Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

The coalition has been the champion of support for and the advocate of the great renewable technologies which are part of the future for Australia’s clean energy generation—solar and wind, geothermal and tidal. Beyond that, we see the potential of biomass and waste coalmine gas, clean energy sources, renewable energy sources which can help to provide Australia with energy security, energy certainty and clean energy for future generations. In August last year, after an arduous debate through June and July, we prevailed in ensuring that the renewable energy target was not held hostage to the emissions trading scheme, that the renewable energy target of 20 per cent—which was a desirable goal, an objective of itself, an end of value—was not held hostage to another piece of legislation which was in no way directly related. We know this because the Prime Minister has now walked away from those famous words of 6 November 2009 at the Lowy Institute. On that day, in relation to his own emissions trading scheme and the reason it had to be passed before Copenhagen, the Prime Minister said of anybody who could possibly consider delaying or deferring the emissions trading scheme:

What absolute political cowardice.

What an absolute failure of leadership.

What an absolute failure of logic.

The inescapable logic of this approach is that if every nation makes the decision not to act until others have done so, then no nation will ever act.

He stands condemned by his own words of ‘absolute political cowardice’ and ‘absolute failure of leadership’. Fortunately, we have had success on the renewable energy target. We have been successful in detaching the renewable energy target from the emissions trading scheme legislation. As a consequence, Australia now has a 20 per cent renewable energy target. The Renewable Energy (Electricity) Amendment Bill 2010 and cognate bills recognise that the very amendments proposed by the coalition, which were rejected by the government in August last year, are now necessary. Although the form of those amendments has been varied to some extent, the principle that there would need to be a separation of small-scale technologies—which are the subject of phantom renewable energy credits at present under the scheme devised by the then responsible minister, Mr Garrett—from large-scale technologies is the subject of the changes in these three bills.

Not only did the coalition support a 20 per cent renewable energy target but also we recognised that that which was being proposed at the time would carry with it some inevitable problems. We wanted to get the 20 per cent in place in order to protect against what was looming as a collapse in the solar sector, but we recognised that the government’s particular approach would need to be varied and that we should amend it in advance so as not to create problems for the future. The government resisted, the government denied, the government objected, and now they are adopting that which we proposed. It is that which we proposed in principle in August last year and which was rejected, and it is what we proposed again in February in our direct action policy. Although the form of what has been adopted by the government is not as neat or clean as our approach, our intention is to be constructive.

The opposition would like ultimately to see this legislation passed. We will not oppose this legislation in the House and we will reserve our final position subject to completion of the Senate inquiry and completion of satisfactory negotiations with the government and industry. The reason we reserve our final position is that, in looking at the detail, we want to make sure that there are no more pink batt or Home Insulation Program disasters, as those we have seen.

To take the government on faith is not the right thing to do because in something as simple as the Home Insulation Program we have seen catastrophic outcomes—144 house fires to date, 1,500 potentially deadly electrified roofs, 240,000 dangerous or substandard insulation jobs across the country and, most importantly, four tragic outcomes. And of the one million homes we do not know which are the 240,000 with dangerous or substandard insulation. All of this is accompanied by a loss, a waste, a provisioning in the budget of up to $1 billion to fix the problem created by $1½ billion expenditure on faulty insulation. That is why we will reserve our position, but our intention, our objective, is very clear. Our goal is to make sure that we do get the necessary changes. We come to the government in good faith, with an intention to ensure that this program is resolved and with an intention to ensure that the 20 per cent renewable energy target is properly implemented. On the specific changes, we will await the outcome of the Senate inquiry.

I will deal briefly with the coalition’s record as opposed to the government’s record and in particular with steps going forward. When we look at this legislation, we recognise that it offers a variation to the changes made in August last year. It is a variation in line with precisely the warnings we put down and precisely the warnings which were ignored by the government. To those who are not familiar with the content of the 20 per cent renewable energy target, it is important to put this explanation. We are expecting an approximate energy consumption in Australia of 300,000 gigawatt hours by the year 2020. Of that, 60,000 gigawatt hours or 20 per cent will be required to come from renewable energy. Of that, approximately 15,000 gigawatt hours were in place prior to the commencement of any government mandated schemes in Australia. The vast bulk of that was from the Snowy Mountains Hydro-Electric Scheme and from the Tasmanian hydro schemes.

The legislation put in place by the previous coalition government established a 9,500 gigawatt hour mandatory renewable energy target. With our urging, with our leadership, with our push prior to August of last year, that was expanded by an additional 35,000 gigawatt hours to bring up a total mandatory renewable energy component of a renewable energy target of 45,000 gigawatt hours. It is that component of the 45,000 gigawatt hours which is now being varied as a result of these three acts. In essence, what is occurring is that of that 45,000 gigawatt hours, 41,000 gigawatt hours will be reserved for large-scale renewable energy technologies. These large-scale renewable energy technologies of solar and wind, of geothermal and tidal, the great new energy sources of the future, did not have certainty—as we predicted—under the government scheme. The government has now come back, having recognised its errors, and is seeking to amend its original error.

We want to be constructive. We proposed, we urged, we advocated change in precisely this space. We now see that there will be a large-scale renewable energy technology component, or LRET, of 41,000 gigawatt hours and a small-scale component of approximately 4,000 gigawatt hours but uncapped. So that figure will rise and we will be seeking advice on that. The financial impact, on the advice we have had in the last 24 hours on this legislation, is that the renewable target on household electricity prices has been approximately 4.2 per cent. It is approximately a 4.2 per cent increment on household energy prices. The best advice we have—and we will test this through the Senate process—of the incremental changes contained within this legislation is 0.22 per cent on household electricity prices. So we have been vigilant, we have been cautious and we have been concerned about changes, but those changes are, on the face of it, something which we will test but which, if they are proved to be correct, would appear to be acceptable. It compares with the 20 per cent increase in electricity prices that we would see over three years from the emissions trading scheme alone. That is over three years, with a price rise continuing significantly and greatly over the coming decade and beyond. That is why we take very different approaches.

Every change in this legislation produces clean energy. Not one element of the change under the emissions trading scheme—which would produce a 20 per cent impact on household electricity prices under the New South Wales IPART estimates—would result in any decrease in emissions. That is the essence of why we believe that that indirect approach is ineffective, whereas this form of direct action is, as a general rule, far more effective and a far lower cost.

Having recognised those elements, I want to mention that the coalition’s history is very strong. It was the coalition which put in place the mandatory renewable energy target of 9½ thousand gigawatt hours. It was the coalition which advocated the 20 per cent figure be decoupled from the emissions trading scheme so that there would be no delay and there would be no uncertainty for the providers and generators and those who would put in place solar, wind, geothermal and tidal energy—these great new energy sources of the future. It was the coalition that also put in place the $8,000 solar rebate at a time when solar panels were far more expensive. This $8,000 solar rebate, which was committed to by the now Labor government when they were in opposition, had a profound impact. It brought solar panels within the reach of ordinary Australian mums and dads, of farmers and of people throughout the country who wanted to make their own contribution.

We see, in comparison to the coalition’s approach, three fundamental things from the government. Firstly, on budget night in 2008, with no warning, the government abolished the $8,000 solar rebate for thousands and thousands of Australian families by imposing a means test which had not been considered, discussed or otherwise raised in public. It was a breach of an election promise—clear and absolute—and it had the immediate impact of sending the industry into chaos. Compared with what we did, the government also completely abolished the $8,000 solar rebate on 9 June last year, again with no warning. It was immediate, it was catastrophic and it sent the industry into a decline. That was unacceptable, it was unprepared, it was unprofessional and it was another example of the way in which decisions made with no understanding of real world consequences are being replicated today through the impact of the mining tax on investment and superannuation in Australia.

The third example of how the government undid previous coalition policies is that it abolished and suspended the Remote Renewable Power Generation Program as of 22 June 2009, again sending a segment of the industry into chaos. Lack of certainty has been the hallmark of the government’s approach to renewable energy in its term. This government has not been a friend of renewable energy. It has been a destroyer of renewable energy, with the solar rebate means tested, the solar rebate abolished and the remote renewable power generation or regional solar program ended. There has been chaos. All of these things have had real world impacts because the government has not understood how markets operate and how its decisions can affect investment and how its decisions can have catastrophic results for ordinary Australians, wherever they are.

This brings me to the fact that when we negotiated the legislation last time we were successful in five of our six asks—in decoupling this legislation from the CPRS or the emissions trading scheme, in ensuring that there was a reservation for waste coal mine gas on top of the legislation, in ensuring that there was a recognition of the hardships the energy intensive sectors would face, in looking to make sure that the different forms of solar hot water were appropriately and adequately treated and in looking to make sure that food processing was considered. The one area where we were not successful, where the government resisted, was in provisioning for the problem created by the establishment of phantom renewable energy credits. That problem which we identified is the very subject of this entire legislative process which is having to be redone. We warned, we identified and we provided alternatives, we provided solutions, and we did it again in the direct action program. The grand irony of this legislation is that the government is seeking to adopt our direct action program.

At present—here is something extraordinarily important—there is only one approach to reducing emissions in Australia. Only one of the major parties has a climate change policy. The coalition has a direct action policy; the government has no immediate approach to climate change. They are varying the renewable energy target, which we advocated and proposed, and for which we established the preceding legislation, but they are not proposing their own system for the forthcoming election.

The government have an approach to an emissions trading scheme which is not dead, only sleeping—but when it will awake we do not know. We do know that they have the emissions trading scheme out there but they do not have the courage to take it to a double dissolution. There is no barrier to the Prime Minister commencing it immediately. Again, for the record, I quote his words, to the Lowy Institute on 6 November 2009, on why his emissions trading scheme had to be passed that very moment. He said that to fail to pass it immediately would be ‘absolute political cowardice’, an ‘absolute failure of leadership’ and an ‘absolute failure of logic’. Those are the Prime Minister’s words about his own program, which he has now postponed indefinitely. It is not dead; it is only sleeping, but those were the Prime Minister’s words. With those words we get an insight into his character and leadership and his genuine approach, under pressure. By comparison, this legislation builds on what we have done.

We have reservations which we want to raise through the Senate inquiry. Those issues which we will explore include: firstly, any attack on the waste coal mine gas sector; secondly, the ability to increase waste coal mine gas; thirdly, the question of ensuring that high-electricity and high-intensity energy users are not subject to a major windfall impact upon them; fourthly, a proposal which has been championed by two of my coalition colleagues, Bronwyn Bishop and Wilson Tuckey, to establish an emerging technologies band, preserving 25 per cent of the LRET for emerging technologies other than wind. We were looking there at a figure of approximately 7,500 gigawatt hours. We include in that issue the question of whether or not HVDC powerlines could reduce emissions and therefore could be considered as a component of the large-scale renewable energy target.

However, those are questions for consideration during the Senate inquiry. We will consider them and, if we are satisfied with the answers, we will proceed; if we are not satisfied we will propose amendments. This legislation ultimately is in the vicinity of what we want to achieve. We will not give a blank cheque, because we have witnessed the tragedy of the home insulation program and the government’s ability to mismanage the simplest of legislative changes. We witnessed the capacity of the government’s mismanagement to do damage to this very legislative piece, in the face of warnings from the opposition. So there is no blank cheque. There is good faith; there is goodwill, and we want to see legislation proceed, generally. In consideration, we will put forward amendments during discussions with the government in good faith. Those talks have already begun.

At this moment we will reserve our position, but we note that we are the champions, the supporters of a 20 per cent renewable energy target. That target is in place, and we are the champions and supporters of solar, wind, geothermal and tidal energy. The government stood in their way and the government made the mistakes which have necessitated these acts of legislation. I would hope that at some stage the government will apologise to the renewable energy sector for ignoring the warning signs and necessitating these changes.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Before I go into substance on the Renewable Energy (Electricity) Amendment Bill 2010 and cognate bills, I remind the member for Flinders of two things. Firstly, apart from the former government’s introduction of the mandatory renewable energy target legislation in 2001 the coalition’s actual record on renewable energy is pathetic. No amount of rhetoric from the member for Flinders will change that, and I will allude to examples of it in the body of my speech. Secondly, to suggest that the coalition have a comprehensive climate change policy under a leader that regards climate change as ‘crap’—excuse the expression; it is not mine but it is his—is absolutely laughable. I know that you would feel that deeply, Mr Deputy Speaker Washer.

What I would like to do in terms of this legislation is to offer a narrative about the importance of renewable energy in Australia, particularly in my home state of Tasmania, and I would like to narrow that even further to the north-west coast and the west coast of Tasmania, in my electorate of Braddon. I would like to offer a narrative about the ups and downs of what I hope will be an exciting, expanded industry once all parties have agreed on policies that will allow the industry certitude. If one thing is true—you would know about it if you had listened to the member for Flinders and me in this place over a decade—it is that there has been no certainty for this important industry, and until now there is none for the future. That has been a sad legacy of policy development on both sides.

I am pleased that this legislation is now before us, and I was very pleased to hear that the member for Flinders will be offering bipartisan support for this policy, because this industry needs the certitude to go forward. This legislation is the means to allow the industry to make its investment decisions for the future. Along with the industry, I hope that the industry is allowed to get on with that.

Mr Deputy Speaker Washer, since the passage of the original mandatory renewable energy target in 2001, as you would remember, the large-scale renewable energy industry in Australia has been characterised by boom-bust cycles driven, as I have mentioned, more by the vagaries of government policy and policies than any other factor. In 2001 the 9,500 megawatt hour target inspired both home-grown companies such as Hydro Tasmania and international companies such as Vestas to invest significant dollars in developing clean, green power stations in regional Australia. The policy showed the pent-up demand for renewable energy was effectively filled by 2004—that is how much demand there was. The mandatory renewable energy target review in 2003 rightly recommended an expansion of the target between 2010 and 2020, but when this was not adopted by the Howard government—and I was staggered by the announcement—it had a major impact on the growth of the industry in Australia, which the member for Flinders so conveniently forgets to narrate. For example, Hydro Tasmania formed a partnership with China Light and Power to develop projects in China—not in Australia, in China—through Roaring 40s. In my own region, Vestas closed its factory in Wynyard and the potential for a wind blade manufacturing plant went cold, stone dead. It pulled the industry up in its tracks. The former government was not truly interested in renewable energy.

Interest in the industry picked up again in 2006-07 when the Labor opposition, now the government, proposed an expanded renewable energy target policy and, with the new government coming into power, the industry ramped up its efforts again. Unfortunately, due to the vagaries of policy shifts and changes, the toing and froing across this chamber and between the parties on the grander issue of climate change, and renewable energy as part and parcel of the solution to that, the investment certainty which we hoped would be there was not.

The concern within the industry about the uncertainty generated by the boom-bust cycles is clearly illustrated by the recent announcements from companies such as AGL, and Pacific Hydro in particular in relation to the Macarthur Wind Farm in south-west Victoria, emphasising that the billions of dollars of investment in renewable energy projects across Australia will not proceed without an effective and well-structured supportive policy, and that is exactly what this amendment is designed to provide. That is why it is absolutely crucial, irrespective of the rhetoric on both sides and perhaps different narratives, that this legislation is passed. Certainty is critical for any business to flourish and grow. It is a self-evident fact and it is very difficult for any sector to develop successfully over time when the rules of the operation change in the short term. Investment decisions by manufacturers, developers and financiers all require long-term certainty that will enable them to invest scarce capital with the expectation of receiving an adequate return.

One of the characteristics of renewable energy is that suitable sites for large-scale development, whether wind, solar or geothermal, tend to be in more remote areas away from existing urban, commercial and industrial areas. Examples include the Woolnorth wind farm in the far north-west of my electorate, the geothermal reserves in the Cooper Basin in South Australia, or the Solar Oasis project solar site at Whyalla also in South Australia. As a result, investment in renewable energy projects means investment in regional Australia, with significant flow-on benefits to the local communities in those regions.

In 2009 the Climate Institute commissioned energy sector consultants McLennan Magasanik Associates to assess the potential contribution of renewable energy to regional employment in Australia. The results, according to the Climate Institute, showed that $31 billion of renewable energy investments are underway or planned in rural Australia, which could create 26,000 jobs. This includes almost 2,500 new permanent positions, over 15,000 construction jobs, and more than 8,600 indirect jobs in supporting sectors. According to the institute, these are not pie-in-the-sky figures, but refer to real projects and real plans. McLennan Magasanik Associates also suggest that 30 per cent of the total investment would be spent on local goods and services, injecting around $10 billion into those regional areas.

In addition to these specific regional benefits, investment in renewable energy projects producing clean electricity could bring significant benefits to the wider environment and to public health through the reduction in greenhouse gas emissions and other pollutants with corresponding reductions in the costs of a degraded environment and ill-health. It is a recipe for the future, a recipe for good health, a recipe for an expanded economy. It is a great recipe for regional Australia.

What does it mean now? Until this legislation before us, the uncertainty over the RET, with the inclusion of the small-scale solar technologies unfortunately causing the price to tumble to around $27 in October 2009, meant that very few renewable energy projects have moved forward from development into construction over the last 12 months or so.

Notwithstanding that the announcement of the RET restructure in February 2010 pushed the REC price up to around $45, the trend has subsequently been a drift down towards $42—and projects need a price of around $50 to be financially viable. Until we get this legislation through, developments will continue to languish. The critical importance of the restructured RET in the legislation before us, with its separation of support for small-scale and large-scale renewable energy, has been clearly highlighted by comments from the CEO of AGL, Michael Fraser, who said:

Following the deferral of the introduction of the Carbon Pollution Reduction Scheme, stability and certainty are not the first words that come to mind in relation to investors viewing the Australian power generation sector. The RET reforms are an important way of restoring this confidence. The consequences of these reforms not being legislated before a Commonwealth election are a loss of investment, a loss of jobs, and a stalling of investor confidence.

That is why I was very pleased that the member for Flinders said that those opposite would support this legislation.

What does it mean for my home state of Tasmania? Tassie is blessed with world-class renewable energy resources; indeed, we are the renewable energy capital of Australia. These resources range from the water resources that have been effectively harnessed for hydropower generation for many years, through the proven wind resources of the roaring forties, to the potential for geothermal and tidal/wave power generation. However, although there are a number of proposed wind projects in Tassie, these projects will not be able to take advantage of the world-class wind resources without the REC price certainty that this amending legislation will bring.

In the north-east corner of Tasmania, Hydro Tasmania and the Roaring 40s company have poured millions of dollars into the proposed Musselroe wind farm over the years. Unfortunately, the boom-bust cycle of the industry has constrained its construction. Despite preliminary construction starting in 2009, it is once again stalled by the low price of RECs and policy uncertainty preventing the project from securing financing. Successful passage of the legislation before us is likely to secure the project, bringing a $400 million capital injection into the local area and delivering high-quality Tasmanian jobs in construction, engineering and environmental services. It is estimated there will be over 200 direct jobs during the construction phase, 30 full-time jobs managing the wind farm into the future, and many more indirectly.

In central Tasmania, NP Power, a private company, is seeking to develop the Cattle Hill wind farm at Lake Echo, with a DPEMP anticipated to be submitted to the Environment Protection Authority within the next few weeks. The project, worth over $500 million, could inject over $150 million into the local economy, with a similar number of jobs to the figures I mentioned for Musselroe. The current program suggests site preparation for construction could commence this year, but this is dependent on the successful passage of the legislation before us.

Meanwhile, in north-west Tasmania, in my neck of the woods, the landowner of Robbins Island is working with Eureka Funds Management to establish a wind farm on the island to take advantage of the world-class wind resources in the area. The landowner has been trying to get the project off the ground since the early 2000s, but so far this has been stymied by the boom-bust cycle of the industry, which I have mentioned several times in this debate and, indeed, over the last decade in this place. Eureka Funds Management is seeking to bring superannuation investors into the project, but these are naturally conservative players who need long-term certainty before committing to that investment. The project on the island—and I have been on the island, off the beautiful Circular Head coast, a couple of times—would probably be worth in excess of $1 billion, injecting $300 million into the local economy and bringing valuable jobs to an area which has been hit hard with recent job losses in the food and forestry industries. However, this is largely dependent on the successful passage of the Renewable Energy (Electricity) Amendment Bill 2010 that is before us.

In conclusion, I urge all those in this place to match the rhetoric of support for renewable energy with support for this legislation, giving certainty to those in this sector of the energy industry which I believe has often been treated in a very tokenistic manner. They do not have the clout of the major fossil fuel energy producers and do not get the advocacy in this House. It is quite clear from most of the conversations taking place in this House, both on current legislation and policy and on the CPRS and other pieces of legislation, that they do not carry that advocacy or that clout. But their contribution to lowering our greenhouse gas emissions and reaching proper emissions targets into the future is absolutely vital both to this country’s contribution globally and, most importantly, to our community and future generations. I strongly support this legislation. I look forward to all those opposite supporting this legislation and giving certainty to an industry that has been crying out for it for some time.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

I thank the member for Braddon for his contribution to this debate on the Renewable Energy (Electricity) Amendment Bill 2010 and cognate bills, which added little in terms of fact and a lot in terms of rhetoric, as we have come to expect from those who sit opposite. It is worth while at this juncture to put on the record that the only reason that we have a renewable energy target in place now is because of the coalition government. The coalition government put in place the MRET, of 9½ thousand gigawatt hours. The coalition government put in place a whole series of renewable energy assistance measures, all of which have contributed to a manyfold expansion in renewable energy in Australia, to the point where Australia has reached its target of 9½ thousand gigawatt hours earlier than expected, against the predictions of the doomsayers who now sit opposite. It is because of the actions of the Howard coalition government that Australia has been able to reduce its greenhouse gas emissions per megawatt hour of electricity generated. No-one is more committed to renewable energy than the coalition, because we do not just talk the talk; we walk the walk. We put in place the programs that built the wind farms that are currently there.

I notice that we are being urged to pass this legislation quickly. We would have liked to have seen this legislation six months ago. We would have liked the opportunity to have debated this legislation in February and March. We have no understanding as to why now, in the middle of the winter session, we are suddenly being rushed to give the certainty to the industry which the industry so desperately need to ensure that they are able to make the investments that need to be made in renewable energy over the next 20 years. We have no idea why we are doing this now. The coalition is supportive of the 45,000-gigawatt target. In fact, we signed off on that in August last year. Those in the House may remember that I was personally responsible for negotiating that outcome with Senator Wong, the Minister for Climate Change, Energy Efficiency and Water. Any time after that it would have been possible to introduce this legislation. We are at a complete loss as to why it has taken this long.

We know that one of the distractions for those who sit opposite is their complete abandonment of any meaningful approach to reducing greenhouse gas emissions through direct action or through an emissions trading scheme. We know that the Prime Minister, when speaking about the need to pass the Carbon Pollution Reduction Scheme, described our side by saying:

What absolute political cowardice. What absolute failure of leadership. What absolute failure of logic. The inescapable logic of this approach is that if every nation makes the decision not to act until others have done so, then no nation will ever act.

We all know that the Prime Minister repeatedly described the reduction of greenhouse gas emissions and the addressing of climate change as the greatest moral and economic challenge we will face in the 21st century. They are his words, yet he abandoned them. He abandoned them in a complete act of political cowardice—no explanation to the industry, whose expectations he had built up, and no explanation to anyone who ever believed that he meant what he said. He just walked away. He might bring the emissions trading scheme back in 2013, but he is not sure. He will not give that commitment to anyone. Instead, he continues to exaggerate the truth to the point of not telling the truth when he says that this renewable energy legislation will allow this government to meet its carbon reduction target of five per cent.

I used to be pretty good at maths and I still am. This legislation will only reduce greenhouse gas emissions by 40 million tonnes per annum. The Prime Minister needs to reduce greenhouse gas emissions by three to four times that amount if he is going to reach the target which he has set himself. What sheer hypocrisy. We should be used to that from this government. We should be used to the Prime Minister saying things he does not mean. We should be used to him changing his mind on a whim. We should be used to him not being committed to a reduction in greenhouse gas emissions, because that is his position on everything else. He has no commitment on any issue. He is driven by the polls every weekend. He is driven by the latest public opinion. He is driven by the latest numbers. He does not commit to any issue anymore.

When the government actually proceed with a project, they make a complete mess of it. They overspend not by hundreds of thousands of dollars, not by millions of dollars, but by thousands of millions of dollars. Billions of dollars of taxpayers’ money has gone to waste in a series of programs. Those of us who will come after the government will have to pay that money back, whether it is in the next term of government or whenever. We know the Labor debt is going to be huge. It is already $100 billion.

So we come to the issue of renewable energy and its role in ensuring that greenhouse gas emissions are reduced, and we ask ourselves: where does this fit in the overall plan of the government to reduce greenhouse gas emissions and to reach the target? It is there by itself. It is the only thing that is going to play an active role of any great significance in reducing greenhouse gas emissions. By my arithmetic—and, I am sure, by the arithmetic of the Minister for Climate Change, Energy Efficiency and Water—it is going to fall well short.

We need this legislation, and the coalition supports it in principle. We do reserve the right to move amendments in committee in the Senate once we get the Senate Environment, Communications and the Arts Legislation Committee report back. We have had discussions with Minister Wong’s office and with industry proponents to ensure that the legislation does what it is supposed to do. Its basic format—that is, the establishment through these amendments of the LRET and the SRES—we support. We understand, dare I say better that than those who sit opposite because we have actually done it, the importance of getting a scheme in place where there is certainty, particularly for wind farms. We understand the uncertainty that this government created through its own actions by cutting back the subsidy to photovoltaics and trying to add them to this new scheme with a multiplier factor to try and keep the numbers of photovoltaics up and the level of subsidy up. This is its own mess. It created this. The people who sit opposite these benches—the people in Treasury and Finance who penny pinched, the Treasurer, the Minister for Finance and Deregulation, the Prime Minister, the Deputy Prime Minister and the ones who penny pinched the photovoltaic program—have created this problem which we are now asked today to fix, and we will because we believe in constructive opposition. That again is our record.

We agreed to the splitting off of the 41,000 gigawatt hours of LRET and the creation within that of the new segment that comes on top of the 9,500 gigawatts of MRET. We believe that is the only way you can give certainty to the industry that has come to rely on the predecessor to this legislation and to the legislation that was passed subsequent to the discussions last August.

We also support in principle the establishment of the Small-scale Renewable Energy Scheme, but we do have concerns that, on initial modelling, that scheme is going to blow out significantly. It could perhaps blow out twofold to threefold on the 4,000-megawatt allocation which is uncapped but which it is intimated the small-scale renewable energy target is set at. We are going to have some further discussions on that. One of the things we want to see, if this part of the scheme is able to be crystallised, is some of the abuses that are taking place in that solar heat and solar energy sector, which will be supported by the SRES, stop.

I have evidence of a motel in South Australia where heat pumps were fitted in place of gas hot water systems for which the government subsidy was greater than the capital cost of the pumps. The government are giving them away and they wonder why their modelling shows that this part of the scheme is going to blow out. That has to stop. The minister has assured me it is going to stop. It has to stop now because we need to make sure that the consumers of renewable energy are not paying for rorts, and that is a rort. The solar pump industry know it is a rort. They have admitted in my office it is a rort and it will stop.

We will support the SRET component. We will support the photovoltaic component of that. We will support the solar hot water system component. I am a great supporter of solar hot water. I know from time to time conservation groups want to attack its contribution, but the most energy efficient, lowest emission way to produce hot water is on a gas boosted, solar hot water system.

At my own expense—no subsidies from government, of course—I recently installed a gas booster to my solar hot water system. That solar hot water system has been in place for probably 15 years. Each night it heated water with electricity from a coal fired power station and I wanted to stop that. I know from personal experience that I now have the lowest emission system that you can buy in Australia. But we need to ensure that they are the systems that are being fitted and we need to ensure that when people put in solar hot water systems they put in a gas booster, because that lowers the emission footprint even further. Not all hot water is heated by the sun. A proportion in those systems is heated by fossil fuels. We need to ensure that that part of the scheme is promoted. We need to ensure that, where electric hot water systems have to be replaced and where there is no access to mains gas, the next best lowest emission option is put in place, and that is solar heat pumps. I have no problem with solar heat pumps. They have a role to play. They reduce emissions, they provide efficient heating of water, but they are not the best option. The best option is gas boosted solar electricity. We need to ensure that there is room left in the SRES for them.

We need to ensure that in the photovoltaic area people are able to make a reasonable investment in photovoltaics and get a reasonable return. There is an argument on the other side in relation to reasonable rates of return. They say that, for the mining industry, a reasonable rate of return is six per cent. No-one will invest in photovoltaics at six per cent unless they are a zealot like me. If we are going to have widespread installation of photovoltaics, we need to ensure that part of the SRES works. We need to ensure there is consistency in the message we send out there.

We need to also ensure we do whatever we can to encourage new technologies into the LRET space and that wind does not crowd out the emerging technologies, particularly geothermal, which I think has the greatest potential in Australia to provide 24/7 baseload renewable energy into our grid. We need to ensure that biomass gets an opportunity and, where possible, small-scale hydro gets an opportunity. Hydro is generated at peak times through pumping water back into the reservoir during off-peak times. Those sorts of schemes have to be given the opportunity to take their part in the RET.

As we go forward on this issue, I give my commitment to this parliament that I will negotiate with the minister, Senator Wong, in good faith to ensure that this legislation is passed, but my grave concern is that this government have left this for so long that they will attempt to play politics with it. They will attempt to dare us and try to put in front of us obstacles that we cannot climb over. They will attempt to do what they can to score political points out of that. Why do I say that? Because that is what they have done for six months. This legislation should have been introduced in February, but we saw a Prime Minister more interested in trying to get the political wedge in on climate change than in getting this legislation through. And then, when he turned around and ran and showed political cowardice—his words, not mine—he had to try and get us to rush this legislation through without due consideration. We will consider it, but in the meantime let me assure the Australian people that the coalition will continue to do what we can to lower Australia’s greenhouse gas emissions.

Along with supporting this legislation and the reductions that it will produce, we will continue to work to ensure that one of the key elements that this government has not addressed—a lot of talk, no action—which is energy efficiency, is also promoted, and we will look at options to make sure that people understand energy efficiency. In my time as energy minister I was a strong proponent, and I still am, of ensuring that people understand the true cost of electricity, the true cost of what they are consuming, so that they have in their kitchen a device which tells them when they are using high-cost electricity. It is called a smart meter. Surprisingly, I have got one of those as well and I have had one for six years. Until we explain to people the cost of electricity, they will not move to energy efficiencies, and we need to get them to do that.

The third cornerstone of the coalition’s commitment to reducing greenhouse gas emissions is our direct action plan. Contained in that is the Emissions Reduction Fund, which will urge and assist businesses to reduce their emissions below the baseline of ‘business as usual’ activity. We also have a very significant commitment to soil carbon—the use of the soil to sequester carbon in such a way that that carbon is then tied up. That can be through a range of biochars, through a change in agricultural practices and through the growing of trees that are going to be long-term carbon sinks, but we need to do more in that area, and the coalition, our party, are committed to that.

We are also committed to ensuring that we do what we can to boost the commercial development of solar energy, both photovoltaic and thermal, as well as the small-scale use of solar energy. The coalition will commit $100 million to our Solar Towns and Solar Schools Initiative to ensure that grants are provided to towns, non-capital cities and schools to access direct solar energy for onsite use and for return to the power grid.

The coalition are a party committed to reducing greenhouse gas emissions. We are a coalition that has a track record in this area. We are a coalition that paved the way and led the world in the introduction of a mandatory renewable energy target. We are a coalition that remains committed to direct action—to actually getting outcomes, not just talking the talk but walking the walk.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

In 50 years time I think there will be people looking back at some of these speeches on the Renewable Energy (Electricity) (Charge) Amendment Bill 2010 and cognate bills and wondering what the hell was going on in the climate change debate in Australia in 2010. It is a bizarre world we live in. We had the member for Flinders spending most of his speech trying to prove that the opposition are actually the champions of renewables. The government cannot be the champions of renewables because the opposition are the champions of renewables! The coalition are the champions of renewables; they did it all, they had all the ideas. Given the seriousness of the issue of climate change, it is time for us all to be champions of renewables and to recognise that that is actually what we need in this House. We need to acknowledge each other’s support for this and get on with it and stop arguing about whose idea it was. Let us just deal with it.

The first mandatory renewable energy target was introduced by the Howard government in 2000. It was set at that stage with a 9½ thousand gigawatt target by 2010. There was a report done in 2003 known as the Tambling report which made a number of recommendations, including that the target be increased to 20,000 gigawatts by 2020. That recommendation was not accepted by the government of the day. Nevertheless, they did introduce some programs—rebates for solar panels, for example. All of that should be acknowledged. But we should also acknowledge that, at the moment, where we are in Australia is a hell of a long way from 20 per cent renewables by 2020. In 2006 we were at four per cent. We still get the vast majority of our renewable energy, electricity, from the Snowy hydro scheme—still, now.

The world has known for 30 years. Governments of the world first met in the 1970s to talk about the need for action on climate change. So we have known about it now through the Whitlam government, arguably, the Fraser government and the Hawke and Keating governments—although the need became greater and the knowledge became greater. We certainly knew about it through the Howard government and we know about it now. It has been a long time coming, and the time for arguing about whose idea it was is well and truly over. It is time for consensus on this. We thought we had that when we introduced the Carbon Pollution Reduction Scheme. Certainly, both parties went to the last election promising an emissions trading scheme. We thought we had it up until two days before the final vote in the Senate. It is time for us to get that consensus back so that this nation can play its role in acting on climate change.

We have heard two extraordinary speeches. We heard the member for Groom, who voted against the CPRS, lamenting that this piece of legislation will not make the kinds of reductions in emissions that we need to make to meet our five per cent target by 2020. Of course it will not. It was designed to work in operation with the CPRS; it was designed to be phased out after 2020 as the CPRS became more mature. This bill is part of a strategy. It alone will never lead us to meet that target. We need the Carbon Pollution Reduction Scheme to do that.

What we have at the moment is an opposition, the Liberal and National parties, that voted against action on climate change. Many of them do not believe in climate change. The Leader of the Opposition himself said openly that he does not believe in climate change. We have the Greens party that voted against it.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

You guys don’t believe in it.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

We introduced the bill. We introduced it twice. We voted for it. The opposition voted against it. We voted for it twice. It is the greatest moral challenge of our time, and if you believe that then I am sure you would have voted for it. I can only assume that you, like so many of your colleagues, believe that it is absolute ‘nonsense’—and I use that word because I am being polite in this House—as your leader has said, and well you know.

This amendment today is an extremely important one, and it is welcomed by many of the small producers of renewable energy technology in Western Sydney. It reaffirms our target of 20 per cent of Australian power to come from renewables by 2020, but it alters slightly the mechanism to get there. It does that essentially by separating the large suppliers of technology from the small ones. It creates two systems with their own fabulous acronyms. I am getting very tired of the acronyms, I have to say. I have invented a new one: the TLA—the three-letter acronym. I see today that we have some FLAs—four-letter acronyms. Like names, I believe we can only hold about 200 of these in our heads at one time. Some of these acronyms are starting to slip out of my brain. We now have the large renewable energy target (LRET) for large providers and the Small-scale Renewable Energy Scheme (SRES) for small-scale systems such as solar panels and solar water heaters through the creation of a small-scale technology certificate, known as STC.

It has been separated into two because last year when the government decided to include photovoltaic solar panels in the Renewable Energy Target Scheme, the demand for solar panels grew significantly and started to impact on the price of the renewable energy certificate. This made certainty in this area, particularly for large investors, very difficult. This amendment reasserts stability essentially by separating the scheme into two parts, with the large scheme having a target of 41,000 gigawatt hours and the scheme for small-scale systems having a target of 4,000 gigawatt hours. It is a very sensible amendment that will provide certainty for a very important sector that works to move the Australian economy from a carbon based economy to a low-emissions economy. We absolutely need to do that. The science on climate change is well and truly in, and we can see action now around the world as other countries seek to set up their systems for the future.

Australia should be a leader in this field. The rejection of the CPRS by the opposition and the Greens makes it very difficult for us to move forward with the kind of speed that we should. But it is necessary for us to move from a carbon economy to a low-emissions economy. Australia is one of the great creative nations in the world. I said in the appropriations bill debate yesterday that we have come to think of ourselves as a country whose wealth is in the ground. Our minerals have, of course, served us very well, as has our farming community. But so have our imagination and our innovation. About 15 years ago, we were a world leader in solar technology. We held the largest market share. We of course do not do that now. But we are also a nation with great resources for renewable energy. We see countries like Germany and Spain moving ahead very strongly and investing in renewable technology without anywhere near the level of natural resources that we have in this country. We have the sun, we have the wind, we have the waves, we have the hot rocks technology and we have the imagination among our researchers and scientists to make this work for us. We should be well and truly a world leader. We need to actually move now. The earlier we move on this, the further ahead we will be in the future.

Solar technology is particularly interesting. I was looking at a map of Australia and at the varying levels of sun exposure around the country. Essentially, the further north you are, the higher the price for your certificate because clearly you generate more power in the sunnier parts of the country. Virtually all of Australia is closer to the equator than Europe. If you turned the world upside down and looked at the map of Australia, Tasmania would actually be in the Mediterranean. All of the rest of Europe is further away from the equator than Tasmania, yet we see European countries moving on solar technology at a rate that puts us to shame. Remember, again, at this point in Australia’s history, in spite of all of our natural resources the vast majority of our renewable electricity supply still comes from the Snowy hydro scheme—after all these decades. We have an incredibly long way to go.

I commend this bill to the House. It is an important amendment. It is an amendment that will provide certainty for both large- and small-scale providers of renewable technology and will go at least part of the way in setting us up for a low-emissions future.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

The Renewable Energy (Electricity) Amendment Bill 2010 and cognate bills have a modicum of support from the coalition. If the member for Parramatta would hang around for a minute, though I do not think she is going to, I would tell her a couple of things about Spain. Spain is broke. Spain did get into renewables and there is plenty of evidence to show that renewables have had a detrimental effect on their economy. It is now one of the three countries in the European Union that appears unable to pay its debts. Of course, that is having an effect here in Australia.

The member also said the Europeans were going for solar—and they are. You are the member representing Newcastle?

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

No.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

I have got the areas in your electorate wrong; there has been so much shifting around of boundaries. It so happens that in Newcastle the CSIRO is conducting some very interesting solar technology experiments. The Europeans are now going to North Africa to generate their solar energy. This makes another point about over-investment in photovoltaics in Melbourne or in Tasmania: the Europeans are going to where it is hot. They are talking about gigawatts of generation—and I will again draw to the attention of the House where the deficiencies reside in this legislation—and they are going to use high-voltage DC transmission technology to get that large quantity of power from the most suitable place back to Europe. That is over 3,000 kilometres. They looked at the options. They looked at our creaky old AC system and discovered that they would lose between 25 and 45 per cent of the power on the trip. They looked—quite interestingly from my perspective—at turning electricity into hydrogen at the point of generation. That was a very good idea but they would lose 75 per cent of the energy on the trip. Then they went to high-voltage DC where they will lose 10 per cent of the power on the trip—three per cent per 1,000 kilometres. That is a doubling of the power that comes out at the end of the pipe, if you like, and a halving of emissions per kilowatt hour where emissions occur.

Nothing in this legislation gives any credit to anyone investing in DC technology, although some have. We have such a line across Bass Strait. We have a line connecting New South Wales with Queensland and another connecting Victoria with South Australia. They were not built for efficiency reasons. The two connections were built because they could be buried and that looked nicer than other circumstances which we so often see when we start to shift AC power around the countryside.

We give Australia as an example as a leader in wind power technology, to which this legislation gives a privileged position, but what are we going to teach the Danes and others about wind generation? A technology that is in its infancy is solar reflector. Trials of this technology are being conducted in the desert. There is still an opportunity with this technology to ‘lead the world’. However, the Chinese are doing a pretty good job of that at the moment with another technology, HVDC. The Europeans also see benefit in HVDC technology. This technology involves converter stations worth $300 million each—and they are pure technology; the other bits are just wires.

A fact of life is that this legislation misses out on the emerging technologies. It makes no special arrangements for them. When the original 20 per cent RET was brought to this House some negotiations were concluded between the government and the opposition, yet the one provision the government refused to accept was that of emerging technologies. The government refused to compartmentalise the situation regarding technologies that might be deemed to be renewable. I went as far—I might add with the approval of my party room, who openly admitted our negotiators could not get the government over the line on such a sensible proposition—as supporting a private member’s bill that still stands in this House. That bill does two things which this legislation should be doing. It restricts any specific technology response to renewables to a percentage of the total available certificates. In other words, nobody can crowd out the marketplace. The government has had a lesson on this. We have a technology which by any measure when properly calculated delivers electricity at 60c a unit. Our economy cannot survive on 60c a unit. If the government pays half the price of the gear then it looks a little better. But if you want to invest your own money on photovoltaics and be paid for the electricity that feeds into the grid—a feed-in tariff—it has to be 60c a unit. That can be reduced if the government gives you an upfront rebate. That is the nature of the efficiency of that technology.

A graph on my website shows that there is barely a population centre in the world that is further than 2,700 kilometres from a desert. The Victorian government is subsidising a firm to build, I think, a 125- or 150-megawatt solar power station near Mildura—that is not a bad idea—and the Commonwealth is putting money into it. The proponents of the station attended a seminar at Parliament House conducted by people like me who are interested to know the realities of these matters on power generation so as not to make silly speeches about it in this place. They said that, if they could shift the plant 50 kilometres further north into New South Wales, they would get 15 per cent more energy for the same money and the same sized equipment. Why isn’t it going there? Because the Victorians are not going to pay to build it in New South Wales. But that is where it should go. If you built it at Marble Bar, which is recognised as the hottest place in Australia, you would get even more for your money.

Where are the best places to build solar facilities? Not on the roofs of the houses of Melbourne. We should not contemplate it, and we further should not contemplate paying a subsidy and a feed-in tariff, as is now occurring; we should have one or the other. The Europeans use a feed-in tariff; up to the present Australia has used both, because the states have one and the Commonwealth has the other—which is another problem with the federation, I guess. The question I am asking is: do we want to consider the serious options? In the minister’s second reading speech to this bill, the best renewable energy available to Australia is not even mentioned, and it has the capacity to replace all of Australia’s energy consumption. It happens to be the tides of the Kimberley. I saw some information the other day that the Koreans are about to commission what will be the largest tidal power station in the world—slightly bigger than the one at Rance in France, which has been operating for 40 years. It will produce about 240 megawatts. In Western Australia, that is a typical coal fired power station in size. When I saw the documentation I was so surprised at the cost that I planned to ask some more questions. It is being built by Daewoo, one of the great construction companies of the world, at a price of $350 million—for 240 megawatts. You cannot build a coal fired power station for that, yet this legislation and the minister’s second reading speech do not even mention it.

Things change. The Kimberley happens to be a great distance from where people presently consume electricity, but, there again, we are going to see in a relatively short period of time large quantities of gas come ashore in the Kimberley, at James Price Point, from the Browse field—that is, of course, if that project does not get written off on account of the government’s new tax on mining and petroleum production, for which the company would have to pay on the new scale, not the old. When that gas comes ashore, someone is going to say, as Rex Connor and others did, ‘Build a gas pipeline across Australia so we can have some of those benefits on the east coast.’ The interesting thing is that the pumping of gas along the existing pipeline from the Pilbara to Perth and to Bunbury, south of Perth, is now emitting 700,000 tonnes of carbon a year. It is consuming the equivalent in energy of one coal fired power station. Why would you do that? Why wouldn’t there be an incentive to build a high-voltage DC line into the Western Australian network to generate the future gas fired power requirements in the Pilbara? You would save hugely on emissions and you would, in fact, save energy. You would have for sale gas that is presently being consumed in pumping gas along this pipeline.

Furthermore, there is a security issue that, as I keep trying to tell my colleagues in Western Australia, is very important. They are now burning gas from that pipeline to produce 60 per cent of Western Australia’s electricity requirement. Just think of what would happen in Western Australia if something went wrong with that pipeline; whereas, if they were bringing in a separate supply on HVDC and the government of today had the intelligence to understand that that is a good investment for the renewable energy target, then there would be more security, a reduction in emissions and a cheaper transmission of energy. Of course, if you then ran similar wires up to Browse to do exactly the same thing and you ran another set of wires from the Western Australian network to interconnect with the Eastern States network, the efficiencies would be unbelievable. You have, by the transmission of electricity, virtually built the pipeline that Rex Connor wanted to build from the Pilbara to Sydney. You have given gas fired, low-emission energy, without the losses associated with pumping the gas, to the people of eastern Australia from places as far away as the Kimberley.

What else have you achieved? You have achieved access to a huge resource—and it is the only predictable resource of a renewable nature in Australia: the tides of the Kimberley. That opportunity is not there at present. Some people would say, ‘How much would it cost to build thousands of kilometres of high-voltage DC transmission lines to reduce the cost of electricity, to improve its efficiency and to reduce emissions?’ It would cost about the same as what the pink batts program will eventually cost—about $5 billion—and it would be done, as I have just described, progressively.

Why is that ignored in this legislation? Is it because the opposition thought of it, or because Wilson Tuckey thought of it and stood up in this place and made the point with a private member’s bill? This legislation has come back to the parliament because it had no influence over individual renewable energy technology. What happened? Photovoltaic energy has crowded out the market and the wind generators have started to squeal. In the present environment, I am not in favour of investment in wind generation because it does not reduce the emissions from coal fired power stations. Any person who is in any way associated with that technology knows that it has the lowest level of responsiveness that you could pick out amongst the various systems. To maintain the power needs of the consumer market, you cannot put faith in wind. You cannot just say, ‘Oops! Chuck another shovel of coal on the fire.’ The decision as to how much power a coal fired power station has to put into the system at five o’clock has to be made at three o’clock. So what do they do? They keep burning the coal, maintaining a surplus of steam pressure in anticipation that maybe, for a nanosecond, the wind will give up.

If anyone wants to argue with me about the vagaries of the wind, I refer them to about 1,000 songs that have compared it to all sorts of other matters. It is a known factor. It is not a good choice. By comparison, tides can be predicted to the minute. You know what you are going to get and, if you have to call on other resources, you know exactly when to do it—by virtually going to the fishing box and looking at the tide flows in different places.

In the Kimberley at this moment, a company has a contract with Argyle Diamonds to provide about 50 megawatts with tidal power in the tidal stream of the Ord River estuary. Do you know why it is delayed? Because, to create baseload power, they are going to build a dam on a 100-metre high hill and, during the peak of the tidal movements, use the surplus energy to pump water up there which they let flow back down through a hydro style system for the purpose of maintaining their baseload. But they have a little problem. To comply with native heritage and other things, and being good corporate citizens, they have gone to the Kimberley Land Council and asked them to conduct the heritage survey, and said they will pay for it. They cannot get it done, so the emissions go on. Argyle Diamonds still keeps producing electricity with diesel generation because a land council will not even take someone’s money to do the job! All these things are silly.

Consequently, the coalition has referred the matter to a Senate committee—and I will be sending them this speech—to make the point that this legislation should read not as an apportioning of entitlement to large and small or whatever; it should simply restrict any technology to 10, 15 or 20 per cent—or whatever the parliament decides—of available certificates. That leaves the door open to emerging technologies mentioned in this paper that will never get to the starting line under the legislation as proposed. Wind has the front-running position. It would be like the Stawell Gift: it has a positive handicap. Of course, the only reason it is in trouble is that, under the old rules, the small-term photovoltaics have had it. But we are just moving from one problem to the next when we should make it clear that at least 50 per cent of the certificates should be for new and emerging technologies, including transmission systems, particularly HVDC, as a renewable power source. If they deliver twice as much electricity at the end of the pipeline, they have doubled the amount of electricity and halved the associated emissions, be it from a coal fired power station or anything else. These are the issues. (Time expired)

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

The purpose of the Renewable Energy (Electricity) Amendment Bill 2010 is to separate the Renewable Energy Target Scheme into two parts: the large-scale renewable energy target and the small-scale renewable energy scheme. These changes will provide greater certainty for both large-scale renewable energy projects and installers of small-scale renewable energy systems. The large-scale renewable energy target will encourage the deployment of large-scale power generation using energy sources such as wind, solar, biomass and geothermal, while the small-scale scheme will provide continuing support to households, businesses and community groups who install renewable energy systems like rooftop solar panels and solar hot water systems.

The enhanced scheme is important in delivering the government’s commitment that at least 20 per cent of Australia’s electricity will come from renewable sources by 2020. The large-scale renewable energy target will deliver the majority of the 2020 target while the small-scale renewable energy scheme will deliver the remainder of the target. Combined, the new large-scale target and the small-scale scheme are expected to deliver more renewable energy than the existing 45,000 gigawatt-hour target in 2020. The degree to which the 20 per cent target is exceeded will depend on the uptake of small-scale systems by households, small business and community groups.

The benefits of the renewable energy target and the recent changes are already being realised. Within a few days of the government’s announcement to enhance the renewable energy target, AGL announced that it had entered into conditional arrangements for the construction of a 365-megawatt capacity Macarthur wind farm in south-west Victoria. The renewable energy target is part of a suite of government policies encouraging the switch that we need to make to cleaner energy. To complement the renewable energy target the government is making significant investment in generation-scale renewables through the $4.5 billion Clean Energy Initiative. This initiative includes the $1.5 billion Solar Flagships program to support the construction of large-scale, grid connected solar power stations operating within the energy market; the Australian Solar Institute, which will help to retain the Australian solar expertise and develop the next generation of Australian solar researchers; and the Australian Centre for Renewable Energy.

The Department of Climate Change and Energy Efficiency estimates that the enhanced renewable energy target will add less than $4 per year to the average household electricity bill. The 2010-11 budget also demonstrates the government’s commitment to building a renewable energy future for Australia. The government will boost existing investments in clean and renewable energy and support greater energy efficiency measures through the Renewable Energy Future Fund. That new Renewable Energy Future Fund—$652 million—will leverage private-sector investment to support large- and small-scale renewable energy projects such as geothermal, solar and wave energy.

The Renewable Energy Future Fund will also accelerate development and deployment of low-emissions technologies and increase Australia’s take-up of energy efficiency measures in both households and businesses. The fund will include partnerships between the government and the private sector to make critical early-stage investments to leverage private funds to support the commercialisation of renewable technologies. Together with the Clean Energy Initiative this additional funding brings the government’s total investments in renewable and clean energy and energy efficiency to over $10 billion. The Labor government is facilitating through these reforms the means by which Australians can do their bit to conserve energy while also creating new clean industries and jobs.

In my own electorate of Wills I recently attended the Plumbing Industry Climate Action Centre’s ‘Sustainability in the Home Day’, where I inspected and learnt about the great work the centre is undertaking to train and skill trades people in energy-efficient and green collar jobs. I learnt about how the centre is helping people reduce their energy and water consumption around the home and playing a vital role in helping us combat climate change at the grassroots level. The centre’s website points out that there is general consensus that buildings produce 40 per cent of the world’s greenhouse gas emissions. The Plumbing Industry Climate Action Centre—PICAC—offers a solution to deal with this issue swiftly and economically.

The Plumbing Industry Climate Action Centre will provide plumbing training to practising plumbers with a focus on sustainability, energy saving, waste reduction and water conservation. The training centre’s facility is a five-star Green Star rated building that will trial and promote new technologies—a working example of innovative design and sustainable plumbing. At the opening of the facility the Victorian Premier commented:

Green plumbing is the number one skills issue for Victorian plumbers, with a recent report estimating that no more than 10 per cent of the State’s 20,000 plumbers have sufficient green skills to meet the growing demand for environmentally sustainable plumbing. To date, 3,000 Victorian plumbers have attended Green Plumber’s courses. This number will grow considerably as the Plumbing Industry Climate Action Centre rolls out its programs to the broader plumbing workforce. The centre will play a leading role delivering sustainability skills for the Victorian plumbing industry and will be critical for driving growth in the Victorian green plumbing sector and creating jobs.

Deputy Plumbing Industry Commissioner Sarah McCann-Bartlett said the centre was a credit to the industry in its united response to climate change. She said:

This wonderful facility will allow qualified plumbers to gain hands-on experience in working with the green technologies that will put Victoria’s plumbers at the forefront bf the fight against global warming.

Plumbers have a huge role to play in making our environment cleaner. Over 70 per cent of all energy consumed in the home is related to work carried out by plumbers. In commercial buildings the greenhouse gas emissions are principally due to cooling, air handling, lighting and heating. Over 60 per cent fall under the watch of the plumber. So industry will expect that the sector is able to provide the best advice and processes to comply with government targets for the reduction of greenhouse gas emissions.

I congratulate the Plumbing Industry Climate Action Centre on their fantastic work and look forward to working with them and the wider community to help the Wills electorate reduce its carbon footprint. It is a world-class facility, and I congratulate Earl Setches, the plumbers union secretary, on his innovative work and vision in relation to this area. It is a project which involves employers and it is a project which is innovative. It was very interesting to see the cogeneration plants, which have the capacity to meet the needs of large-scale high-rise buildings, and also their geothermal facility. Most people associate geothermal energy with outback Queensland or South Australia, drilling down deep into the earth’s crust. In fact, they have a geothermal facility which drills about 30 metres into the soil in Brunswick and heats up water there and uses that to produce heated air and generate energy in that fashion.

I also want to reiterate my support for the idea of feed-in tariffs, which I believe have considerable potential to help us meet and exceed our renewable energy target. The member for O’Connor expressed opposition to that proposition. I disagree with him strongly. The Council of Australian Governments have agreed to work towards the adoption of a set of national principles to apply to new state and territory feed-in tariff schemes. These principles should advance the fair and reasonable treatment of small customers, with renewable microgeneration, including solar panels, as well as consider the interests of electricity customers.

Access Economics has found that Australia has the potential to double the number of people employed within the renewables sector through the introduction of a national gross feed-in tariff over the next 10 years. Feed-in tariffs encourage individual homes, factories, schools and building sites to become minipower plants, meeting their own power needs through the production of renewable energy which does not emit global warming emissions. Feed-in tariffs build community awareness, as individual households feel empowered in making a contribution to the mitigation of climate change. Further, by decentralising alternative power generation, you minimise the problems of the geographic concentration of such facilities. That will provide a security dividend. Small on-site generation makes the electricity system less vulnerable by reducing the grid instability that can result from the loss of a large power generator. Most people associate feed-in tariffs with solar PV, but solar PV is not the only way that households and commercial properties can generate their own power. Innovative work is being done on things like small wind plants and even geothermal installations. The Alternative Technology Association has concluded that, while the greenhouse benefits are often touted, the benefits of grid-connected solar PV are far greater than just greenhouse gas reductions.

Solar is a clean source of electricity, and its widespread adoption will result in significant economic savings to all consumers in two ways: (1) through reduced wholesale electricity prices, as output of solar PV systems corresponds closely to peak demand when the wholesale electricity price reaches its maximum; and (2) avoiding network augmentation—that is, new power stations and transmission infrastructure—by generating electricity close to the point of consumption and at times of greatest stress on the network. I do not think that the cost to Australian electricity networks is commonly appreciated, given they are talking about spending another $24 billion over the next five years on network upgrades and with network charges accounting for around 45 per cent of consumers’ retail electricity bills. Clearly, if you are able to stave off this large investment in infrastructure by encouraging consumers to engage in their own rooftop infrastructure investment, both the planet and consumers will be better off.

The Alternative Technology Association did some calculations of costs in relation to Victoria and concluded that ‘Victoria would achieve a 100-fold increase in solar capacity’, or 250 megawatts, on an average of a little over $9 ‘per year over the life of the scheme’—a ‘price increase of less than $1.50 per month’. These calculations include an exemption for cost recovery for low-income households—those eligible for energy concessions—as well as large electricity users connected directly to the electricity transmission network. Even with these exemptions, which effectively concentrate costs to typical domestic and commercial consumers, typical increases in electricity bills resulting from the feed-in tariff will be of the order of less than 0.6 per cent. I know that the Electrical Trades Union have done considerable research into the feed-in tariff proposal, and I commend them on that work and on showing that vision.

The transition to a clean energy future is also going to require dramatic improvements in the way that we use and distribute energy though the grid. This is why the Labor government has created the $100 million Smart Grid, Smart City project. The Smart Grid, Smart City initiative which will demonstrate Australia’s first fully integrated, commercial-scale smart electricity grid. This rollout will help consumers save energy, use smart appliances that run on off-peak power and connect their own clean energy to the grid. According to the Economist:

In order to accommodate the flow of energy between new sources of supply and new forms of demand, the world’s electrical grids are going to have to become a lot smarter.

A smart grid is the key to allowing green energy and distributed and intermittent energy into the energy network. The Economist outlines that such a ‘smart grid’ or ‘energy internet’ would be far more responsive, interactive and transparent than today’s grid. It would be able to cope with new sources of renewable power, enable the coordinated charging of electric cars, provide information to consumers about their usage and allow utilities to monitor and control their networks more effectively. All this would help reduce greenhouse gas emissions, and we need to assist that move to electric cars.

The consumer interface with the smart grid is the smart meter. This tracks electricity use in real time and transmits that information back to the power company. It makes energy consumption and sourcing more visible to the community, engaging their awareness in a similar way to addressing water consumption—that is, by making its measurement more effective and better monitored. The most effective meter would connect appliances in the house to a meter which can be tweaked to power up anything from a freezer to a washing machine according to spot energy prices on offer from the distributor or the availability of renewable energy and then communicate that process in a simple and easily understood format to the consumer.

Studies have found that when people are made aware of how much power they are using they reduce their use by about seven per cent. With added incentives, people curtail their electricity use during peaks in demand by 15 per cent or more. Recently I and the Parliamentary Secretary for Innovation and Industry, the member for Corio—who is in the House—recently visited the CSIRO’s zero emissions house in Melbourne’s outer northern suburbs. There we were able to see some of this initiative being put into place in a practical way. By reducing the peak level of demand, utilities can not only improve the stability of the system but also, due to reduced consumption, postpone the construction of new power stations.

A smart grid will make it easier to manage the intermittent and dispersed sources of renewable energy, such as rooftop solar panels and backyard wind turbines. It will also facilitate electric vehicles to be charged at night—the optimal time for which is at night, when electricity is less expensive—while also absorbing excess power from wind turbines on windy nights but feeding power back into the grid if necessary if the wind suddenly drops. This problem greatly exercises the mind of the member for O’Connor, but I assure the House that it is certainly capable of being solved. A smarter grid will not only help people save energy or use it more efficiently but also promote the adoption of all kinds of green technologies, including wind, solar and plug-in vehicles.

The global financial crisis has been used by climate change sceptics to try to spook the electorate into fearing action on addressing global warming. The truth is that the measures undertaken by the government through this bill and through the budget will create employment opportunities through climate change policy initiatives. The renewable energy amendment bill will deliver crucial reform to help tackle the long-term threat of climate change while also providing the springboard to create the jobs and industry of the future in a low-pollution economy. There is no doubt that climate change is a real problem. There is no running away from it, and we have to act to tackle it. I commend this bill and I commend the government’s renewable energy target.

There have been some interesting reports on this issue recently. Time does not permit me to go into them in detail, but I want to bring to the attention of the House and commend to it a report by Climate Works Australia, Low carbon growth plan for Australia. This was released in March, and its key findings were:

Australia can reduce its—

greenhouse gas emissions—

to 25% below 2000 levels … by 2020 the low-cost, using technologies available today.

Climate Works Australia’s

… low carbon growth plan identifies 54 separate opportunities - across all sectors—

ready to go—

that can be implemented over the next 10 years to achieve these emissions reductions.

It points out:

reducing—

greenhouse gas emissions—

can be profitable for business.

It goes on to say:

A combination of a carbon price and targeted action is required to achieve their full potential of low-cost emissions reductions.

It continues:

A portfolio of prompt action is required to implement the 54 opportunities—

taking into—

account … the risk of “locking-in” permissions for the long term and ease of emissions reductions.

It concludes:

Delaying action will mean some low-cost opportunities are lost, ensuring greater cost to society and—

greater cost to—

business in the long run.

I also commend to the House a report commissioned by the Australian Council of Trade Unions and the Australian Conservation Foundation from the National Institute of Economic and Industry Research, entitled Creating jobs—cutting pollution. It concludes:

Action to reduce pollution can go hand-in-hand with job creation and a prosperous and environmentally healthy Australia.

… Australia could create more than 770,000 extra jobs by 2030 by taking strong action now to reduce pollution.

The jobs identified are not just ‘green collar’ jobs, but new jobs in traditional industries such as agriculture, mining, manufacturing and the services sector.

The institute set out a scenario which they call the strong action scenario, putting a price on greenhouse pollution and proposing a targeted suite of complementary policies to reduce greenhouse emissions domestically without reliance on imported international permits. I do suggest to members that they look at the full report if they have the opportunity. I support this legislation and commend the bill to the House.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

The Renewable Energy (Electricity) Amendment Bill 2010 outlines the problems of small-scale technologies and their impact on the renewable energy certificate market. This is delaying investment in large-scale renewable energy projects. This bill sets out structural change to the renewable energy target—20 per cent by 2020—and separates large-scale generation from small-scale generation. Large-scale generation has a separate quarantined target, reaching 41 million renewable energy certificates, or 41,000 gigawatt hours, by 2020. Small-scale generation will provide an additional 4,000 gigawatt hours to reach the target of 45,000 gigawatt hours renewable energy by 2020.

In Kennedy, the north-west mineral province is the richest in the world, generating an income of around $12,000 million a year, albeit this figure was calculated during the boom in mineral prices. The area is home to an as yet untouched 500 million tonnes of iron ore reserves. Iron ore has never been sought in this area, but was simply stumbled upon when they were looking for the more lucrative metals. It is also home to two per cent of the world’s known uranium reserves, four of the world’s 24 phosphate deposits, three of which are completely untouched, the world’s biggest vanadium deposit, and one of the four biggest oil shale deposits in Australia. And of course it has some of the world’s biggest untouched proven reserves of copper, silver, lead and zinc. Dugald River, Mount Rose Bee and the Rocklands deposits outside of Cloncurry are but three significant areas.

This region has long been starved of power. It is only supplied by a single power station, powered by gas brought almost all the way from the New South Wales border. Gas is now at extremely high prices, having increased some 300 per cent in the last eight or nine years. Power demand is expected to outstrip supply by 2012. This is the world’s richest mineral deposit, bringing in $12,000 million—almost 10 per cent of this nation’s export earnings is coming in from this mineral province—and the year after next it will run out of power. There is not enough power left to keep the mines operating. You have to ask, what sort of government cannot provide electricity to process our metals?

You, Madam Deputy Speaker Moylan, are from the wonderful state of Western Australia—the biggest iron ore producing state in the world. You, of all people, know that the top one-third of our continent has all of the base metals—all of our copper, lead and zinc is coming out of that top third. Almost all of our gold production and all of our iron ore production is coming out of that top third. Where would you think you would base your baseload power stations? Where they are needed to keep these industries going, where power is needed at competitive world prices? No, there is not a single baseload power station within a thousand kilometres of the northern third of Australia. What sort of a crazy country has all of its water in the top third of the country and tries to do all of its farming in the bottom two-thirds? It takes a fascinating maladjustment in thinking to arrive at these conclusions.

Let us look at the problem. The problem is that nearly one-tenth of this nation’s entire export earnings comes from the north-west mineral province. Its potential has only been scratched—two per cent of the world’s uranium reserves, and they have never been touched. And the area is running out of power. We will have to choose which mines we are going to close down, because they have no electricity. They can get the electricity—they can put diesel generators in, at about $200 a megawatt hour when they need a competitive price of about $70 or $80 a megawatt hour. This is not from my document; it is the Queensland government’s document. Here are the graphs, and you can see clearly that in 2012 the north-west mineral province will not have enough power to keep it going and we just have a ramshackle power station—I commend the great men who man it and have kept it going even though a lot of the units are going on for 50 years old, and most certainly are over 40 years old.

The government recognised in its budget papers last year, and I assume there has been no change in their policy, that, after broadband, the connection to the national grid of the north-west mineral province, the iron ore province in Western Australia and Olympic Dam was a priority. We must pay Minister Ferguson a very great tribute for being able to bring such enlightenment to the federal government. That transmission line, in our case, needs to go from Townsville out to Mount Isa. Let me explain another problem. If you put chicken wire over your house, it most certainly will not keep it warm in winter or keep it cool in summer. It will make absolutely no difference. But let me tell you, Madam Deputy Speaker, that wire is actually more dense than the CO2 in the atmosphere.

I do not want to go on to the other arguments about photons and their directional ambience or any of those things. But clearly, if you think about it for 10 minutes, the proposition that 400 parts per million are going to warm up the earth is utterly ridiculous! And I am not a sceptic; I am an anti. Never has a scientist stood up anywhere in public and proved the scientific connection. In fact, we have out of the British people who are responsible for overseeing this the remarkable admission that it is very unfortunate that the Australian scientist died because he was the only one getting close to proving a scientific connection to global warming. Global warming may be taking place, but it has taken place many times in our geological history. It may be taking place, but to attribute it to this source is ridiculous!

Unlike many people in this place, I spend a lot of time doing research. One of the dozen or so leading world authorities is the Australian Institute of Marine Science, off Townsville, and Katharina Fabricius, an internationally renowned scientist there, says there is a situation which will arise in the oceans. And just the same as it is scientifically impossible to show any connection between global warming and under 400 parts per million in the atmosphere, there is also the same scientific evidence that will prove absolutely that a problem will arise eventually in the oceans if we keep increasing at the current increasing rate. So even an anti—not a sceptic, but an anti—like myself will say that the matter needs to be addressed. As we say where I come from: we need to take a bit of a pull on the reins here.

How do we go about this? Do we go about this by putting a price on a carbon pollution unit and then making Goldman Sachs rich—I understand they are currently being looked at with a view to prosecution in the United States. That is what has been reported in the media. It might be very unfair to them, but it is what has been reported. They are being looked at with a view to possible prosecution. But do we put a price on a carbon pollution unit to then make people rich in businesses like Macquarie Bank and Goldman Sachs and all of those people who trade in securities? There will be the creation of thousands of millions of dollars of securities that do not exist at the present moment. There will be a new commodity that they can trade and that will make them rich, and all of the stockbrokers—what I refer to as the slithering suits out of Sydney with all of their little sycophants in this place, and I see them on my visits to Sydney—will be rich people. They do not produce anything. They believe money should produce more money. They do not believe that money should be used to produce any tangible production, to quote a famous man called Roy Stankey from North Queensland.

What we need to do are simple things that result in a lowering of the carbon emissions, including switching to renewable energies. It has been a wonderful breakthrough for intellectual reality in this place that we do not talk much about carbon now, hardly at all, but we do talk about renewables. As a former Minister for Mines and Energy in a Queensland government, and as the minister who secured the national science prize for our solar energy standalone system in the Torres Strait—abandoned I might add by the following socialist government; they abandoned the project that had won the science prize for Australia—I was the person who had gone into the costs of this very deeply. I was not doing it to be some enlightened solar energy advocate; I was doing it because it was the most economically responsible action to be taken—that is, very simply to put solar panels in very isolated situations. They were more efficient than diesel generation. That is why I was doing it. Not because I was in love with the trees—no-one would ever accuse me of that—but because it was the economically responsible action to take.

I gave warning orders to my department—the government was nearing its end at the time—that if re-elected all government housing in Queensland would be moved to solar hot water systems. Forty per cent of your domestic power usage is in heating water. We would not be able to take away the whole 40 per cent; we most certainly would take away 20 per cent. There was no doubt about that. We were a very economically oriented government, we were a government of businessmen who had backed our judgment with our own money—to use the words of the very great former Premier of that state, Bjelke-Petersen—and who had put in place the aluminium industry of Australia, Australia’s second biggest industry, and the coalmining industry, Australia’s greatest industry. But to quote that man: these were men who would back their judgment with their own money. And if you have not done that, then you should not be making decisions with other people’s money if you have not backed your judgment with your own money.

So we were businessmen and we simply made a business decision. It was cheaper; it worked out cheaper for the homeowner. What he saved in electricity charges—in Queensland electricity charges have almost quadrupled since then—he made up for in increased rent. So as far as we were concerned there was no cost to government. And as far as any economist was concerned there was no increase in cost for the householder because the cost of the solar hot water system, which was put on his rent and amortised over 15 years, was offset by the savings in electricity. But if you do that you reduce by some three or four per cent the entire electricity consumption in this country, a very simple, obvious thing to do. We are assuming of course that a lot of private houses would go into it as well under a cheap government contractual arrangement.

Finally, we need to be cost competitive. I do not criticise the government for its initiative in proposing the resource rent tax; I most certainly criticise the government for the 40 per cent proposal and say that it simply cannot continue. Our industries have to be cost competitive. Those industries have to be attractive. The current government need not worry too much, because if they persist with it there is no doubt that they will not be the government of Australia. You only have to look at the North Queensland seats, which are highly marginal, and all mining seats—all of them, not just mine. Look at New South Wales, where so many of the marginal seats are in the burgeoning coal industry areas. If you think those employees are not going to be told, they will be told all right. And they will believe what they are being told, because it is simply logical to them that if the government is getting a huge amount of money then somebody has to be losing that money, and that somebody happens to be an industry in which nine out of 10 of its mines will collapse.

We must be cost competitive, and that brings me to the solutions. As I said, there are three great sources of income for this nation. There is the aluminium industry, which mostly is in North Queensland but is in other parts of Australia as well. There is the iron ore industry in Western Australia, and of course there is the giant coal industry. That is all we have going for us now. Mr Keating in his wisdom deregulated the wool industry, which was Australia’s biggest export earner—bigger than coal—in 1990 and destroyed it completely. There is only 40 per cent of it left now. It and the other rural industries are simply closing down. I have spoken about this on many occasions in this place.

If we look at the clean energy corridor, I must give the government great credit to date, but I must also say that we have had a lot of noise and a lot about what they are going to do. But ‘gonna-doers ain’t doers’, from my experience in life. So we do not want any more ‘gonna do’; we want some action here. I have seen the action with the rollout of broadband. For all of its criticisms, I stood there and watched the big backhoe go past, digging a hole and laying the cable which will enable the people of my home –the 30,000 who live in the Mount Isa-Cloncurry area—to go on to broadband at a speed which is commensurate with that anywhere in the world. That is a great breakthrough. They have had a rollout of the information highway. Now they need a rollout of clean energy—a highway of clean energy.

I table in the House the North Australia clean energy corridor proposal that the Tully sugar mill switch over to co-generation, reducing electricity use. When you take the sugar out of cane and boil off the water you are left with a cane fibre that can be burnt to produce electricity. Currently 60 per cent of it is burnt just to get rid of it. We could rearrange our mills, which is very expensive in the case of the Tully mill—$120 million—to produce electricity. God bless Robert Carey and his proposal for a new mill to be built to produce ethanol and electricity in Ingham, as well as all the other people involved. Combined, the three mills could produce 200 megawatts of electricity. Of Australia’s 40,000 megawatts of electricity demand, they will produce 200.

We move on to the proposed dam at Hells Gate, west of Townsville. It will produce 100 megawatts of hydroelectricity—albeit peak load, not baseload. It will bring that water down to west of Charters Towers to the Pentland solar biofuels project. Arcadia has already put in an application for the solar grants which we are discussing at the moment in the House. Arcadia is a big international trader in energy. The difficulty with solar power—and having won a science prize for Australia I speak with very great authority on this—is that the sun shines for only eight hours a day, effectively. How are you going to cover the other 16 hours of the day? Therein lies the problem. In the case of Pentland we have two giant sugar mills. We will bring this water down and open up a huge area—not huge in Australian terms but huge in the sense that two very big sugar mills will come out of it. Solar power will fuel the boilers during the day; during the night they will burn the gas from the sugar mill to fuel the boilers during the evening. That will produce 450 megawatts of electricity. If you like hydro at 30, 40 or 50 megawatts of baseload, we are now up to 500, 600 or 700 megawatts of baseload power, which is almost the entire northern grid—five per cent of Australia—now on renewable energy. What a great achievement for this government, for this nation and for this generation. It will be there for a hundred years.

Let me just slow down. The Pentland solar biofuels project, coupled with these other projects, will produce some 700 megawatts of baseload power that will be there forever. That river will flow; the water will flow through the generators. And if you are worried about the 12 or 13 million megalitres in that river, we want only one million megalitres of it, so 90 per cent of it will still be flowing down to the ocean. Coupled with the phytofuels proposal, which will get rid of our dirty, filthy, prickly trees and the wind generator—(Time expired)

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in support of the Renewable Energy (Electricity) Amendment Bill 2010 and related legislation. It is interesting to note that electricity consumption in Australia accounts for more than one-third of national emissions. At the same time, Australia has a wealth of renewable resources—some of the world’s best wind resources, higher average solar radiation per square metre than any other continent and huge potential in geothermal and wave technologies. The development and harnessing of renewable energy is a crucial part of our nation’s low-carbon future and has also been a crucial part of the work of the Rudd government. But to best harness these resources we do need a workable policy framework, which we find in the legislation before the House today.

The purpose of this bill is to separate the Renewable Energy Target Scheme into two parts. I guess we can call them big RET and little RET, but they are the large-scale renewable energy target, LRET, and the Small-scale Renewable Energy Scheme, SRES. By differentiating between the schemes, we can ensure greater certainty for large-scale renewable energy projects and the installers of small-scale renewable energy systems such as solar panels and solar hot water heaters. This package is just one of a suite of Rudd government policy initiatives that encourages a switch to clean energy. It will further strengthen our commitment that the equivalent of at least 20 per cent of our nation’s electricity will come from renewable sources by the year 2020.

The two parts of the scheme will work as follows. The LRET will encourage the deployment of large-scale power generation using energy sources such as wind, solar, biomass and geothermal. The LRET annual target will be set at four million renewable energy certificates per year less than the current targets to take into account the estimate of the deployment of small-scale technologies, reaching 41 million renewable energy certificates by 2020. Existing banked renewable energy certificates will only be eligible, though, for use in the LRET, the large-scale projects. It is good to see that we have now given some certainty around those targets and for the larger-scale projects. We know that the public have had an amazing interest in taking up renewable opportunities in their homes, but we are now being more strategic about encouraging large-scale opportunities for industry.

The small-scale target, SRER, will continue providing support to households, businesses and community groups who install renewable energy systems like rooftop solar panels and hot water systems, through the creation of a new small-scale technology certificate. There will be no overall limit on the creation of those certificates and the price will be fixed at $40 through the creation of an optional clearing house. This would mean a household installing an average sized 1½-kilowatt system, and receiving the solar credits multiplier, would receive certificates worth around $6,000.

To reach these targets, we need to see support from both ends of the scale—individual households and large energy users and providers. In particular, the degree to which the 20 per cent target is reached is dependent on the uptake of small-scale systems by households, small business and community groups, but large-scale take-up can make a big difference. In a promising sign, already this scheme is gaining popular support from the energy sector. Only days after its announcement, AGL announced that it had entered into conditional arrangements for the construction of the 365-megawatt capacity Macarthur wind farm in south-west Victoria. In fact, according to AGL, it is estimated that the enlarged renewable energy target under the Rudd government has already seen an eightfold increase in plans to build green generation in Australia—predominantly at this stage in wind power.

Speaking at a recent utilities conference, AGL’s group general manager for merchant energy, Jeff Dimery, said that the small-scale RET program implemented under the Howard government was estimated to lead to just 1,200 megawatts of new renewable generation being developed this decade—but now, with the expanded RET, AGL expects at least 9,500 megawatts of renewable generation to be constructed by 2020, along with a $30 billion investment in new power production. That is good news. Similar improvements are forecast in the outlook for gas generation. This is a direct result of these policies, and I congratulate the Minister for Climate Change, Energy Efficiency and Water, Senator Wong, on the success of these incentives.

As Mr Dimery points out, if we are to see these forecasts become a reality, the government must win safe passage of these RET legislation amendments through the Senate. We need to see action in passing this legislation through the Senate now. Industry certainty, industry benefit, is the outcome that is at risk. These sentiments are shared by many in the renewable energy sector who feel that investment will remain frozen until these amendments are passed. According to Pacific Hydro manager of government affairs, Andrew Richards, it is ‘mission critical’ for the renewable energy sector to see this legislation passed. Similarly, AGL chief executive, Michael Fraser, has warned that the failure to pass this legislation before our next federal election would result in a ‘loss of investment, loss of jobs and a stalling of investor confidence’. This is something we cannot afford. Already, Australia is at risk of falling behind the rest of the world in investment in renewable energy. A study by Bloomberg New Energy Finance projected that global investment in renewable energy would reach a new record of US$154 billion in 2010, up more than a quarter on last year. Australia also recorded a record investment of US$1.02 billion, but this represents only 0.8 per cent of the total global investment, even though our share of the GDP is 1.3 per cent and our share of global greenhouse gas emissions is 1.5 per cent.

It is a promising sign to see companies like AGL forecasting some positive figures and positive take-up by the energy sector around our policies and this legislation. When we compare the uptake of resources like wind power in Australia with other countries we can see that there is still a lot more to be done. Denmark, for example, with almost 5½ million residents squashed into an area roughly the size of the Hunter Valley, where I come from, is aiming for 50 per cent of its overall power output to come from wind farms by 2020. That is an amazing statistic to contemplate. Environmental conditions there are very different, but it is good to see such positive projections. Worldwide, new wind installations continue to grow at 30 per cent per year globally. From 2013, it is anticipated the world will install more than the entire Australian annual electricity demand just in wind power. I note, too, that in Spain we are seeing a greater take-up of solar resources. I had the great pleasure of visiting a solar plant in Nevada. It was only a small plant by megawatts, but I note that in Spain the same company and others are delivering much larger generation plants of up to 150 megawatts. That is good to see as well, particularly as where I come from we are doing some groundbreaking research in solar thermal power.

While 100 per cent renewable energy output in Australia may not be possible by 2020, we can still be influenced by, and take encouragement from, the efforts of other countries in showing what can be done to increase renewable energy output. We have been told by scientists and experts that clean efficient energy systems will underpin our economic success and prosperity in the future and drive our climate change response today. This is no truer than in my electorate of Newcastle and in the surrounding Hunter region. Last week a report released by the National Institute of Economic and Industry Research found that switching to an ecofriendly economy in the Hunter region would create more than 60,000 jobs. That is a significant contribution to regional employment. It may seem a very high goal at the moment, but I am pleased to say that the Hunter region, and the Newcastle electorate, is well on its way to becoming an ecofriendly economy.

In the last 18 months alone, we have seen a staggering investment in clean energy from the Rudd Labor government. At the beginning of last year, the Australian government launched the Australian Solar Institute, headquartered in Newcastle, delivering on its $100 million commitment to solar research. The Australian Solar Institute will support solar thermal and solar photovoltaic research and development, foster the necessary collaboration between solar researchers in university research institutions and industry and help forge strong links with peak overseas solar research organisations. Last year we also saw the launch of the $20 million national Clean Energy Innovation Centre in Newcastle, which assists small and medium sized businesses in becoming more energy efficient.

I must acknowledge the outgoing director, Dr Gillian Sparkes, whom I have had the great pleasure to work with over the last year. I wish her well in her new appointment to the Victorian government climate change department. I know that her work in these initial stages, since the innovation centre’s formation, has been of great benefit and will continue to benefit us for a long time to come.

More good news came for clean energy research in Newcastle in November 2009 with the opening of the new CSIRO research centre, the Renewable Energy Integration Facility, which has been established to develop new grid management technologies. Success in that area will allow greater penetration of renewables and low-emission energy resources into the major electricity networks. Setting up grids of renewable energy sources is one thing, but integrating them into a major grid is quite challenging. Such measures will also contribute to a reduction in the levels of carbon emissions in the future.

Of most excitement for Newcastle is a bid by a Newcastle based consortium for the Smart Grid, Smart City initiative. The Newcastle consortium, led by Energy Australia in partnership with AGL and includes IBM, Cisco, the National Broadband Network Company, the CSIRO Energy Transformed Flagship Program, Ampcontrol, the University of Newcastle, Newcastle City Council, Together Today Cooperative and Hunter Water, has submitted an outstanding bid for this initiative. Smart grids have the potential to transform the way we use energy in our homes and businesses and to make our existing energy use much more efficient and reliable. The Smart Grid, Smart City initiative will use a mix of innovative technologies to monitor electricity supply, manage peak demand and help both large-scale and small-scale customers make informed choices about their energy use.

By supporting the installation of Australia’s first commercial scale smart grid, this initiative by the Rudd government will combine advanced communication, sensing and metering infrastructure with existing energy networks to allow combinations of applications that can deliver a more efficient, robust and consumer friendly electricity network. I think we all look forward to the day when we will have more control over how we actually use energy and how we maximise its efficiency—and the same applies to water.

Smart grids have the potential to transform energy efficiency all around this country and the world. Smart grids identify and resolve faults automatically on the electricity grid. They can automatically self-heal, manage voltage and identify infrastructure that requires maintenance. Smart grids can also help consumers to manage their individual electricity consumption and enable the use of energy efficient smart appliances that can be programmed to run on off-peak power. If successful, this would see the beginning of a technological approach that will reduce emissions, reduce energy consumption and drive down costs. I have advocated very strongly for this bid from the Newcastle consortium and I again express my confidence in its quality. I look forward to any success they may gain.

From the power plant to the power point the Rudd government is supporting action—both large scale and small—to reduce carbon pollution. The enhanced Renewable Energy (Electricity) Amendment Bill will help the fight against climate change, allow Australia to harness its vast renewable energy resources, and drive the deployment of renewable energy technologies, industries and jobs. More broadly, Rudd government initiatives, such as the $652.5 million announced in the budget for the Renewable Energy Future Fund, will further support Australia’s response to climate change. The fund will provide additional support for the development and deployment of large- and small-scale renewable energy projects and enhance the take-up of industrial, commercial and residential energy efficiency. Along with the other initiatives already mentioned, the Rudd government is supplying Australians with the tools to do their own bit to conserve energy and promote renewable energy sources, at the same time creating new clean industries and a flow-on in employment. We recognise how vitally important it is to build the foundations now that will enable our energy sector to take full advantage of the opportunities that will present themselves in an ecofriendly, carbon constrained world.

I cannot leave this debate without making some mention of the 18-month deferment of the ETS by this government. I can only say that our government is firm in its position that it remains critical to the future success of this nation to have an ETS in place. I have to register my deep regret that a bipartisan approach was never achieved. We thought we were close.

When you take an issue of such international significance, national significance and importance to the people of Australia and to the future generations of this country, you have to realise that it is bipartisanship that assists these types of policies over the line. I think all people of this country have looked for that bipartisan support and I think industry has looked for that as well. We were so close but now the time has passed. When the new Leader of the Opposition was elected it prejudiced, terribly, the bipartisan approach had appeared possible for an emissions trading scheme in this country. In making those statements I hope that bipartisanship will result and will be offered around this legislation. The Renewable Energy (Electricity) Amendment Bill 2010 and related bills are deserving of the support of everybody in this parliament. I commend the bills to the House.

Peter Lindsay (Herbert, Liberal Party) Share this | Link to this | Hansard source

We have the government wanting to impose a great big new tax on the mining industry and drive it out of the country and we have the member for Newcastle bringing back the ETS, which will do a similar thing. Now we have two great big new taxes, which the current government wants to impose on the Australian community, driving a dagger into the heart of the sector that most supports the Australian economy. It is extraordinary.

However, there is some positive news, which I hope the government will take note of, in relation to the Renewable Energy (Electricity) Amendment Bill 2010 and related bills before the House. Today Townsville Enterprise and MITEZ, the Mount Isa to Townsville Economic Zone, have issued a media release announcing the solution to the north-west’s energy needs. It is a renewable energy solution, which is called for in the bill we are discussing before the parliament today. It is truly a magic solution to what is needed to support both the government’s and the opposition’s quest to have a 20 per cent renewable source of energy by 2020. North Queensland leads the way again, Mr Deputy Speaker Scott, and we have the solution. Of course it does not come without the need for a few dollars and I will go into that in due course.

The bills we are debating today create Australia’s newest renewable energy commitment. It will be in two segments: the large-scale renewable energy and the small-scale renewable energy schemes. The large-scale target is obviously for accredited power stations including wind, solar, biomass and hydro. The small-scale scheme will provide small-scale technology certificates for the installation of solar panels, solar hot water systems, wind turbines, small hydro systems, heat pumps et cetera. The certificates generated will continue to be managed by the Office of the Renewable Energy Regulator. Of course the bills contain penalties for bodies who do not meet the requirements of this legislation.

I want to tell the House about the coalition’s achievements on renewable energy. The former government, of which I was a member, introduced Australia’s first MRET, mandatory renewable energy target. At the 2007 election the coalition affirmed our commitment to what is in the bill today, a renewable energy target of 20 per cent. Our credibility is there for everyone to see. The Rudd government on the other hand not surprisingly have broken a number of promises in this area and have created great uncertainty within the industry. I think so far the Rudd government have broken 47 of their promises. It is an extraordinary track record. Of course it does not surprise us that there are broken promises in the renewable energy area as well.

We had an $8,000 solar rebate, which was an excellent initiative and very popular. Yet in the 2008 budget the Labor government decided to means test it. That was just the first of a number of broken promises in this area by the government. In June 2009 the Rudd government scrapped the rebate entirely without giving the industry or Australian households any notice. And we have seen that happen again in the Home Insulation Program where the program was scrapped without any notice, and businesses have been going out the door backwards and failing because the government was unable to manage that program effectively. In June 2009, Labor also scrapped without notice the coalition’s successful Remote Renewable Power Generation Program. This program had worked to help provide solar or wind power units to Australian families and businesses not connected to the power grid. It was such a shame to see that taken away from those people who needed the support of that program.

The uncertainty for the energy sector was compounded in the Rudd government’s approach to renewable energy legislation in 2009. When the government presented this legislation in 2009, you will remember it demanded it only be considered with the Carbon Pollution Reduction Scheme legislation. It was coupled to that bill. The coalition reasonably and sensibly proposed that the two different legislative packages should be separated. The government stood its ground and, of course, after more backflips eventually realised it could not hold the passage of the renewable energy legislation hostage to the fate of its CPRS. It adopted the coalition’s amendments to decouple the legislation—and well done in the Senate. I guess that is an indication of the effectiveness of the Australian Senate.

The renewable energy package was presented to parliament in 2009. The coalition successfully made a number of amendments to the legislation. As well as decoupling the legislation, the coalition sought an exemption for the aluminium industry. There is now a 90 per cent exemption for new renewable energy targets in this sector. The government also accepted our proposal—sensibly—to ensure that heat pumps installed in homes are included in the renewable energy target at the current allocation rate.

What is the coalition’s position? This legislation is currently before the Senate Economics Committee, which is due to report by June 2010. The coalition still have a number of concerns about the legislation. It is important to get renewable energy legislation right. The government should wait to hear the recommendations of the Senate inquiry and listen to the concerns of the energy industry.

I would like to take you back to the good news I alluded to at the beginning of this contribution—the blueprint for future development of the North West Queensland Mineral Province based on the Mount Isa to Townsville  Economic Zone. There has been terrific work done by MITEZ and TEL. This blueprint has all of the facts on which the recommendations are based, from which the government can clearly take heart that what is being proposed is in fact what will happen if these recommendations are accepted. Analysis by BIS Shrapnel estimates that the North West Queensland Mineral Province could provide scope for 900 megawatts of renewable energy projects by 2015-16. According to the same report, the entire clean energy corridor in North Queensland could end up providing 3,750 gigawatts of clean energy per year, which would be eight per cent of the government’s renewable energy target as proposed in the legislation before us. But more than that, by 2020 this could even rise to 20 per cent. The entire renewable energy target proposed in this legislation could be supplied by the North West Queensland Mineral Province energy corridor between Townsville and Mount Isa. What a great opportunity for Australia. What a great opportunity for North Queensland.

The north-west has significant geothermal sources out near Mount Isa. It has some of the best solar radiation sources in Australia. It has biomass which can produce electricity and it has very significant wind in western Queensland. However, we need a 275 kilovolt transmission line to connect Townsville to Cloncurry. In that way, power could be fed into the grid and into the National Electricity Market from all along that corridor. Also, power could be taken off that transmission line to supply energy to the various major mining projects along the way, and there are many of them. It is a no-brainer. The state government particularly needs to invest in a transmission line so that this whole concept can become a reality and what a magnificent reality it would be.

The projects I am talking about would generate 1,200 new jobs and deliver $190 million in direct and indirect output by 2015-16. By 2019-20 the output would be around $450 million. Creating these renewable energy projects would go a long way to meeting the energy demands of North Queensland, a rapidly growing area. These projects could make a direct contribution to achieving the 20 per cent renewable energy target. One of the most important projects for renewal energy investment is the construction of a 275 kilovolt AC transmission line.

The chief economic development bodies in the north-west—Townsville Enterprise and the Mount Isa to Townsville Economic Zone—along with all regional councils and the Queensland Resources Council rate these projects as a top priority for investment to ensure the region continues to prosper and contribute its full potential to the Australian economy. In that sense, I have arranged meetings with Townsville Enterprise and MITEZ here in Canberra next Monday to allow the groups to make a presentation to the government and to the opposition—the alternative government. I thank the ministers and shadow ministers who have allocated time to make sure they hear about this magnificent project. A letter from Richard Mackie, General Manager Australia-South Africa Windlab Systems, sent to the Mount Isa to Townsville Economic Zone Inc. states:

Windlab Systems has identified an area with very good potential for wind farming north of Hughenden in the Townsville to Mt Isa corridor … in the long term, benefits to the region could be even greater as there is likely to be enough area with a good wind resource to host well in excess of 600MW.

That is an enormous amount of power. It continues:

Construction of an AC electrical connection between Townsville and Mt Isa is however essential to realising the economic benefits of the proposed windfarm. The current closest connection point at almost approximately 250 kms from the project site is prohibitive to the project.

That is why we need the new transmission line to go across the north. We also have a letter from Marshall Mackay, CEO of Australian PhytoFuel to MITEZ:

We are aware of a number of other renewable energy projects that have the potential to operate along a corridor if the AC Link is implemented. Individually, these projects, including PhytoFuel, will add marginally to the energy needs of the region in combination they have the potential to supply a significant proportion of the areas to energy requirement. In the absence of the AC Link none of this potential will be realised.

So the clear message to the government, to the alternative government and to the state government is that this corridor can produce 20 per cent of renewable energy required under the legislation we are debating here today, but to do so it needs a transition line to be built from Townsville to Mount Isa.

In a press release dated today headed ‘The north offers the government renewable energy option’, Townville Enterprise make it very clear that there is a compelling case for the installation of an AC transmission line between Townsville and Mount Isa. That is why they have that particular project as their top priority in the development of the north. The North West Queensland Mineral Province could become a world leader in renewable energy generation if we take up this green option to increase the supply of power between Townsville and Mount Isa. This is vital. The government must listen to what the north is saying and I certainly commend this project to my colleagues on both sides of the House. I hope that we will see this in the not-too-distant future so that we can produce all of this green energy and satisfy the renewable energy target that the parliament will likely pass later today.

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

I am proud to speak on the Renewable Energy (Electricity) (Charge) Amendment Bill 2010, Renewable Energy (Electricity) (Charge) Amendment Bill 2010 and Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Bill 2010 as I for one believe in the development and the commercialising of our renewable energy industry. Apart from being able to generate jobs as we develop those technologies, this will play a vital role in fulfilling the clean energy requirements of this country well into the future. As you are aware, these bills seek to augment Australia’s commitment to 20 per cent renewable energy by the year 2020. Probably unlike many in the House, prior to coming here I had the very distinct honour of doing a lot of work in the renewable energy sector for a number of years and I know how difficult it is to commercialise technology. By the way, that is one of the reasons I spoke so loudly and so often when it came to the CPRS and developing an energy trading system in this country, which everyone to a person on that side of the House opposed. The purpose was to create the environment in which to commercialise renewable energy technology as the way forward for this country.

It is true that we are one of the largest coal-producing countries in the world and it is a fact that we are the world’s largest exporter of coal. If you look at the figures, we have something like 350 years of black coal and about 800 years of brown coal. Clearly, that is going to form a significant part of our economy into the future. That is one of the reasons why this country is one of the leaders in clean coal technology. If we are going to be producing and relying on and exporting coal, we will be out there producing clean coal technology. That is only commonsense.

The second aspect of these bills coming into play now is that, by making a commitment by the year 2020, we will move to 20 per cent of renewable energy in our suite of energy mix for this country. That is important because, if you are a company that is running coal fired power stations and selling power on the grids through those mechanisms and you know that by 2020 this is the commitment that you need to measure, one thing you will need to do is take an interest in the development of those renewable energy technologies so that you can augment your power production by funding these renewable energy streams.

It does not matter if we are talking large scale in terms of biomass, wind power generation, large-scale solar and geothermal, that is essentially where the target areas have been to date. Obviously we have made great inroads. People out there want to participate, to do something about the environment, and we see the take-up of solar panels as well as solar hot water pumps and solar hot water systems. People are playing their part. What we have attempted to do through this suite of bills is to make the distinction between those large-scale projects in looking at the RET, the renewable energy target, together with looking at those small domestic contributions that are made through solar panels and solar water heaters.

Just before I came here, as I was coming back from lunch, oddly enough I happened to meet with Mr Gerry McGowan and Mr Mark Fogarty of CBD Energy and a number of people from the Bank of China. The reason that is relevant—not to say that I just met with them—is that they are talking with financiers at the moment about commercialising a wind project in Gundagai. They are talking about financing through the Bank of China the development of a large-scale wind project in Gundagai, which is going to generate significant renewable energy and will only be aided and commercialised if we go ahead with these renewable energy targets. Another very interesting thing is the deployment of new technology through the use of more suitable turbines. As I understand it, the technical advice has been provided by Tianwei Wind. It is being looked at to commercialise this in a way that makes it not only more efficient energy generation but also viable through the size of the power plant and its reliability in selling directly back into the gird itself.

That meeting was just a chance meeting. Walking through the corridors today are people committed to going down that path, people who are committed to looking at commercialising our renewable energy technology. It is why this government stood on that basis and it is why we pressed so heavily for an energy trading system when we had the opportunity to do so which was regrettably rejected on three occasions by those on the other side of the House. This bill will make vast improvements to the renewable energy resources. It will drive the development and the deployment of renewable energy technologies to indices and create jobs.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2.00 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member for Werriwa will have leave to continue speaking when the debate is resumed.