. This RET, and the amendments to the RET, is a direct action agenda and, broadly, I support it as I have done before. As I said, I still have some reservations about its implementation and that is why the coalition will be referring this legislation to the Senate committee.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

It is a great pleasure to have the opportunity to speak on the Renewable Energy (Electricity) Amendment Bill 2010 and associated bills and to speak on another piece of legislation that deals with the climate change issue. This has been a matter of great concern to the people of my constituency and to me personally. I think this bill demonstrates that this is a government that listens, a government that is flexible and a government that will act to evolve and adapt to the changes that are needed in these challenging times.

It was certainly the case that concerns were raised about the impact on waste coal gas projects and about the impact of individual actions on the price of renewable energy certificates. We addressed that issue in this legislation. Specifically, that has been done through the separation of the scheme into the two parts: the Large-Scale Renewable Energy Target, the LRET, and the Small-scale Renewable Energy Scheme, the SRES. With these two schemes, the LRET will set an annual target at 4 million RECs. That is 4,000 gigawatt hours per year less than the current targets to take account of the estimate of the deployment of the small-scale technologies that individuals have been reaching out for. The estimate is that it will reach 41 million RECs, or 41,000 gigawatt hours, by 2020.

The bank RECs from the current scheme would only be eligible for use in the LRET. Installers of small-scale technologies will be able to received RECs at a fixed price of $40 in nominal terms for the period up to 2014. This will mean a householder in Sydney installing an average size 1.5 kilowatt system and receiving a solar credits multiplier will receive RECs worth approximately $6,000. The enhanced RECs scheme should come into effect on 1 January 2011. This will provide great certainty and encouragement to investment in the large-scale renewable energy projects and also provide stability during 2010 to enable electricity retailers and other liable parties to meet their current compliance year obligations.

The interesting part about this scheme is, of course, the SRES aspect, which supports those who wish to install a small-scale system such as solar panels and solar water heaters through the creation of a small-scale technology certificate. There will be no overall limit on the creation of these STCs and the price would be fixed, as I mentioned, at $40 through the creation of an optional clearing house. To maximise certainty for liable entities the bill requires the regulator, the Office of the Renewable Energy Regulator, to estimate the total number of STCs expected to be created at the start of each year to set that year’s annual target expressed as the small-scale technology percentage. The annual targets would be adjusted each year to account for actual small-scale technology certificate creation in the previous year.

The adjustment of the profile of annual targets to be met by RECs from large-scale generations to take account of the RECs from small-scale technologies is supplemented by the action to remove the proportion of the annual targets for the inclusion of waste coalmine gas until eligibility of that source is set in regulations. That should take the heat out of the reduction in the value of renewable energy certificates that were affecting the value that purchasers of small-scale systems could obtain in installing photovoltaic panels on their homes. The combined new LRETs and SRETs are expected to deliver more renewable energy than the existing 45,000 gigawatt-hour target for 2020. The degree to which we expect that target will be exceeded will depend on the uptake of small-scale systems by households.

This is an issue of critical interest to my region. It has been inspiring to see how they have responded to the climate change challenge through mobilisation of individual action. In our region we have the Clean Energy for Eternity organisation, which it has been my pleasure to work with these last few years. They have raised great awareness within the community and helped to drive community and individual action. By dealing with local companies like Pyramid Power they have created programs whereby, upon the installation of up to 30 systems, Pyramid Power will install a free system on a community asset. So we have solar power systems installed on churches, fire stations and other community assets through this program and also through great fund raising that Clean Energy for Eternity conducts.

Already through the Solar Homes and Communities Plan we have had something like $6 million expended on solar for 744 houses to install small-scale photovoltaic systems. You can see the scale of the response from the community in that respect. Also, through the Renewable Remote Power Generation Program we have had 204 systems installed to the value of $3.9 million.

My schools have also understood the importance of this issue and the educational value of taking action on climate change and have demonstrated that to our students and children. Moruya Public School, Bega High School, Bombala High School, Braidwood Central School, Eden Marine High School, Monaro High School, Moruya High School, Queanbeyan West Public School, Tumut High School and McAuley Catholic Central School in Tumut have all taken advantage of the $50,000 National Solar Schools Program to install systems in their schools. It is very exciting to see how creatively they have used that program to educate the children, to have classes around climate change and renewable energy and to show and demonstrate to the children how the power generator works and the technology behind it. I really do salute my schools in the region that have taken this issue on board and are showing tremendous leadership.

The large-scale renewable energy target projects that this legislation seeks now to underpin and promote hold great prospects for our region, not just for the country as a whole. We are greatly blessed in our region to have just about every renewable energy option available to us. Also, because of the wonderful Snowy hydro scheme, we have access close by to the national energy grid. Of course the Snowy hydro scheme is the grand-daddy of renewable energy projects in this country. It supplies 3.5 per cent of the national energy market. If you combine that with the wonderful Capital Wind Farm project near Bungendore—which was a $400 million investment and provides 10 per cent of the national wind generation capacity—you can see that we are the nation’s capital of renewable energy.

I have been dealing with many other projects and companies that are very exciting. We have an ancient project operating on Brown Mountain through Eraring Energy that started well before the Snowy hydro. We have a great company called Lloyd Energy in Cooma that is developing tremendous solar thermal possibilities and is deploying prototype projects in places like Lake Cargelligo in New South Wales and Cloncurry in Queensland. It is very exciting. Locally born technology is also spawning jobs and production in other companies in my region.

We also have the very exciting Dyesol company in Queanbeyan, which has managed to replicate photosynthesis by developing paste which contains titania nanoparticles overlaid by a dye that acts as a light sponge. The titania nanoparticles conduct the electricity. Through this product very flexible solar generating capacity is created. The product can, in fact, be put on window panes of homes and you can still see through them. It generates electricity and operates from the moment the sun comes up to the moment the sun goes down. With Commonwealth funding they have been able to get off the ground and are doing great things. I salute the operators of that company. Wizard Energy are locally based too and are developing proposals to take advantage of our Solar Flagships program and they are developing very exciting technologies.

I have also been dealing with a company called Carnegie Corporation, which has been developing a prototype wave energy generation facility at HMAS Stirling naval facility. As it transpires, the port of Eden in my region has great potential for wave energy generation. With this system, you need an average swell of about one metre on a regular and consistent basis. We certainly have that in the port of Eden and in a few months time Carnegie Corporation hope to drop a test buoy to begin the process of developing the potential of the port of Eden.

We have great biomass potential in our region by using the wonderful timber plantations. The Vizy pulp mill over in Tumut is a massive undertaking being conducted on tremendously high-value environmental grounds. They have done a wonderful job in maintaining those values in the development of the facility. They exclusively power their operation on energy from biomass. With an estimate that we have around 500,000 tonnes of waste left on the floor of plantations, we could potentially generate something like 50 megawatts of power out of that biomass waste in plantations. So there is a lot of potential there.

I have also been dealing with a company called Eon Energy, which has some very exciting biodiesel proposals using algal and seaweed ponds. We have been conducting meetings with local councils in Bega Valley Shire and Eurobodalla Shire because these facilities need to be near the coast. We are also trying to involve the Aboriginal land councils in my area to create some synergy with jobs and a self-sustaining income-earning potential for my Indigenous communities. This is a very exciting project in that we could power all of our fishing fleet with the one million litres of diesel fuel they require each year. We could also power the council plant and farming plant in the area from such ponds, which would be about 50 hectares in size. There is tremendous potential in biodiesel from algal pond systems. It is estimated that we could probably supply the country’s entire transport fuel needs from biodiesel from algal ponds the equivalent size of a 100 kilometre by 100 kilometre facility. Obviously that would be broken up into many different facilities but that is the scale of operation we would need to supplant our current dependence on fossil fuel. The need to do that is well understood by many. We need to get off fossil fuel for our transport industry as quickly as possible. It creates economic vulnerabilities for us because of the dwindling resources we have here and potential dependence on overseas suppliers, which has an effect on our balance of payments and also makes us strategically vulnerable. There are great incentives from security and economic points of view to explore these potentials.

One very exciting project is being conducted in Israel by a company called Seambiotic where they are funnelling flued gas emissions from coal-fired power stations into algal pond systems to generate biodiesel fuel and eliminate carbon emissions from the coal-fired power stations. This obviously would have great potential for a country like Australia. I look forward to seeing that technology developed and examined by this country.

I have also been dealing with a company called Sencorp because we have great biogas energy generation potential in the region by utilising animal waste products from livestock and abattoir waste from, say, the Monbeef abattoir in Cooma, as well as other forms of waste from the region such as council waste. I see this as part of what we might find is a distributed network of energy generation for the future of this country, a network which would help us meet the growing need for energy with projects which might deliver essential baseload power to this country.

The other possibility with this legislation is a fantastic investment in Eden-Monaro which would add to the $400 million Capital Wind Farm. The Wind Prospect company has a proposal that is working its way through the system at the moment. It is a massive project of $800 million, or roughly 120 turbines and therefore twice the size of the Capital Wind Farm project in Bungendore. That would equate to a $1.2 billion investment in my region on wind farm technology alone. That would be massive for the region in terms of jobs.

The high country in particular has suffered greatly during the last few years from the effects of the drought. This will provide a wonderful offset. It is a potential opportunity to diversify income for farmers in the area. I have been talking often to the proponents of the project and I look forward to it working through the environmental impact processes and hopefully becoming a welcome part of the economy of our region.

We also have geothermal prospects and a wonderful potential in tidal energy in our region. I have spoken with a company called Tidal Innovations, which has surveyed some of our tidal estuaries and river mouths, which offer great potential for tidal energy generation.

You can see that the region of Eden-Monaro has absolutely every potential renewable energy option open to it. It would be a massive boost to the economy in terms of providing the diversity we need. We are now heavily dependent on the tourism seasons, the winter season in the high country and the summer season in coastal areas. So we have a degree of under-employment, particularly with our youth. We are constantly striving to attenuate the employment year. These investments in our region would provide alternatives for our youth, to maintain the demographic balance that we need and the skills as well. Hopefully this will drive the skills taught in our TAFEs, in trade and training centres and in high schools, should the Rudd Labor government be re-elected—those trade and training centres are currently under threat from the coalition, as we know.

This renewable energy drive by the Rudd government is in stark contrast to what preceded it. We know that during the Howard years the renewable energy contribution to our electricity generation went down from 10.5 per cent in 1997 to 9.5 per cent at a time when the OECD generation capacity proportion went up. It was a shame on this country that we were not able to drive that agenda forward and we lost so many opportunities for investment and so much in the way of brain drain and research and development that left this country to go overseas.

There were many such projects. Some of them are quite well known individuals and companies. Suntech, one of the world’s top ten manufacturers of solar PV cells, set up in China due to the better policies that China had at the time. There were delays in the $750 million Roaring 40s project. Pacific Hydro moved its investment to Brazil because it was undermined by the Howard government’s refusal to ratify Kyoto. There were many other projects besides those—I could list quite a number. So it is great that we are now able to move forward in relation to driving the investment that we need in this country to move towards that 20 per cent target, which we now look to be able to exceed through the dichotomy we create with this legislation.

This legislation was meant to be tied to a dual strategy and the other part of that equation was the CPRS. There is a great deal of disappointment—I will not disguise that—in my region over the inability of this parliament to pass a CPRS bill. There is a great deal of anger about that and it is well understood that something so complex and deep in terms of its impact on this country, and the transitions that would be created, needed bipartisan support. It needed bipartisan support to create the economy of the future to give us a leadership role, to give our industry and economy the headstart that it would have really been able to take advantage of and to unleash about $100 billion worth of investment. That was taken away from us. It was taken away from us by a coalition that decided to turn towards cheap political opportunity rather than do something in the national interest.

We had a man of courage in Malcolm Turnbull, who was prepared to sit down and talk with us and make an arrangement that was in the national interest, and we bargained in good faith over a long period of time to make that happen. It is a tragedy that the rug has been pulled from under this country. I hope and pray that wiser heads will prevail after this next election.

Government Member:

He lost by one vote.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

It is a shame that he did lose by one vote. There are many people on the other side who obviously do not believe the current policy of the coalition in this respect.

I conclude by saying that I wholeheartedly support this legislation, its vital objectives and the exciting future of renewable energy investment it will bring to the country and, in particular, to Eden-Monaro. I also look forward in hope to a day when we have a coalition leadership team that will act in the national interest and join with us again to advance the CPRS. The choice for the Australian people at this coming election will be very stark—a vote for a Rudd Labor government and effective action on climate change or a vote for the coalition and its purely political plan to waste taxpayers’ money for an end result that increases our carbon emissions and sacrifices the future of our children and our environment.

Debate adjourned.