Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

The Renewable Energy (Electricity) Amendment Bill 2010 and cognate bills enshrine in legislation the changes to the Renewable Energy Target Scheme that will take effect from January 2011. This is landmark legislation. This very important legislation recognises the importance of Australia reducing its carbon footprint. This legislation will also make the Renewable Energy Target Scheme work a lot better. The legislation will divide the existing scheme into two parts: the Small-Scale Renewable Energy Scheme, the SRES, and the Large-Scale Renewable Energy Target, the LRET.

Mr Speaker, it is a pleasure to be making this speech while you are in the chair. I do make quite a few speeches in the other House. The new LRET and the SRES combined are expected to deliver more renewable energy than the existing 45,000-gigawatt-hour target in 2020. The degree to which this 20 per cent target is exceeded will depend on the uptake of the small-scale technologies by households, small businesses and community groups. Within the Shortland electorate there has been great enthusiasm from these groups in their desire to take up energy efficient technologies and renewable energy.

The people of the Shortland electorate are really keen to link into this scheme. At a meeting recently in my electorate a number of people were discussing solar panels. They were saying they were thinking of installing them on their houses. They could see this would not only benefit our environment but also lead to them having to pay less for their electricity. It is a win-win situation. The LRET portion of the target will be increased to ensure the 20 per cent by 2020 target is still met if the uptake of small-scale technologies is lower than anticipated. But, as I have already stated, I think it may end up being higher than anticipated, particularly in my area.

Under the existing Solar Credits initiative, the new fixed price of $40 per REC will see an average house in Shortland that installs a 1.5 kilowatt solar panel system in 2011 benefit from an upfront subsidy of $6,200 through the RECs. That is quite an incentive. There is also the added bonus of receiving cheaper electricity. The number of systems receiving support under the SRES will be uncapped to ensure small-scale installers have certainty. A problem with the previous scheme was that it was capped. There was no certainty and that did cause a problem for some people.

The purpose of the Renewable Energy (Electricity) Amendment Bill 2010 is, as I have already stated, to separate the Large-Scale Renewable Energy Target and the Small-Scale Renewable Energy Scheme. The changes will provide greater certainty for large-scale renewable energy projects and installers of small-scale renewable energy systems. The enhanced scheme will further strengthen the government’s commitment that the equivalent of at least 20 per cent of Australia’s electricity will come from renewable sources by 2020. As I have already stated, I think it will be greater than 20 per cent. That is testimony of the government’s commitment to bring about change. It is committed to renewable energy and lowering our carbon footprint. This scheme will benefit all Australians. We need to protect and look after our environment and this is one way of ensuring that that happens.

I would quickly like to touch on some of the initiatives that have been taken locally in the region I come from. The CSIRO Energy Centre in Newcastle has set a new benchmark in ecologically sustainable design by showcasing energy generation initiatives, building demand reduction and supply options. It is a focal point in Australia for energy research in the fields of sustainable energy, environmental impacts, and cost-competitive and environmentally-acceptable fossil fuel research. It has undertaken a lot of research. The work it has done has been groundbreaking. The government has supported the Energy Centre’s work.

In addition to that, in the Shortland electorate Delta Electricity has two power stations: one at Mannering Park and one at Lake Munmorah. The Lake Munmorah power station is very outdated and needs to be upgraded. A project is taking place to introduce gas-fired facilities, which will be used in times of high demand. The old technology will be replaced with new technology. Delta is working towards improving its impact on the environment.

Delta Electricity is an electricity supplier that is mindful of the need to look at lower emissions and a sustainable future for generating electricity. It is looking at diversifying its electricity portfolio and is reflecting community and government expectations in changing its technology and working with the community and governments to lower emissions. It is looking at sustainable energy generation, at minimising the impact of existing coal fired plants and investing in the latest technologies and working with governments. It is investing in low-emission, renewable energy generation and developing new low-emissions energy technologies such as carbon capture. So Delta have indicated to me on a number of occasions that they are very mindful of the need to change. They are very mindful of the desire of governments to lower carbon emissions and, as such, they are introducing technologies to address this need. They meet with the state member and me on a regular basis to keep us informed of the changes that are taking place within their organisation, both locally and throughout the state. The member for Swansea and I both encourage Delta Electricity to continue to look at cutting-edge technologies and new ways of generating energy.

Slipping back to the renewable energy targets issue, that is part of a suite of government policies to encourage people to switch to cleaner energy to complement the renewable energy target. The government is making significant investment in the generation of renewables through the $4.5 billion Clean Energy Initiative. The initiative includes: the $1.5 Solar Flagships program to support the construction of large-scale grid-connected solar power stations operating in the market; the Australian Solar Institute, which will help to retain 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 RET will add less than $4 per year to the average household electricity bill.

I remind members and those people who are listening to this debate that people can now elect to receive 100 per cent, or a lower percentage, of their electricity from renewable sources by discussing this with their provider of electricity. That is something that I do. I have elected to receive part of my electricity from a renewable source and I would encourage other members to do so. A discussion paper was published in March 2010 which looks at enhancing the renewable energy targets. It examines all the issues that are in this legislation and, again, I would suggest that people have a look at that discussion paper. The submissions closed in April and we do have the legislation before the parliament at the moment. There is a lot of information out there for people to read to enable them to understand the reasoning behind this legislation. I would encourage smaller consumers and community groups to utilise the benefits of this legislation through the SRES when it comes into force. It makes a considerable contribution towards the cost of installing solar panels. I would encourage schools to use the scheme that is available for them to have solar panels installed and I would encourage businesses to look at the initiatives that are available for them to transfer to and use the rebate schemes that are available.

The one available for schools is the National Solar School Program. It offers schools $50,000 in solar power grants and up to $100,000 if it is a dual campus school. They are a couple of examples of the types of initiatives out there. I would encourage all Australians to embrace the spirit of this legislation. I urge larger companies and organisations to use the LRET, and community groups, individuals and schools to link into the SRES. I commend the legislation to the House.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I know that the Renewable Energy (Electricity) Amendment Bill 2010, the Renewable Energy (Electricity) (Charge) Amendment Bill 2010 and the Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Bill 2010 are going to proceed through the parliament with the support of both sides of parliament, but there are a number of issues that really do need to be considered in a clearer light, and I know that the member for Lyne will be raising some of those concerns in his speech. There is concern in the community that the small people may well be brushed over in relation to issues such as the feed-in tariff arrangements that have been put in place in some of the states.

Here again we see probably the hallmark of the last decade of this parliament—and other parliaments—in relation to renewable energy policy generally. It has sent so many mixed messages to consumers that consumers really do not know what the policy is. They get the buzzwords and hear about the percentages of renewable energy. They feel good about that. They look at the fine print of the policy and they become confused. They see changes in the policy, as we have recently seen in the insulation arrangements. They see variations between policy direction at the state level and the federal level. They see competition going on between some of the various energy providers, not necessarily on price but to make it look as though various business entities are more in line with a sustainable and renewable future. They see the changes in relation to Green Loans, for instance. They see a myriad of changes. The most recent change is that the government has removed itself from the building in terms of its emissions trading scheme. People quite understandably are confused. A lot of people are quite happy that the government has changed its policies, but a lot of other people are very confused as to what these messages are.

These bills before the House were actually designed to plug into a broader scheme, the Carbon Pollution Reduction Scheme. Now that is not happening, and we still have these bills. On the surface, they are feelgood bills. The words sound appropriate. The words from John Howard a decade ago, in 2001, when he put in place renewable energy targets, were appropriate at the time. The people in voter land listened and received the message that the government was serious about renewable energy and had put in place targets. But the putting in place of a target does not necessarily deliver anything. Many, particularly those in the coalition, would or should remember that the renewable energy target for biofuels back in 2001 was 360,000 megalitres. There is less biofuel in Australia now than before the Howard government put the target in. There is nowhere near 360,000 megalitres. So we had this feelgood announcement and a number of initiatives and grants—some of which were rorted and some of which were politically motivated in terms of where they went in the various electorates—rolled out through those coalition years. Nothing happened. Absolutely nothing happened in terms of promoting renewable energy, in that case biofuels, either biofuels as a value-add to an existing process or first or second generation biofuels that could have assisted agriculture.

Then along comes climate change, a great concern. ‘What can we do to maintain sustainability at a range of levels? What about renewable energy? That might help. Let’s develop a policy that makes it look as though we’re actually doing something about renewable energy.’ The member for Braddon, a man that I have many disagreements with in this House—

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

A fine member!

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I notice his close colleague the member for Moreton is in the building. He may well report to the member for Braddon that he has been verballed in the parliament. But the member for Braddon made one of his better speeches yesterday, I thought.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

That was easy!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

A low base!

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

Yes, it was not difficult to have one of his better speeches delivered. I am sure he is listening. He made the point that, irrespective of who has been in government, this parliament has not delivered any certainty in any fashion in the signals that consumers receive. In the recent budget, the government announced something like $600 million for a Renewable Energy Future Fund. The coalition is going to remove that fund.

On the surface of it, we might say that it is a great idea to have a Renewable Energy Future Fund to put in some money to encourage industries to start up et cetera, because there is concern about where we are going in relation to solar, wind, geothermal, biofuels and so on. But in the same budget there is a tax on biofuels, a renewable energy. I think it starts to ratchet up in 2012, although I may be corrected on that. So what is the message? Why are we starting up a Renewable Energy Future Fund to encourage renewable energy and then, a couple of pages further on in the document, actually imposing a fossil fuel tax on a renewable fuel? It is no wonder that people are getting confused.

It is becoming a bit like the superannuation debate, where originally it was a good idea for people to save for their retirement, then someone said, ‘There’s a lot of money in there; we could get some tax,’ and then the government said ‘Okay, let’s tax it.’ So we taxed it twice and then we taxed it three times. I think it is back to twice now. But the message the consumers took was: ‘Why are we saving for our retirement if we are only saving to have the money taken away before we retire?’ Anybody that has been looking at the various superannuation funds in recent years, particularly through the financial collapse, would have to ask the question: ‘What have we been doing? What is the policy message in all of this?’

Now we have the new resource rent tax. I do not disagree with a resource rent tax. I think it is a much fairer way of receiving a share of our resources than a royalty, which takes money before any profit is made. I have some issues with the entry point. I think the long-term bond rate is too low. The government should have a very close look at that, even if it means that the total revenue stream drops off. There are some very real issues with having an entry point at the long-term bond rate. I am encouraged that there are discussions taking place on that issue. I would encourage the various industries themselves, the miners, to take up the challenge that the Prime Minister and the Treasurer have issued that they are serious about negotiations and consultations with various industries. I think dealing with the Minerals Council is dealing just with politics. I think we really need to get down to the nub of this—what it actually means for real businesses in different structural circumstances, in different company structures and at different levels of development. We need to see what this, in a sense, blanket tax actually means to those various companies. So I encourage the companies. There was an issue raised yesterday—I think it was from Queensland—concerning an aglime mine. Those people sent me an email as well. In reading their email—

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Mr Perrett interjecting

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

The member for Moreton might like to talk about this in his delivery, because he probably knows more about it than I do. It seems to me that the government should have a very close look at their circumstances, because they are dealing not only with a product that they have dug up out of the ground and sent overseas with no value adding taking place but with a product that goes into a lot of domestic businesses, including agriculture, soil conditioning and a whole range of other things.

If we are serious about sustainability, we have to make sure that some of these policies are sending the right signal. Here again, on the margin of the resource rent taxation issue, we see an area where that signal could become very blurred and it actually impacts on things that other aspects of policy are trying to encourage. So I suggest that the miners themselves take up the option of the Treasurer and the Prime Minister and get into those one-on-one discussions about how the tax is going to impact on their company structures and the long-term profitability of their companies.

As I said, I think the member for Braddon made a very important point yesterday. I would agree with him that, for the last decade, we have talked about renewable energy and done very little. We have these confused messages out there—and the member for Lyne will talk about some of those—with the various state and Commonwealth arrangements. This is a Commonwealth arrangement. Essentially it was to have been piggybacked on to the Carbon Pollution Reduction Scheme; nonetheless, it is here now. Again there are some blurred areas, including what it is going to mean for consumers, households and, particularly, the smaller end of the market where the real field for renewable energy is.

People want to be involved in doing things better. They want to be encouraged, but they want policy that does not penalise them when they get there. The Leader of the National Party made a very significant point the other day on the issue of natural gas, I think it was. The issue is similar to the ethanol issue that I just raised. Why did we encourage people to go into LPG cars et cetera and then penalise them when they did? Why do we do this? What was the point of doing it in the first place if not to trap them? I am not suggesting that liquid petroleum gas is a renewable fuel, but it is a better fuel in terms of emissions et cetera than some of the other fossil fuels that we have been using.

We constantly get these mixed messages. There are some good things happening in Australia. I do not think these things are being encouraged enough. The member for Moreton may well talk about some of the things that are happening. I know the member for Dawson raises the issue of cogeneration in sugar mills. The only reason we have a sugar industry now is renewable energy. The Brazilians removed themselves from the world market, in a sense, for sugar as a food product. They then moved back into producing energy from that food product, the sugar—producing bagasse and other things from the residues and then producing renewable energy at source. That is starting to happen along the Queensland coast and we should be encouraging that. We should be really encouraging those sorts of activities. Not only do they add value to an agricultural pursuit but they are renewable energy sources. You open up the areas where that particular primary industry exists. I do not have any sugar cane in my electorate, but I think it is an important area that we should be looking at—food production, renewable energy production and electricity production as well as molasses and other activities. It becomes a much more important and significant industry than that of just growing a plant and shipping the sugar as food to someone else overseas.

The member for Parkes would know the small town of Ashford in my electorate. Some years ago it relied very heavily on tobacco and, then, on a coalmine and a relatively small power plant which closed down. The town has been searching for activities that it can lend itself to. In recent years they have been trialling industrial hemp. The member for Lyne might remember from a previous lifetime that, in the New South Wales parliament, I was instrumental in introducing what was essentially a legalisation, a licensing, of industrial hemp, excluding high-THC—dope-smoking hemp—to be grown as a product. That industry has not gone far. There are a number of people that are actually looking at it in Ashford as we speak. Only the other day the Inverell Shire Council passed a motion to look at promoting what the small community group in Ashford is trying to achieve. That group had trials last year. They have established a small market. They need assistance to try and grow the business and find out where the pitfalls are. They have the ingredients: the water, the land and the expertise and capacity to farm that land.

They are asking for some degree of help. I will be very supportive of that, because we never know where that goes. Industrial hemp, for instance, is a sustainable product. Cars used to be built out of industrial hemp rather than out of the materials they are constructed from now. Industrial hemp has been used for a whole range of things, not just for ropes, tarpaulins and various clothing products. You can make furniture out of industrial hemp. It is a renewable product. We should be looking at and encouraging these sorts of people. I do not think the bills we are looking at today actually encourage the little people to motivate themselves too much. In fact, if you relate these bills to what is happening at the state level, they may in fact be counterproductive for the little people trying to make their contribution to a sustainable future. Mr Acting Speaker—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

It is Deputy Speaker.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

Mr Deputy Speaker. I do apologise. I recognise that it is of significant—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I do thank you for the promotion!

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I know it is of significant difference to you, as I have had past indiscretions.

Mr Deputy Speaker, I was involved last year in a study tour to Europe and we looked at renewable energy sources, specifically in relation to climate change. I still cannot get over the enthusiasm of the researchers in those various countries. The researchers at the Scottish Crop Research Institute at Dundee were incredible in their enthusiasm for looking at various renewable futures. As I have mentioned in this place on a number of occasions, the European cropping systems are based on baling the stubble, because they have a narrow window of opportunity to plant the next crop. Currently, they bale the stubble and use it as bedding for animals or whatever else. Rather than just stop there, the Scottish are developing enzymes that will create biofuels from that biomass. In Copenhagen, for instance, I went to an electricity-generating plant that was fed by pure waste. The garbage trucks go out of a morning, pick up the rubbish, bring it back, dump it in these massive incinerators—and there are two of those—and create enough energy for half a million people in Copenhagen. That is yesterday’s fish and chips creating tomorrow’s power. There is nothing else involved. A by-product of that is central heating for people’s homes and businesses.

There is an enormous amount that can be done. The member for Braddon made that point. None of us—no party—has done anything other than touch the dictionary and touch the surface on renewable energy. I hope that, if we are serious about renewable energy this time, we will actually start to do something and allow the people on the ground to be partners in doing those things. Whether that is in terms of the farm sector and carbon in the soil, value adding through biomass to renewable fuels, solar, wind, geothermal or using the number of incentives put in place by these bills, we have to make sure that we start to go down that road rather than be trapped at a locked gate.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Renewable Energy (Electricity) Amendment Bill 2010 and related bills. I want to thank the member for New England for his contribution and say particularly that it is always good to see him go on the record praising the member for Braddon. I will make sure I pass that on to the member for Braddon, because he would be surprised to hear that occasionally there are slights raised from unnamed sources! I thank him for his contribution.

I want to start by going on the record to make sure that people understand the fundamental premise that I bring to this speech: that climate change is real. The second premise I bring is that acting later will cost far more than acting now. The other premise that I bring to this speech is that I am not any more valuable than a person in future generations. I have exactly the same value and they have the same value as me. Therefore, I need to consider their lives and their future in the things that I or we do now. They are the three premises with which I start this speech.

The Rudd Labor government are committed to real action on climate change. Late last year, we had our efforts to introduce the CPRS torpedoed by the Nationals, by the Greens, by Steve Fielding, by Nick Xenophon and by most Liberals in the Senate. Nevertheless, we will continue to transition our economy to a low-carbon future. If you want to know which party will take action on climate change, you just have to look at the votes on the CPRS in the Senate. The Nationals did not vote for it, the Greens did not vote for it and most Liberals did not vote for it. Only Labor senators and two dissenting Liberal Party senators did. The courageous Senator Boyce from Queensland and Senator Judith Troeth from Victoria voted with their convictions and had the courage to say that they were of the same value as future generations and they were prepared to make a decision. They did that even though it was harmful on the day when Tony Abbott won the coalition leadership on an anti-climate change ticket.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

The honourable member for Moreton ought to know that he should refer to the Leader of the Opposition by his title, not by his name.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

The member for Manly, the Leader of the Opposition, won the leadership—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Warringah.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Sorry, I am showing my old Rugby League background! The irony is that, if the Greens had given their support to the Rudd government’s CPRS in the Senate, we would have had a Carbon Pollution Reduction Scheme ready to commence from 1 July 2011. The Prime Minister, Kevin Rudd, and the minister for climate change, Penny Wong, would have taken this starting point to the climate change conference in Copenhagen. Who knows what might have flowed from that if we had gone to the world and said we, one of the biggest per capita emitters in the world, have a starting point and a platform. Who knows what could have transpired. Copenhagen did bring some positive outcomes and that should be recognised rather than seeing it as the member for Warringah does. However, it was not humanity’s finest hour that is for sure.

That did not happen last year. Instead, the Greens senators chose to play a strategic and self-serving political game along with the National and the Liberal senators. Not only did they sell out the environment in a big way, they sold out their supporters, who had trusted the Greens to stick up for the environment. It is only the Labor Party who is standing up for the environment and for the future of this planet. As we face up to the realities of a less-than-receptive Senate, the Rudd Labor government is more determined than ever to do what we can now to tackle climate change. As I said, the fundamental premise we start with is that to act late will cost more than acting now. That is why every dollar from the deferral of the CPRS is being invested in renewable energy.

The beauty of renewable energy is that it is generated from unlimited sources, as is the case with wind, solar, biomass, geothermal and hydro. Our planet produces these resources naturally. For the most part, renewable energy is also clean energy, producing little or no greenhouse gases or toxic waste. In a carbon constrained future we will need renewable energy technologies to provide low-cost emission-free baseload energy. Australia’s geology, climate resources, expertise and skilled workforce have us ideally placed to develop renewable energies like geothermal, solar and wind. Unfortunately, Queensland is not as blessed as some of the other states when it comes to wind. As technology improves, renewable energy is becoming more cost effective and efficient and, as I said, it can provide baseload power. The more we can rely on renewable energies, the more we can reduce our overall greenhouse gas emissions. The more certainty we can provide for the renewables sector, the more investment we will see to drive innovation and the development of new technologies. It will also make green jobs the boom of the future.

The Renewable Energy (Electricity) Amendment Bill 2010 will deliver greater certainty to the renewable energy sector, both large-scale projects and small-scale installers. It does so by separating the Renewable Energy Target Scheme into two parts—the large-scale renewable energy target and the Small-Scale Renewable Energy Scheme—from 1 January 2011. This will help ensure Australia meets its 20 per cent renewable energy target by 2020. In fact, with the increasing uptake of renewable energies from households, small businesses and community groups, and with the changes in this bill, we can expect to exceed the 20 per cent target by 2020—45,000 gigawatt hours of electricity from renewable energy by 2020. That 45,000 gigawatt hours number just rolls off the tongue and I will come back to what a gigwatt is in a minute. 45,000 gigawatt hours would be the equivalent of using the same hairdryer continuously for 2.5 million years. That is what we are going to remove from the system. It is a lot of hair drying obviously—2.5 million years with the one hairdryer.

Not only are we providing incentives for large-scale renewable energy producers, we are also giving Australian households the tools to do their bit to conserve energy and switch to renewables. This bill reduces the annual targets under the large-scale renewable energy target by 4,000 gigwatt hours, with the shortfall to be generated under the Small-Scale Renewable Energy Scheme. Now what is a gigawatt? For the edification of students who are not scientists, the most basic energy unit is a joule. Lifting a pen about metre in the air would require one joule of energy. A watt is the work done by one joule every second. So lifting the pen one metre in the air in one second would be working at the rate of one watt. People understand watts because we can talk about the old 40-watt or 60-watt light bulbs. As we have the minister for the environment here, he would be thinking of an 11-watt fluoro downlight rather than a 60-watt light bulb from days gone by. A fluoro downlight is about 11 watts and when we talk about a gigwatt we are talking about 90,909,090 fluoro downlights, to break it into understandable terms.

The new SRES will support installers of small-scale systems like solar panels and solar water heaters. It will create a new small-scale technology certificate priced at the fixed amount of $40. This means a householder installing a 1.5 kilowatt solar system would receive certificates worth about $6,000. A 1.5 kilowatt system is about a one metre by 1.5 metre solar panel on your roof, or maybe even slightly smaller. It is not much at all and most roofs could fit one.

The Office of the Renewable Energy Regulator will be required to estimate the number of STCs expected to be created each year to maximise certainty for liable entities. The annual targets will be adjusted each year to account for the actual number of small-scale technology certificates created in the previous year. Existing bank renewable energy certificates will only be eligible for use in the large-scale renewable energy target. Therefore installers from small-scale technologies will be required to surrender RECs at $40 each.

This bill reflects the Rudd Labor government’s commitment to a greener future. In addition to the renewable energy target, the government is also investing in generation-scale renewables through the $5.1 billion Clean Energy Initiative, including the Solar Flagships program, to support the construction of large-scale grid connected solar power stations. The Rudd Labor government remains committed to developing a sustainable solution to climate change for Australia and our region over the long term. This bill is another stop along the way. I commend the bill to the House.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

Whilst I am a massive supporter of seeing greater engagement in alternative energy options to both secure and make more affordable our energy supply for the future, I do have some significant reservations about the implications of this move for small schemes and the development of a small renewable energy scheme. There are implications of that on households and on the culture of ownership in both supply and demand management in regard to our future energy, environmental and economic needs of this country. Whilst I fully recognise that the Renewable Energy (Electricity) Amendment Bill 2010 and cognate bills will proceed through the parliament there are many aspects that are to be supported and lauded. Increasing investment security in large-scale investment is something to be endorsed. I have enough reservations at this time not to support this legislation because of the increased exposure that small households will have as a consequence. And there is the contextual question on what is the full package from government for these economic and environmental questions of our time.

I am uncomfortable supporting just one part of a package which 12 months ago I was being told had to be linked to a CPRS scheme from government. They were intimately entwined and there was no way possible that they could be broken. Yet now the proponents of that message, who only 12 months ago were saying this was all part of the one package, now say to me, ‘Oh no, it is fine to split them. We will push through the renewable energy certificates; the splitting of the large and the small. It is nothing to do with CPRS; nothing to do with emissions trading schemes. Don’t you worry about that.’ I am therefore uncomfortable sitting on this very wild train ride through environmental and economic policy when it comes to how we build the best, most sustainable, most secure and most affordable energy supply for the future of this country.

I am flagging that I will be voting against this and I am sure both major parties have already indicated they are fully supporting this. It will not create too much of a ripple, but I will outline the reasons why I continue to express my concerns. I live in a country—I hope I live in a country—where we do not leave people behind in policy. In regard to the development of a small scheme with a fixed price, I think the very reason behind the development of a scheme that is split between large and small is to increase investment security for large investors, but it is a zero sum game in my view. We are also, as a direct consequence, increasing the exposure of the householder and the small-scale technology that does want to contribute and does have a want to participate and does have a desire to own this issue. If we are going to start with the broad philosophical, it is this clash of ideals that I am feeling with the two major parties now jumping into bed and saying that large investment is the way forward in policy for energy security and renewable energies at the expense of the small-scale systems and households.

I take a counterview and I do think there are alternative policy options in the marketplace that have been rejected by government and opposition that say we choose a much smarter path by looking towards the ownership culture of both the problem and the solution and of both the demand and supply side. Those options are there. A national feed-in tariff scheme has been brought into this parliament by several people—and has been rejected by government—to get some consistency in the way this country deals with one of its greatest energy supplies, and that is the sun above us. Households can engage in a national electricity market, both on a supply and demand side, and manage their own issues of energy supply and use. Yet that has been rejected by government, because the ‘suits’ in Canberra go into the offices of the various players and win an argument that the culture of investment in large-scale infrastructure is the best and only way forward for this country in regard to clean, green energy supplies and affordable and secure energy supplies for the future.

By no means is this to deny the role that large-scale investment plays, but I do not think that in a policy sense we are being as creative as we can be and as responsible as we can be in chasing large-scale investment at the expense of households and small-scale technology. If anything, we have an obligation as policymakers to embrace and encourage the ownership culture. I make that point for several reasons. One is that we will fail if every single household is not engaged on this. If people are not very aware on a daily basis of their electricity use in their own households and take some ownership of that and are supported in owning that through financial means, then we will fail. It will not matter what level of investment—large or small—we want to see committed. As well, I would hope policymakers consider on a broader scale the difference and the contrast between having several large investment sites, with the poles and wires and everything that has to go with that in getting it to the retail market, compared to the contrast in a policy sense of a large number of sites with a smaller investment needed to get it to the market.

Every household potentially has the ability to be the mini generator that we all desire. The beauty in a policy sense is that it is demand side and supply side at the one point of contact. There is no need for the double handling of getting supply to market. That should be considered an advantage when establishing policy frameworks and therefore is an alternative option which is worthy of greater consideration. There are some ironies in this legislative package. I will begin by identifying the irony that this is a mini CPRS. This is a cap-and-trade scheme which is already in operation in the marketplace and already accepted by many operators. It is having minimal impact. The figures have been released today in estimates that it is about $2 a year in regard to RET schemes into the future, having minimal impact on the electricity supply at every household.

There are some political ironies here in that we have had some of the most unholy of punch-ons in regard to putting a price on carbon and whether we as a nation are comfortable with a market based response to these natural resource questions. And at the same time, over the last five years we have been doing it because we have a scheme in place. This is the Mini-Me of CPRS schemes which has the full endorsement and support of the coalition. It will be voted on and supported today by the coalition. So the great big tax of the last six months is no good but the quiet little new tax is okay within a RET scheme—some political irony. The figures out today in estimates show that it will lead to some increases in household electricity prices but minimal increases with benefits attached. All of this has to be a contextual debate.

I do not have a problem with the scheme itself. I think there are huge ironies in the fact that both the government and the opposition do not have problems with the scheme, considering their broader positions on market based responses on climate and energy questions, but in the detail of how this has been designed we are leaving people behind. We are increasing the exposure of households who want to participate, and ownership and the culture of ownership is a critical opportunity which will be lost if we go down this path of focusing purely on how many large investments, wind farms, we can get operating in this country. That is one that might sit well in political mythology when ministers are standing on the campaign box and saying, ‘My scheme will deliver $19 billion worth of investment by 2020 and we are 22 per cent rather than 20 per cent ahead of where we want to be.’ Unless we engage the Australian population on this and on the range of packages available, we are going to fail.

While I have the chance, I throw into this basket the green loans scheme and the insulation scheme, and I throw them in from an angle which is different from everyone in this place. I am a fan. I think they are sensible, conceptual schemes for exactly the reasons I have been talking about for the last 10 minutes. They engage households in both the problem and the solution. Home sustainability is an option for dealing with the moral challenges of our times and is an eminently sensible policy approach. Yes there were delivery questions but they, over time, can and should be resolved. It disappoints me and I know many in the community. You only have to look at the polling: at the moment the disappointment is reflected at the ballot box.

The government seem to have walked away from engaging the home in a sustainable and affordable future. I would hope the green loans scheme survives. At a cost to government it is minimal in the overall budget and the return on the demand side, in growth areas particularly like the one I represent, is significant. It means Country Energy, for example, does not have to increase electricity prices by 40 per cent as their recent New South Wales report said, and largely that increase is due to lack of investment in poles and wires. If we can get the demand side under control through engaging households we will minimise the overall cost to all in rising electricity prices and therefore home sustainability. Any programs from government that engage households in the problem and the solution are very welcome initiatives for the majority of taxpayers.

Likewise, for all the wrongs of dodgy insulators—and there are stories that will be revealed to all and the naming and shaming will continue—the underlying concept of the program was and is a good one. I think allowing people to take ownership and engage is an eminently sensible policy approach.

In the development of this and in the context of all that has gone on in this place in the last six months where we have seen the 180-degree turn from the coalition and the Malcolm to Tony move, when we have seen the 180-degree turn from government, from ‘Sensible Kevin’ to ‘Nervous Kevin’, we need—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

The honourable member Lyne ought to refer to other honourable members by their position and not by their name.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

The ‘sensible’ Prime Minister; the ‘nervous’ Prime Minister, the change from the member for Wentworth to the member for Warringah—these are the 180-degree flips that have occurred within the last six months that have the community confused. There is currently a sense in the community of a policy void in government. It will take an enormous amount of work from government in a particularly wired election environment to recover the moment and to put in place a policy strategy that the community believes in, that is deliverable and that engages the community and government in working together, rather than one that creates the current policy void and confusion.

I take this opportunity to raise the issue of the smoking guns that I have seen over the last six months. I smelt a rat in the shift that I saw and what looked to be—to their credit—a very well organised and very well-funded campaign from the likes of JoNova and Viv Forbes. There is more going on in those stories than meet the eye and they have seen the two major parties scat on the issue of action on climate change and on an affordable and secure energy supply for our future. The shifts that we have seen from both sides have created an unstable energy market and are a great disappointment. Again, I think there are a whole range of interests other than the national interest at play in the political process in this place that point to further smoking guns.

Another point I want to make and one that I hope Minister Garrett and Minister Combet, who are at the table, will consider is my concern about the contrast between government policy and the people who I see in my community, either as a household or as a small business, who want to embrace many of the issues around renewable energy and broader energy security. They are doing it; they are basically getting on with it. However, the policy development and advice from the energy and environmental departments looks to be given ‘with fear’ and ‘with favour’; it is found wanting. In my view, those departments show an inability to contribute without fear or favour to robust policy development in this country. Further, the delivery of those outcomes looks to be a bit of a smoking gun. I think these two departments have been found wanting. This has been captured more by some of the old school culture of the energy department rather than some of the vibrant new minds that we might find in the public sector. I hope I am wrong but there have been too many policy misfires for me to think otherwise. That is one for the ministers at the table to consider.

Whilst I will be voting against the legalisation, I think there is a way forward. We do need the question of a price on carbon answered—and quickly. It is creating an unstable environment. There are a range of doables now, and I would encourage the ministers at the table to look at what ClimateWorks Australia have been doing. They gave some excellent presentations in this place this week. There are some really positive steps that can be taken now to set us up well for the future.

The small-scale energy security is a question that has me really baulking today. This legislative package increases the insecurity around small-scale business and household engagement. There is still a policy void regarding the question of home energy sustainability; it is one we need some direction and answers on quickly.

Greg Combet (Charlton, Australian Labor Party, Minister Assisting the Minister for Climate Change) Share this | Link to this | Hansard source

As the member for Lyne was the final speaker, I would like to thank members for their contribution to the debate on the Renewable Energy (Electricity) Amendment Bill 2010, Renewable Energy (Electricity) (Charge) Amendment Bill 2010 and the Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Bill 2010. Each of these bills has been the subject of a cognate debate.

The bills together will implement the enhanced renewable energy target to separate the existing scheme into two parts. Firstly, the Small-scale Renewable Energy Scheme and, secondly, the large-scale renewable energy target will both take effect from 1 January 2011. The renewable energy target is a key measure in the government’s climate change policy designed to deliver on the government’s commitment to ensure that the equivalent of at least 20 per cent of Australia’s electricity will come from renewable sources by the year 2020. The enhancements will provide greater certainty for large-scale renewable energy projects and installers of small-scale renewable energy systems such as solar panels and solar water heaters.

I would like to briefly summarise the debate and respond to some of the points that have been raised by members of the House. Firstly, the 20 per cent renewable target by 2020 is a challenging but significant increase on the previous mandatory renewable energy target, and it will drive investment in Australia’s renewable energy sources such as wind, solar and geothermal power. The large-scale renewable energy target in 2020 will only be met with substantial growth in large-scale renewable energy generation projects. Modelling released by the government yesterday shows that the changes are expected to deliver more renewable energy than the original 20 per cent target, reaching around 22 per cent by 2020, which will help transform the electricity sector and support investment in both large- and small-scale renewable energy projects. This is a very important initiative. Further, the enhanced renewable energy target is expected to drive up to $19 billion in total investment in large-scale renewable energy generation in the period 2020-30. Importantly, these changes are only expected to add $2 per year to a typical household’s annual electricity bill.

On the issue of the renewable energy target support for emerging technologies, it has been suggested that the RET should be banded to ensure the deployment of less mature renewable technologies. The RET Scheme encourages the deployment of renewable energy without picking winners within the target. As I have indicated, the renewable energy target is in fact very large. It increases the current Mandatory Renewable Energy Target Scheme by over four times. Due to the large size of the target, the RET will pull through a range of technologies including wind, biomass, solar and geothermal energy. The RET is complemented by significant direct support for the development, commercialisation and deployment of emerging renewable energy technologies through the $5.1 billion Clean Energy Initiative announced by the government.

The government has now committed more than $200 million to accelerate geothermal energy technology development, demonstration and deployment in this country, leveraging a total investment in excess of $720 million. Funding for several geothermal projects has already been announced. In that context it is not considered appropriate to be banding, as it has been described, the renewable energy target.

There has been some suggestion of rorting of government support for heat pump water heaters. The government became aware last year that some installers of heat pump water heating systems had been inappropriately claiming renewable energy certificates under the RET Scheme, introduced by the previous government in 2001. Some concerns were raised that multiple heat pump hot water systems or excessively large systems were installed above the capacity actually required by the user in order to generate the certificates. In September 2009, regulations came into force to address that issue. These regulations were put in place to prevent the oversizing of heat pumps. The regulations require statutory declarations to ensure that, for units with a capacity of over 700 litres, the unit is appropriately sized for its intended use and that there is an intention that it remain in its original configuration and location for the life of the unit. This has had a significant impact in ensuring that renewable energy certificates are claimed only for appropriately sized heat pumps and addresses the issues that have been raised.

Furthermore, there has been some commentary on the closure of the Solar Homes and Communities Plan. Solar credits under the Renewable Energy Target Scheme replace the support previously provided through rebates under the Solar Homes and Communities Plan for installing rooftop solar photovoltaic systems. By legislating support, solar credits will provide increased certainty to industry and the community with respect to the solar PV systems.

On the issue of government support for renewable energy generally, the renewable energy target is, as I have said, a part of a suite of government policies encouraging the switch to cleaner energy. In particular the government is providing funding for research, development and demonstration of clean energy technologies, including renewables, through the $5.1 billion Clean Energy Initiative. This incorporates the recently announced in the budget Renewable Energy Future Fund, which will provide an additional $652.5 million over four years to support Australia’s response to climate change.

The Australian Centre for Renewable Energy is a key plank in Australia’s commitment to clean energy technologies and to deploying these technologies around Australia. It draws together more than $560 million in order to accelerate the development, commercialisation and demonstration of renewable energy technologies and it will, therefore, complement the government’s investment in generation-scale demonstration projects under the Solar Flagships program and the sustained commitment to household and community-scale renewables through initiatives such as the Solar Cities program and the National Solar Schools program. In addition, the Prime Minister’s Task Group on Energy Efficiency will report shortly, in mid-2010, on other important new energy efficiency measures.

In conclusion, the amendment bills before the House today will encourage the deployment of both major renewable energy projects and household-scale renewable energy systems. The renewable energy target is a key measure in Australia’s climate change policy and these changes will deliver significant and timely sets of enhancements that will reduce Australia’s emissions. The enhanced renewable energy target will drive significant investment, accelerating the deployment of a broad scale of renewable energy technologies like wind, solar and geothermal. These changes will ensure that 20 per cent of our electricity supply comes from renewable sources by the year 2020. These bills represent a major step forward towards the transformation of the Australian economy and the building of Australia’s low-pollution future. I commend the bills to the House.

Question agreed to, Mr Oakeshott dissenting.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.