Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Environment, Climate Change and Water) Share this | Link to this | Hansard source

I rise on behalf of the opposition to indicate our support for this legislation, with one exception, relating to part 4 of the bill. But I do want to indicate our broad support for the Renewable Energy (Electricity) Amendment Bill 2015. The opposition does not do this with any particular sense of joy. We do it more with a sense of relief. In introducing this bill, and his second reading amendment, the minister indicated that the change, particularly to the Large-scale Renewable Energy Target, was, to use Minister Hunt's words, 'to better reflect market conditions'. We do not agree with that diagnosis. Instead, what this bill does is to pull an industry, a critical industry, back from the brink and put it back on a stable footing, not only in relation to the existing investments that do so much for our electricity sector and underpin so many jobs, but also to allow further investment to take place.

The government and the opposition need to do this because of a reckless and gratuitous attack that the Prime Minister launched on the renewable energy industry last year, adding this to a very long list of broken election promises. The election promise that the government made in relation to the Renewable Energy Target was not a vague promise. It was not off-the-cuff or ill considered. It was a promise that extended back many years—back to, in its second form at least, the renegotiation of the Renewable Energy Target between Minister Wong and then shadow minister MacFarlane, who is in the chamber and is now the Minister for Industry—

Ian Macfarlane (Groom, Liberal Party, Minister for Industry and Science) Share this | Link to this | Hansard source

And science!

Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Environment, Climate Change and Water) Share this | Link to this | Hansard source

and Science, as he is at pains to stress in this place. You will have your chance, Minster for Industry and Science. The Prime Minister, as the opposition leader, voted for the Renewable Energy Target, in 2009, and he took the coalition's support for the Renewable Energy Target to elections in 2010 and in 2013. Although the Renewable Energy Target policy, before the framing of the actual legislation, was often described in an everyday sense as 20 per cent by 2020, it was quite clear that the coalition was expressing support for the large-scale target that existed in legislation before the 2013 election of 41,000 gigawatt hours. The bipartisan support that the renewable energy industry, through the Renewable Energy Target in particular, has enjoyed goes right back to 2001, when the then Howard government, involving, again, the now Minister for Industry and Science, developed the first mandatory Renewable Energy Target, back in 2001. That bipartisan support has been critical to underpin the confidence of investors—both investors here in Australia, but more recently investors from overseas—to come and put their money on the table for investments that run for many years, for 15 to 20 years in many cases. Obviously these are investments that, in the ordinary course of things, would span at least a couple of changes of government.

Because of that bipartisan support and the investor confidence that came from that, we have had extraordinary success, particularly during the last term of the Labor government, from 2007 to 2013. There have been billions of dollars invested in Australia's renewable energy industry, both in the small-scale part of the sector, particularly rooftop solar, but also in large-scale renewable energy investment. During our term in government between 2007 and 2013, Australia's wind power tripled in just six years. There were a whole range of wind farm projects, particularly over the southern part of the continent, but also some iconic projects were developed, particularly, towards the end of our term in government, often with the support of the Australian Renewable Energy Agency, ARENA, and the Clean Energy Finance Corporation. In 2013 alone, the Gillard government was able to announce the largest wind farm in the Southern Hemisphere, the Macarthur wind farm in Victoria. It was supported by a range of proponents, including AGL. Later in that same year the largest PV solar farm in the Southern Hemisphere was announced, again being built by a range of partners including AGL, in Nyngan and in Broken Hill, in Western New South Wales. This really highlighted the degree to which Australia had become a world leader in renewable energy development—in the small-scale sector, but particularly the large scale sector. Ernst & Young does a quarterly index called the Renewable energy country attractiveness index, which is broadly regarded around the world as one of the leading indices of renewable energy investment. In 2013, in the June quarter, before the change of government, Australia had joined the powerhouses in this area—Germany, China and the United States—as one of the four most attractive countries on the face of the earth in which to invest in renewable energy.

Over that course of time, during our time in government—and it will not be of any surprise to anyone hearing those statistics—the number of jobs tripled in this industry. That was a period that included—which those opposite often choose to forget, but all the rest of us know—the global financial crisis. There are not many industries that over that period were able to triple the number of jobs. And they were not just the core jobs in renewable energy; there were spin-off jobs in manufacturing that had been in many cases operating for some time, in places like Portland and Tasmania, building components for wind towers. But also in my own part of Adelaide, in northern Adelaide, Elders IXL, a very old family company that had work in appliances and more recently in automotive components, took the decision to invest in a factory in northern Adelaide to build, using Australian steel, the frames that were used to support the PV solar panels in the wind farm at Nyngan and Broken Hill—around two million panels on about 100,000 steel frames made from Australian steel, great manufacturing jobs in the north of Adelaide.

Also over this period a huge success story was emerging in rooftop solar. The Small-scale renewable Energy Scheme, or SRES, part of the renewable energy target legislation, has underpinned an explosion in the number of solar panels on the rooftops of Australian homes. When we came to government around 7,400 households in Australia had rooftop solar panels. By the time we left it was more than 1.2 million. In 2014 alone, in spite of the uncertainty that had afflicted the renewable energy industry because of the Prime Minister's reckless attack on the Renewable Energy Target, there were still about 186,000 Australian households with rooftop solar panels added to their roofs, with about 3½ thousand per week being added on average. Just to give that some context, only 14 years earlier, at the turn of the century, in 2000, an average of two households a week—not 3½ thousand but two—were having solar panels added to their roofs, exemplifying the degree to which this has genuinely been a revolution.

The renewable energy target and associated policies has also been a roaring success in starting to bring down carbon pollution levels in Australia's electricity sector. That is central to the challenge we have as a nation in our response to climate change, because electricity generation is the largest source of carbon pollution in our economy. Australia has a very emissions-intensive electricity sector, particularly in generation. It is more emissions-intensive than China and about 90 per cent more emissions-intensive than the OECD average. So, getting carbon pollution down in electricity generation is a central part of the national response to climate change. In 2012-13, the first year of the operation of the carbon price mechanism in the national electricity market, carbon pollution was reduced by seven per cent, in just that one year. That was due in part to a reduction in demand, but only in small part. Two-thirds of that reduction in carbon pollution from the national electricity market was because of a change in energy mix, a significant reduction in the market share in the NEM of coal, particularly brown coal, and an increase by 25 per cent in the renewable energies share of the national electricity market. That reduction continued in 2013-14, a reduction of four per cent in carbon pollution levels from the national electricity market. But, unsurprisingly, given the termination of strong climate change policies and the attack on renewable energy investor confidence, carbon pollution levels have started to rise over the past 10 to 12 months on this government's watch.

South Australia is a great example—and I do not say that just because I am from that state—of the inroads that can be made on carbon pollution levels through strong investment in renewable energy. Since 2005—in less than a decade—in spite of having largely equal demand from our electricity generation over that period, carbon pollution levels have been reduced by a third, from nine million tonnes on average in 2005 to about six million tonnes of carbon dioxide equivalent, in part due to some expansion in electricity generation through gas but overwhelmingly because of the enormous investment in renewable energy, particularly wind and solar generation in that state.

Also, something that is very important in terms of the political backdrop to this debate is that the renewable energy target has helped to keep downward pressure on household and business power prices. For the Prime Minister, this is really where this all went off the rails. In an interview with Sydney broadcaster Alan Jones in the earlier part of 2014 the Prime Minister claimed that the renewable energy target was, to use his words, 'pushing power prices up'. In the subsequent several months four significant pieces of modelling came out, including by the Prime Minister's own hand-picked panel, the Warburton review panel, which confirmed that the expansion of renewable energy capacity in the system operated to put downward pressure on power prices, particularly wholesale power prices, flowing through in terms of power bills for households and small businesses.

Because of that extraordinary success, the sector was on track to achieve the large-scale target of 41,000 gigawatt hours, and, again, the Prime Minister's own hand-picked panel, the Warburton review, confirmed that there were enough projects in the pipeline to achieve that large-scale target. But the Prime Minister's ambush on this policy in the first half of calendar year 2014 caused investor confidence, which had been sky-high only 12 months earlier, to absolutely crash. The 2014 figures from Bloomberg New Energy Finance confirmed that a shocking picture immediately followed the Prime Minister's attack. Investment in the large-scale part of the market in Australia collapsed by 88 per cent in 2014 alone. At a time when renewable energy investment around the world soared by 16 per cent and in China soared by 32 per cent, investment in Australia collapsed by 88 per cent. The total money invested in 2014 saw us drop, in aggregate terms, from 11th in the world in terms of dollars invested to 39th, behind countries such as Myanmar, Honduras, Panama and others which became bigger investors in renewable energy than Australia. Billions of investment was at the edge of the cliff and thousands of jobs were at risk.

Labor have great ambitions for renewable energy in Australia. From our point of view, the renewable energy target for 2020 and the associated policy framework, such as ARENA and the Clean Energy Finance Corporation, is just a beginning for further investment and further expansion in renewable energy. Australia is blessed with some of the most extraordinary renewable energy resources in the world. We have extraordinary wind resources, particularly across the southern half of the continent, solar resources across pretty much the whole of the continent, marine resources, particularly in the Southern Ocean, and much, much more. We want a base that will see further investment in renewables, not less investment. Our very clear view is that the Australian people take the same view on that.

Labor could have sat back and watched this fairly tragic story unfold after the Prime Minister's attack on the renewable energy target and said, 'They are the government. They need to pick up the mess.' We reflected on that. We took the view that our very serious concern about the long-term damage that would be done to Australia's reputation as a safe investment destination, particularly in energy and renewable energy, required us to go to the table and do all that we reasonably could to restore investor confidence, which, after all, has been our overarching objective through this.

This deal does that. The deal that has been struck between the government and the opposition, as the two major parties of government and two parties of alternative government in this country, does that. This restores confidence in the rooftop solar sector. Confidence had been damaged by recommendations from the Warburton review that that program be scaled back. It was recommended that that hugely successful and very, very popular program in the Australian community be scaled back. In particular, the Warburton review focused on potentially scaling back the small-scale scheme from a ceiling of 100 kilowatts, which is particularly important for small businesses and organisations such as nursing homes and the like, to just 10 kilowatts. I am very glad that, following a strong campaign from the industry, coordinated by the Solar Council, we have been able to restore confidence in that part of the market through this deal.

This deal and this legislation also restore confidence in the large-scale renewable energy target. The Labor Party would far prefer that the Prime Minister had stuck to his election promise to roll out 41,000 gigawatt hours of large-scale renewable energy by 2020. But, given we have lost 18 months of investment during this period of time, 41,000 gigawatt hours is broadly not obtainable anyway. So 33,000 gigawatt hours as the new large-scale target is something that we are confident, based on all of the advice we have, will restore investor confidence to the large-scale part of the industry. It will require, as the Minister for Industry and Science has indicated on a couple of occasions now, that the industry pretty much double the existing large-scale renewable energy that it has built over the last 15 years in the next five years. So it is a very substantial and reasonably ambitious bill task for the large-scale sector, but every indication shows that it will be able to be achieved.

The Clean Energy Council indicates that the 33,000-gigawatt-hour large-scale target will mean that about 30 to 50 large projects will be built over the next few years, involving about $10 billion in investment and 6,500 jobs. In broad terms, there will need to be 6,000 megawatts of capacity added. The industry has said for some time now that there are more than 6,500 megawatts of capacity involved in projects that have already received project planning approval. Almost all of them are either large solar or wind projects. So we are very confident that we have restored investor confidence and that we can achieve this target.

On the basis of the deal set out in this legislation, the government says that we are likely to be in a position in 2020 of having around 23.5 per cent of Australia's electricity delivered by renewable resources. That depends on what you think will happen in the rooftop solar program and also where you think electricity demand might be by the end of the decade. But it may well be that we will even be close to 25 per cent of Australia's electricity being delivered through renewables. Although Labor is disappointed that we were not able to see the rollout of the previously agreed large-scale target of 41,000 gigawatt hours, there is no question that this deal still provides a strong platform for further growth during the 2020s.

Now Labor want to focus on the future. There are exciting technologies emerging almost every week, it would seem, in this industry—in the solar sector, the wind sector and many other emerging renewable sectors such as marine and geothermal. Particularly exciting technologies have started to emerge this year in the area of storage, large-scale renewable projects and also particularly households and small businesses. Labor want to start talking now. We have been able to move on from this controversy. We want to start talking to the industry and the community now about our ambitions for the future.

The Leader of the Opposition has indicated that, if we are elected at the next election, be that this year or next, it would be our proposal to move to lift the large-scale target for 2020. We think particularly in the out years of the decade that there is extra capacity there. We would only do so, obviously, in a way that was consistent with market stability. The Leader of the Opposition has also indicated that we are already talking with industry stakeholders about post-2020 arrangements. In order to do that in a measured and orderly way, we think that those discussions need to start this year and next so that any legislation that would start to build a platform for post-2020 arrangements was able to be put in place, at the latest, by mid-2018. We are very confident now with this platform that we can have those discussions.

Labor will also continue to defend the work of the Renewable Energy Agency, ARENA, and the Clean Energy Finance Corporation from the attempts by this government to abolish those two organisations. We will do everything that we can in the Senate and in the community to continue to prosecute the arguments for keeping those two very, very important organisations.

Before I address the remaining point of disagreement around native wood waste, I want to say, firstly, a few more words about the process that led to this legislation. We took the view—I think the government took the view, ultimately, as well, as does the industry—that bipartisan agreement in this area, particularly for the large-scale target, is critically important. This is not a deal you can land with the crossbench.

Investors will not invest for multi-year projects on the basis of a deal done with the crossbench. They want to know that the two parties of government have agreed with the core elements of this policy. That was the view we, the opposition, took early on. I thank the shadow minister for resources and energy, the shadow Treasurer and the Leader of the Opposition and his office for the very resolute view they came to, early, that we needed to sit down with the government to see if we can resolve this controversy.

Those were constructive and mature negotiations, largely conducted with the Minister for Industry and Science and the Minister for the Environment. I thank both those ministers and their officers for the way in which those negotiations proceeded. I also thank on behalf of the opposition the frank advice we received from the industry and stakeholders, the Clean Energy Council, the Solar Council, Solar Citizens and many other organisations that were active participants in this process.

The bill now sets a new yearly large-scale target between now and 2020—or new targets every year between now and 2020—which we understand has been the subject of consultation with the sector and the Clean Energy Regulator. They now have our support as well. The bill also provides full exemptions for the emissions-intensive trade exposed sector. This follows strong advocacy by the Leader of the Opposition on that point—particularly in relation to the aluminium sector but also in relation to a number of other parts of manufacturing—by Tasmanian members of the Labor caucus, led by the member for Franklin, by the member for Corio, in relation to operations around Geelong, by the members for Newcastle, Charlton, Shortland and Hunter and the member for Makin, in my own state of South Australia, Labor's parliamentary secretary for manufacturing. I thank them all for their support and advice.

The bill provides for the Clean Energy Regulator to prepare annual reports on the progress of the renewable energy target. Opposition takes the view that this will be a useful addition to the debate, although we do trust that the report on power prices will look at the net impact of power prices of this scheme—not just the impact of the certificates but also the impact the scheme has on wholesale power prices—in order to give a true reflection. The bill also removes the two-yearly reviews, which I think we now all agree will provide much more certainty for investors. As the minister said in his second reading speech, the major parties have agreed to work cooperatively to resolve any issues that may arise with the operation of the renewable energy target to 2020. The opposition indicates its support for all those elements of the bill.

I talk now to a part of the bill that Labor cannot support. That is the reinsertion of native wood waste into the scheme. It is worth repeating that Labor has approached these negotiations and the debate around this bill with an overarching objective of restoration of investor confidence in the renewable energy industry. Advice we have received from the industry, more broadly, and those parts of business that fund the industry, through equity or debt, has been that this question of native wood waste is not material to the question of broader investor confidence. It will not impact on broader investor confidence, either way.

As I have said publicly on a number of occasions, our view is that this attempt to reinsert native wood waste into the renewable energy scheme is nothing more, nothing less, than a cynical red herring that was foisted on the government negotiators at the last minute and which they put on the table, again, at the last minute. It is not an issue that was raised with me, at any point, during negotiations—they went for some 12 months—with the industry as something that was a critical issue for them.

Labor's position on this question should be very well known, and for anyone who has an interest in this it should come as no surprise. It was the Labor government that took this provision out of the renewable energy scheme some years ago. It was inserted originally under the Howard government. It was a Labor government that removed this element of the Howard scheme, from the scheme, some years ago. It was also the Labor government that proposed attempts to reinsert native wood waste over the last couple of years. So it should come as no surprise that the Labor Party opposes this attempt again.

We take the view that native wood waste is neither clean nor renewable, in the sense that term is used in the modern parlance for the renewable energy scheme. Boosters of this provision like to pretend that what we are talking about here is small amounts of waste, small amounts of refuse, that are left on the forest floor after some harvesting. Small amounts are raked up, put into a pile and then put into a wood furnace. It is not the case. That is not an accurate way to describe the work this provision put forward by the government seeks to do. We know that the definition of native wood waste would involve the whole of any tree that is harvested but not ultimately saw-lopped. It would involve all the remaining parts of a tree that were harvested from a native forest, except that part of a tree that was saw-lopped.

Labor is not willing to see the renewable energy scheme used to provide an alternative to the hard work, the really serious questions, that need to be debated around the future of our traditional logging industries, not just in Tasmania but more broadly around Australia. We are not willing to see the renewable energy scheme used to provide an alternative to the hard work that was under way during the Tasmanian forest agreement between industry, the CFMEU representing workers in the industry, environmental organisations and the Tasmanian and Commonwealth governments. The cynicism of those, particularly from the Tasmanian state Liberal government, who would now seek to insert native wood waste back into the renewable energy scheme, given the damage that they did to the Tasmanian forests agreement, is breathtaking. It is simply breathtaking.

To that end, I indicate that during consideration in detail and the third reading of this bill, I will be moving amendments that have already been circulated in my name. Firstly, to remove the provisions in this bill that seek to reinsert native wood waste into the scheme, and, secondly, to amend the act to prevent any future regulation being made by the government to reinsert native wood waste into the scheme. I commend the amendments when they come before the House, to the House.

Ian Macfarlane (Groom, Liberal Party, Minister for Industry and Science) Share this | Link to this | Hansard source

In rising, can I thank the shadow minister for the environment, and other shadow ministers, for their participation in the negotiation. As is always the case, there was a fair amount of useful and helpful discussion to ensure that we did clean up the mess that had been left by the previous government in relation to the renewable energy target, as we do in a whole range of areas—I mentioned the Home Insulation Program yesterday, and of course we know about the mess left in the budget.

This renewable energy scheme, as the shadow minister quite rightly identified, was originally introduced by this government. In fact, I lay claim to being one of the few people, as a minister, who has been involved in this issue since it was first instituted, in 2001, when I was the Minister for Industry, Tourism and Resources. This scheme was heading for the rocks, and it was in a state where the target was no longer sustainable. We set out as a government to make sure that the renewable energy target was a sustainable target, and that the renewable energy industry itself was sustainable, because it relies very heavily on this scheme—very heavily. We are getting close, particularly on rooftop home solar, to a scheme that may be able to stand on its own two feet without others subsidising the cost of those things—and we are close in a number of other areas—but renewable energy in Australia, and in fact globally, still requires a subsidy from electricity consumers. We need to be sure that we have the balance right.

We said in opposition— as members of the Clean Energy Council would recall if they thought about it, because I said it on three occasions in front of them—that the coalition, in government, would support a renewable energy target of 20 per cent. My view was that the target should be more aligned to the original aspiration, which was 20 per cent of the energy consumed in the form of electricity. The target of 45,000 gigawatt-hours that we were confronted with when we came to government was more like 27 per cent, and there was a real question mark as to whether or not this scheme was sustainable from the perspective of even building that amount of renewable energy. As we know from experience, and a little bit of disappointment, that target will be achieved only through one technology, and that technology is wind.

I heard the shadow minister talk about jobs, and jobs are important in the renewable energy industry, but we need to remember that those jobs are subsidised to the tune of $200,000 each. No job that requires the support of electricity consumers to that degree can be given without some questions being asked about how we want this industry to take shape.

There has been, at the bottom of this, a discussion about the changing shape of energy markets—and cue a joke about economists, but I will not tell the House the same joke again, although it is very funny! The reality is that the economic forecasts made in 2009 about the amount of electricity we would be consuming in 2020 were wildly inaccurate. That is for a whole range of reasons, not all of them because of a change in the economy and the change in industry. The reality is that we have felt a significant impact from things like rooftop solar, and more particularly from energy efficiency, with the introduction of smart meters, and with consumers understanding how they can save electricity and not only benefit the environment but also benefit their own pocket. This has seen a significant change in energy consumption and energy consumption forecasts. That is why a target of 41,000 gigawatt hours for large-scale, combined with what we quite happily saw was an explosion in the number of houses that were fitting rooftop solar, would have meant that the renewable energy scheme was going to far exceed not only the expectation, but, in the case of large-scale, the ability of the industry to build a scheme that would have been 27 per cent of electricity consumed.

The other fundamental issue is that as a result of the change to energy demand Australia is suffering from a massive oversupply of generation capacity. We currently have in Australia around 9,000 megawatts of over-capacity in generation, or about 15 per cent more generation than we need. That position makes managing the energy market in Australia particularly difficult. It also means that adding another 5,000—I heard the shadow minister say 6,000—megawatts of generation to the target is going to put further pressure on that market. So getting people to buy the electricity that was being generated by the wind farms was proving to be impossible. I heard all the conspiracy theories—I have heard them all before. With all respect to the shadow minister, perhaps he should talk to the shadow minister for resources and energy and actually get an insight into how the energy market works, because it was the inability of renewable energy components to get off-take agreements, or someone to actually buy their electricity, that was grinding these projects to a halt. There was still plenty of room—anything that had been built in the time that we had been in government would have been grandfathered under whatever the outcome was. The industry knew that the minimum position was 26,000 gigawatt hours. So that is an excuse from the shadow minister and, I dare say, a political point which does not become him, because the reality is that without a clear path on the Renewable Energy Target set out in a bipartisan way then there was just not the confidence in the market for people to actually commit themselves to buy the electricity from these wind farms for the next 15 years.

I did also say that there has been an enormous penetration into the market—and it is a great thing—of rooftop solar household renewable energy. A prediction—cue the economist joke—of 4,000 gigawatt hours of generation from rooftop solar is, again, wildly incorrect. In terms of the capacity in generation that is coming from rooftop solar at the moment, 7,000 gigawatt hours has already been achieved. It looks to us—as in the collective wisdom of economists, departments, government and people in the energy industry—that that number will actually double in the period between now and 2020 as rooftop solar becomes a viable proposition with the Renewable Energy Target because you can buy a rooftop solar system and have it pay for itself sometimes in as little as five years, and the coming advent of battery technology will make that even more viable.

We have seen a massive acceleration in generation from rooftop solar. So, when people talk about what the target is, the target is still 45,000 gigawatt hours, but the mix has changed. In terms of how much will come from large scale, we know that number is now going to be 33,000 gigawatt hours. How much will come from rooftop solar? Probably another 14,000 gigawatt hours, and you only have to do your maths to know that that is 2,000 gigawatt hours more than the 45,000 gigawatt hours that was originally agreed to in 2009, and, as I said, the revised target is now about 23 per cent of energy consumption.

We are confident that not only do we have a scheme that now gives the best opportunity to put the renewable energy industry in Australia on a sustainable level but we also have a scheme that householders and industry can afford, because someone has to pay the cost of this scheme, and it is substantial. It is not $1 billion. It is not $10 billion. It is at least $20 billion, and that has to be paid for by industry. In terms of the impact of that, we want to make sure that we are getting the result that we as a nation want.

Australia has a lot to be proud of in terms of renewable energy and in terms of our position in the world. Although sometimes you would think that we were absolutely back in the stone age, we are, in fact, amongst the world leaders. In fact, if you would look at rooftop solar, it is us first, daylight second and, I think, Hawaii third. Then we have those people who like to look down their noses at us from perhaps the EU or somewhere like that who are way behind us. Australia leads the world by a country mile in rooftop solar. So this nonsense that goes on about us not pulling our weight or doing what we should or taking advantage of our position is just that: nonsense.

We are facing a bit more of a challenge in terms of getting commercial large-scale solar up. We are seeing a great project, as the shadow minister mentioned, that will be completed under this government at Nyngan. I have to commend the proponents of that, and I also have to commend the local community for not only what they have done in supporting that project but also being part of that project. It has already begun. I think the first panels have been erected. With the other large-scale solar project being put in place at Broken Hill, we will see a second scheme.

These schemes are being deliberately put in the outback not just because it is great sunshine but because they are on the end of the grid. At the end of the grid is where solar really shines—excuse the pun—where solar really comes into its own, because the cost of electricity is not just in the generation. It is in the transportation to where it is consumed. So, when you are on the end of the grid, you are paying huge transportation cost. It just makes sense to generate it there. As I said earlier, we are looking at where the next generation of batteries will come from—and I know from visiting companies like RedFlow in Brisbane, who are working on some great technology—that battery storage is just around the corner.

There are a number of parts of this bill that are important, but one part is, of course, the 100 per cent exemption that will come under these amendments to energy intensive trade exposed industries. We are keen to make sure that those industries, which face international competition for their products and from countries that do not do anything like what we do in terms of renewable energy, are still competitive. The shadow minister did mention the challenge that faces the renewable energy industry, and the challenge to meet this target is significant. They have to build in the next five years as much as has been built in the last 15. The low-hanging fruit, in terms of the good sites for wind, in particular, have gone, and the alternate technologies to wind, unfortunately, have not come to fruition, although Carnegie Wave Energy in Western Australia have done a fantastic job. They have always been modest in their claims. In terms of what they have achieved, whilst they have exceeded what they expected to do, it is still modest and a generation capacity of more than four or five megawatts is still quite a challenging proposition.

If we look at the challenge for the wind energy industry as the industry that will fill this target, they have plenty to get busy with. The challenge is that, if they do not meet that target, the scheme defaults. It has always been the coalition's fear that, if the scheme defaults, the cost of the renewable energy credit will rise threefold—or twofold now because it has obviously lifted a bit in recent times since it has become clear that the scheme is sustainable. But the price of a RET will go to $93, and that is a high cost to consumers which will flow back into their household bills and into the industry bills. So we have asked that the Clean Energy Regulator make an annual statement to parliament in terms of the impact and potential impact of the renewable energy scheme on the cost of electricity. We look forward, during those reports, to a bipartisan approach from the opposition in terms of making sure that the adjustments can be made quickly and effectively to not only preserve the scheme but also protect households from extraordinary costs, or unreasonable costs, from the new renewable energy scheme.

In conclusion, I was disappointed that the shadow minister persisted in this idea that the coalition's position on wood waste was something new. Our note takers will show quite categorically that this was raised not only at the first meeting but at several meetings and as recently as January. It is a good idea because the wood just lies on the floor of the forest. If he was the minister for science, he would know that it still emits CO2 as it decays. I commend the bill to the House.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

The minister, interestingly, made the comment that someone must pay. Indeed, someone must pay. In his analysis he was talking about the cost of renewable energy and what that did to electricity prices. I think we should be looking at who, in fact, will be paying if we do not move towards renewable energy and if we do not move towards the reduction of emissions. The minister seems to be living in some sort of fool's paradise where he believes we can continue coal-fired power generation without there being a cost to the community. The cost might not be appearing immediately on your power bills, but it is a cost that is going to accrue to this community over the coming generations.

We are already seeing how these costs are playing out with climate change. We are already seeing this very real problem in the north of Australia where increasing weather volatility is leading to a massive increase in insurance payments—a massive increase in insurance payments that far exceeds the increase in energy costs that comes from having a renewable energy industry. Indeed, we all know that we have to go through this period where we do support renewable energy technology to ensure that we give it an ability to reach a stage of development where it can be competitive in its own right. When we talk about who is going to pay, we must look at the price being paid by our community—both economically and in terms of health—from climate change, and recognise that we need to make this strategic investment now so that we will have a source of energy that will enable us to deal with climate change and, in the long run, bring the cost of energy down. It is very much a question of making a strategic investment now.

The quite extraordinary thing is that countries around the world are recognising this as an investment that must be made. When we look at the United States, their last federal budget alone had $1.9 billion injected into the Office of Energy Efficiency and Renewable Energy to support new projects, to engage in the development, research and early commercialisation of renewable energy and energy efficiency projects. What have we done here in Australia to ARENA—the equivalent organisation? ARENA is an excellent organisation with a fantastic remit to take everything through from pure research to early commercialisation and to providing actual implementation funding. We have seen $434 million pulled out of its budget over the next 10 years. Indeed, had the government had their way, ARENA would have disappeared altogether. But, fortunately, through the work of the Senate, we were able to see that ARENA has been kept on life support. This year it will have a very modest $89 million to invest in renewable energy projects. These are very important for us to ensure that we have an industry.

The fundamental philosophical problem of this government is that it thinks that somehow or other you can create those 21st century industries without there being active engagement of government and that all you have to do is create a small government and a small business environment and somehow or other we are going to see the florescence of all these new technologies. As I say, you can see from the investment in research and in early commercialisation that is going on in countries around the world, including in countries like the United States, that they understand that this is not true. It is not true in any of the 21st century industries and it is certainly not true in the renewable energy space.

We need this architecture. The renewable energy target is part of a composite architecture that was put in place that included a price on carbon and the establishment of the Australian Renewable Energy Agency and the Clean Energy Finance Corporation, which was able to move in where venture capital was, at this particular point of time, too reluctant to go. We need that whole suite of projects, that suite of climate change infrastructure, in order for us to remain competitive.

The minister made an extraordinary statement. He said that when they came into government the RET was on the rocks. No; when they came into government they cut down the lighthouse, threw a hand grenade into the renewable energy target and commissioned a well-known climate sceptic to undertake the review of the RET. Even without their ability to change the legislation, even though the legislation remained in place, setting the large-scale renewable energy target at 41,000 kilowatt hours, they were, nevertheless, able to completely and utterly undermine the renewable energy target by creating this climate of uncertainty. We saw, since the announcement that they were beginning this review, with Mr Warburton in charge, until now, where we have finally landed on a compromise arrangement, that renewable energy investment fell 90 per cent in this country. So we saw a 90 per cent fall in renewable energy investment.

Global investment in renewable energy projects during the same period last year was $270.2 billion, and that is excluding large hydroelectric projects. That is 17 per cent higher than the previous year. For solar alone, it was $149 billion. Those are extraordinary figures. If we go to China, the figure was $83 billion, up 39 per cent; in Japan it was $35 million; and in India it was $7 billion. We understand that even Saudi Arabia is now making a big push into the renewable energy space.

It is not as though we had ever been arguing that we should not be doing something that all other countries around the world are doing, but, for some reason or other, there is a view in the government that we can just contract, we can cut down all of the architecture in place and somehow or other this industry will survive; or, I suspect, more importantly, they do not care whether this industry survives. Indeed, they have probably been the beneficiaries of considerable largess from the fossil fuel companies and they are quite happy with the fact that we have seen a resurgence in brown coal use. Just as everyone around the world is trying to wean themselves off it, we are happy, apparently, in Australia to—as Colin Barnett has done in Western Australia—reopen Australia's dirtiest coal fired power station and to see a renaissance in brown coal being used for electricity generation in Victoria. It is an extraordinary set of circumstances, and the government would think that this is an acceptable outcome and that this is the type of outcome that we wanted.

We strongly supported the work that our shadow minister did in negotiating this compromise. It is absolutely critical that we preserve what we can of the complex architecture that we put in place to deal with climate change; it is absolutely critical that we get renewable energy investment back on track. It is certainly quite clear, as the shadow minister has said, given that they have been cutting down the lighthouse and creating enormous instability and loss of investment over the last 18 months, that it is now going to be virtually impossible to get to 41,000 gigawatt hours. Again, that is not because it was an unreasonable target in the first instance but because they have come in and sabotaged the investment that would have allowed us to achieve that.

We have been prepared to work with the government to come up with a compromise on this—not one that we are entirely happy with, but we take responsibility for ensuring that we need to put this industry back together and we need to get those investments flowing. Certainly, from talking to the renewable energy companies in Western Australia, they have been very keen for us to reach this compromise—companies like WestGen, who have a whole raft of relatively small-scale projects, such as 10-megawatt style projects—so that these projects in the pipeline can get underway, once the uncertainty that has been created by the government has been dealt with.

The long-term job opportunities are there. In Western Australia, we have the prospect of a new vanadium mine. This is a very high-quality, high-grade vanadium mine just south of Meekatharra. That project has an inferred resource of 125 million tonnes of very high-grade vanadium. Vanadium has extraordinary possibilities for renewable energy storage. The vanadium redox battery, which is a very high-density storage battery, is being developed through the University of New South Wales. It gives us the opportunity to be world beaters in this energy storage space, which is so important for the sustainability of renewable energy. We are hoping that, with this Yellow Rock Resources vanadium mine, we can build on that and develop the battery production within Western Australia. We have to think about this. This is a 21st century industry. This is a sunrise industry and we must do all that we can to ensure that we have the strategic investment in Australia, in Western Australia, that is going to ensure that we are technology makers, not just technology takers. The prospect of developing this high-grade vanadium mine in Meekatharra, with a battery storage production facility, is extraordinarily exciting.

Again, we must think. If we are just focusing on the immediate electricity price, we are losing the battle. We must be creating those opportunities for the 21st century. We have to be up there, matching what is happening in the United States, China and India, and providing that capacity for our renewable energy industry to develop, prosper and be competitive in the world.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Link to this | Hansard source

Today I am pleased to be able to speak on the Renewable Energy (Electricity) Amendment Bill 2015. It is a bill that represents a balanced approach and that will implement changes to the renewable energy target to better reflect market conditions and allow sustainable growth in both small- and large-scale renewable energy in this country.

This is a government that balances the needs of the environment with the needs of the Australian public. This is a government that is looking to the future and recognising the importance of using renewable energy to power our lives. This bill will do just that. It will lead to more than 23½ per cent—not 20 per cent but 23½ per cent—of Australia's electricity being sourced from renewable energy, by 2020.

What is a RET? To break it down, the RET allows renewable energy power stations and owners of small-scale renewable energy systems to create certificates for each megawatt hour of eligible renewable electricity they produce. Electricity retailers and other liable entities need to purchase certificates created by renewable energy generators such as wind farms, solar farms, hydro-electric power stations, rooftop solar panels and solar hot-water systems.

Certificates are then surrendered annually to the regulator to demonstrate compliance with the RET and avoid shortfall charges. This creates a market which provides financial incentives to increase the generation of renewable electricity. The RET encourages the use of electricity from renewable sources, it reduces greenhouse gas emissions in the electricity sector and it ensures that renewable energy sources are ecologically sustainable.

The RET was the brainchild of the Howard government and was designed way back in 2001. Then, in 2010, it was hijacked by the Labor government and was expanded to ensure that, by 2020, at least 20 per cent of Australia's electricity comes from renewable sources. To achieve this, annual targets were increased to peak at 45,000 GWh in 2020.

Since the beginning of 2011, the RET has separately supported large-scale renewable electricity projects, such as wind and solar farms, and installations of small-scale renewable energy systems such as rooftop solar that we see on so many homes across the country. The annual targets under the LRET were amended to rise to 41,000 GWh in 2020.

Many of the good people in my electorate of Paterson already know the benefits of using renewable energy. There are homes across my electorate, like so many others, with solar panels scattered across their roofs, using renewable energy in their homes on a daily basis. Others choose to opt for renewable energy options when it comes time to deciding on their electricity or utilities provider. As a community and as a government we are focusing our attention on renewable energy and delivering outcomes.

My region is also home to the CSIRO Energy Centre where top-class research is undertaken into solar and renewable energy. In April last year I opened a $1.7 million solar thermal demonstration plant at the city of Newcastle's West Wallsend pool. A first-of-kind demonstration plant generates 30 kilowatts of electrical output and 150 kilowatts of heat for the swimming pool.

The plant combines a solar thermal field with new heat engine technology developed by the University of Newcastle and the Newcastle Institute for Energy and Resources. The Australian-designed GRANEX heat engine increases the efficiency of solar thermal energy, which means more electricity can be generated from the solar thermal field. The application of this technology could particularly benefit remote and regional communities and businesses, as well as have the potential for export sales. It is a great example of the world-leading renewable technology being developed in Australia.

So why is this renewable energy amending legislation so important? When my colleague Minister Hunt read this bill for the second time last month he outlined how it addresses problems that emerged more than three years ago with the renewable energy target. There was a significant drop in electricity demand, which occurred following the global financial crisis, which coincided with the closure of energy-intensive manufacturing plants, spelling disaster for wholesale electricity prices. And there were the changes to the renewable energy target, introduced by the Rudd government, and the effects of the phantom credit bank that are still being felt today.

This bill addresses those problems in a number of ways. Firstly, it adjusts the Large-scale Renewable Energy Target, LRET, to 33,000 gigawatt hours in 2020. It will increase the partial exemptions for all emissions-intensive trade-exposed activities to full exemptions. It will reinstate biomass from native forest wood waste as an eligible source of renewable energy. And it will remove the requirement for Labor's legislated biennial reviews of the RET.

When it comes to sustainable growth in the renewable energy sector, it is important that we have bipartisan support and our agreement with Labor is to legislate a Large-scale Renewable Energy Target of 33,000 gigawatt hours by 2020. This will result in more than 23 per cent of Australia's electricity being derived from renewable sources by 2020. It means cleaner, greener energy for our communities and our environment.

We will be working co-operatively with the opposition on a bipartisan basis to resolve any of the issues which may arise with the operation of the RET through to 2020. The agreement this government has reached with Labor will ensure that renewables continue to play an important role in Australia's energy mix in the future.

One of the things I like about this bill is that there will be no change to household solar in the Small-scale Renewable Energy Scheme. It means those who use solar or who have invested in solar or are thinking about doing so should continue to do so. For renewable energy on a small household scale, this is great legislation. Solar will be a winner, with significant new investment in small- and large-scale solar expected.

The bill will reduce the Large-scale Renewable Energy Target from 41,000 gigawatt hours in 2020 to 33,000 gigawatt hours in 2020. The reduction in the Large-scale Renewable Energy Target from 41,000 gigawatt hours to 33,000 gigawatt hours will result in 830 to 1,000 fewer wind turbines. This target is separate from the 850 gigawatt hours that is to come from waste coalmine gas generation each year until 2020 under pre-existing transitional arrangements.

As highlighted in our energy white paper, Australia has an oversupply of generation capacity and some of that is aged. From 2009-10 to 2013-14, electricity demand has fallen by about 1.7 per cent per year on average. This is due to many factors, including declining activity in the industrial sector, increasing energy efficiency and strong growth in rooftop solar PV systems which has reduced demand for electricity sourced from the grid.

This government welcomes a diverse energy mix in Australia but we also recognise that circumstances have changed since the 41,000 gigawatt hours target was set. This new target of 33,000 gigawatt hours directly addresses these issues. It represents a sound balance between the need to continue to diversify Australia's portfolio of electricity generation assets, the need to encourage investment in renewables while also responding to market conditions, the need to reduce emissions in the electricity sector in a cost-effective way and the need to keep electricity prices down for consumers. Most importantly, this new target of 33,000 gigawatt hours by 2020 is achievable. The bill will also give the renewable energy industry the certainty it needs to grow. In order to do that, there will not be a review of the Renewable Energy Target until 2020. Instead, the Clean Energy Regulator will provide an annual statement to the parliament on how the scheme is tracking towards the 2020 target and any impact the RET is having on electricity prices.

I have outlined in the past how this is a government that protects industry and jobs. The renewable energy industry and the employment it provides for hardworking Australians is no exception. However, in order to protect the industry and jobs, there will need to be a 100 per cent exemption for emissions-intensive and trade-exposed industries from costs associated with the RET—including Tomago Aluminium in my electorate. This bill will increase support for all emissions-intensive and trade-exposed activities to a full exemption from all RET costs—that is, the costs of the original target as well as the costs of the expanded target. A full exemption will protect jobs in these industries and ensure they remain competitive.

The reduction in the direct costs of the RET resulting from the lower Large-scale Renewable Energy Target will more than offset the impact on other electricity users of the increase in assistance for emissions-intensive and trade-exposed activities. The bill is about protecting jobs in the emissions-intensive and trade-exposed sectors by reducing their costs. It does not matter whether it is aluminium, zinc, silica, cement clicker, copper, newsprint, packaging, industrial paper and many other industries—this bill is designed to protect those jobs. So this bill is to be supported.

One of the other issues the minister raised was the need to reinstate biomass from native forest wood waste as an active eligible source of renewable energy. Renewable energy is diverse and there are many, many, many sources. This government is committed to the inclusion of wood waste as an eligible form of renewable energy generation and this will be included in legislation. Native forest wood waste was in place as an eligible source of renewable energy under Labor's own legislation until November 2011. As my colleague Minister Hunt told ABC Radio a fortnight ago, if wood waste is going to lie on the floor of a forest to rot and create methane, or if it is going to be burnt and create CO2, then surely it is much better to make use of it, to turn it into renewable energy and reduce emissions as a consequence. It is not just a theory, it is the practice. That is why Labor previously legislated and why the European Union in many places incorporates biomass. Similarly, it is why the Climate Change Authority has also recommended that it be reinstated in the original form as legislated by the Labor Party itself.

Consistent with our election commitment, this bill reinstates native forest wood waste as an eligible source of renewable energy under the RET, basing eligibility on exactly the same conditions that were previously in place under the ALP. One of the objectives of the RET is to support additional renewable generation that is ecologically sustainable. We are reinstating native forest wood waste as an eligible renewable energy source because there is no evidence that its eligibility leads to unsustainable logging or has a negative impact on Australia's biodiversity. In all cases, the supply of native forest wood waste is subject to Commonwealth and state or territory planning and environmental approval processes, whether within or separate from the Regional Forest Agreement frameworks. Burning wood waste for electricity generation is more beneficial to the environment than burning the waste alone or simply allowing it to decompose. Its inclusion as an eligible energy source is another contribution to the target. Reinstatement of native forest wood waste as an eligible fuel source represents a return to common sense.

When it comes to the environment, this government has the runs on the board. We have the Green Army out across the country revegetating, repairing and improving hundreds of areas—a magnificent bunch of young Australians working hard while gaining practical environmental experience and training. This government is returning water to the Murray-Darling Basin to ensure the survival of the country's most important food bowl and to see habitats and wildlife restored. And we have just had the World Heritage Centre praise the significant and unprecedented work undertaken by Australia to protect the Great Barrier Reef and make it clear the reef will not be listed as 'in danger'.

This bill is consistent with the government's conviction that policy decisions must be based on sound economic principles and real-world experience together with outcomes. What we want to do is encourage efficiency, competitiveness and better outcomes for electricity consumers and Australian families. This bill reflects changes which have occurred in the electricity market and will allow for sustainable growth in small- and large-scale renewable energy. This bill will provide certainty to the renewable energy industry and its jobs, and it will encourage further investment while helping Australia reach our emissions targets. This is a good deal and this bill should be supported. I commend the bill to the House.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

The Renewable Energy (Electricity) Amendment Bill 2015 seeks to amend the 2000 act and the 2001 regulations, as well as making consequential amendments to the Climate Change Authority Act 2011. The majority of amendments reflect an agreement between the government and the opposition in order to provide certainty to an industry and to allow for investment in the sector to resume. The bill firstly reduces the large-scale renewable energy target to 33,000 gigawatt hours by 2020; it allows for the extension of full exemptions for emissions-intensive trade-exposed activities; it repeals the requirement for periodic reviews of the RET and it amends the Renewable Energy (Electricity) Regulations to reinstate native wood waste as an eligible renewable energy resource. In contributing to this debate I would like to deal with the details of the bill and the context of the debate that brings us to this point, and then to discuss some local feedback I have received on these matters.

We as a nation are particularly well placed to develop a significant renewable energy sector as we have abundant solar, wind and wave resources available to us. The opportunity to maximise these is supported by our world-class skills and the expertise that has been developed here. The previous member spoke of some of his own experiences from the Newcastle university activities, and I have to reflect on the fact that Wollongong university has also been very active in this space. These factors, which were supported by a Labor government at the time, made Australia a world leader in renewable energy. Labor has a longstanding record of support for the renewable energy sector. The record of Labor in government confirms this, with growth in homes with rooftop solar technology increasing from around 7,000 to more than 1.2 million. Wind power in Australia has tripled and the jobs in the renewable sector have also tripled. More than $18 billion was invested in wind and solar farms, hydro plants and renewable energy technology development.

The investment and jobs were a significant contribution to the national economy—as a sector it employs more than 21,000 people and attracts billions in investment. In addition to this, it was a significant contributor to reducing the carbon pollution produced by the electricity sector. Between June 2012 and June 2013 emissions from this sector fell by more than seven per cent. Internationally we are seeing nations around the world increasing their own commitments to renewable energy sources. The worldwide shift has seen an increase of 16 per cent in investments in renewable energy in 2014; in China alone, investment in renewables massively increased by 33 per cent. In 2013 Australia was ranked in the top four most attractive places to invest in renewable energy, alongside powerhouse countries such as Germany, China and the US. Sadly, we have now plummeted to 10th on that list.

For all of these reasons Labor's clean energy package had a significant emphasis on renewables, and this is why we have fought so hard against the attacks that this government has launched against this important sector since being elected. It is inconceivable that the government would actively undermine a sector that delivers jobs, attracts investment, helps households to reduce energy costs and provides a new manufacturing base to support the transition of manufacturing sectors that have been under transitional pressure. On top of all of this, it reduces Australia's carbon pollution. In the Illawarra we are at the forefront of these pressures, and across New South Wales there are 4,410 jobs in the sector—such as wind, solar, PV, solar hot water, sales and service-related jobs.

I would like to share a local story of global achievement from my backyard of Wollongong. In August 2013 a team of students from the University of Wollongong and TAFE Illawarra, named Team UOW, won first place in the solar decathlon competition in China. China was the most recent addition to the US Department of Energy Solar Decathlon, an award-winning program that challenges collegiate teams to design, build and operate solar-powered houses that are cost-effective, energy efficient and attractive. The resulting homes demonstrate to students, the public and industry that solar-powered houses are fully functional, comfortable and sustainable living spaces. The solar decathlon aims to promote collaboration in the solar industry and to facilitate innovation and adoption of solar energy and energy efficiency technologies. Solar Decathlon China was hosted by the National Energy Administration of China and the US Department of Energy, co-hosted by the Ministry of Finance and the Ministry of Housing and Urban-Rural Development, supported by the All-China Students' Federation secretariat and organised by Peking University.

The Wollongong team, I am very pleased to report again to this House, beat 19 other teams from around the world. They were the first team from Australia to successfully gain entry into a solar decathlon—indeed, they were offered places at both the China and US events. They were the first team ever in any of the competitions to demonstrate how to retrofit an existing home, and they achieved the highest ever overall score in any solar decathlon competition, scoring 957.6 of a possible 1,000 points. The team was supported and mentored by Paul Cooper from the University of Wollongong and Marty Burgess from TAFE Illawarra, and many staff, whom I acknowledge, were involved as well. The student team was led by Lloyd Niccol, who was the project manager, and the team worked under the auspices of the Wollongong University's Sustainable Buildings Research Centre, which is headed by Paul Cooper. This is a facility at the university's innovation campus that the former federal Labor government contributed $25.1 million towards. Its task is to help Australia move towards a low carbon future by making buildings more energy efficient. It will support the growth of new jobs and new skills in the broad range of careers in the building design and construction industries—innovations that can form the basis of new businesses, new industries and export opportunities. It is a strong indicator of the opportunities that a low-carbon economy can provide, and these fantastic students and their teachers, through their world-beating achievement, have proven Australians have what it takes to lead the world. It just needs a federal government with the vision and determination to make Australia a leader in this international effort.

Given the strength of the positive story of this sector, it is very reasonable to ask why we are debating a bill to reduce the renewable energy target, which underpinned the success of the renewable energy sector. In a very short time after the 2013 election, the Prime Minister broke a pre-election commitment to retain the RET at 41,000 gigawatts by 2020. This was despite the fact that the RET had enjoyed bipartisan support for a decade in this country. The initial RET legislation was introduced under the Howard government in 2001 and Labor in government expanded it in 2009 and 2010—indeed, the Prime Minister had voted in support of all those bills. Yet it quickly became apparent after the election that this was about to change, as the Prime Minister began to make statements claiming that the RET was contributing to increasing household power prices. Then, in the 2014 budget, there were direct cuts to programs such as the $600 million bucket available for solar roofs, towns and schools, which was cut to just $2 million. Added to this, the Australian Renewable Energy Agency, ARENA, had its funding cut in the 2013 MYEFO, and then in the 2014 budget it was listed for abolition.

The Prime Minister's RET review, however, injected significant uncertainty into the market and resulted in an almost complete stop to investment. The Prime Minister had claimed that renewable energy had contributed to an increase in power prices, yet even this RET review found that the existing RET of 41,000 gigawatts would actually put downward pressure on household power prices in the medium to long term, was driving investment in the sector and was also reducing Australia's carbon pollution and creating jobs. Despite these findings, the panel, hand-picked by the Prime Minister, recommended either abolishing the RET altogether or cutting it significantly, and so we saw the Prime Minister opt to try to cut the RET by more than 40 per cent.

The bipartisanship that had supported the renewable energy sector for more than a decade was shattered. Labor understood that action needed to be taken to give the industry the certainty it needed to attract investors in major projects, but we were not willing to do a deal that would see the industry ruined. Labor has been guided in this process by advice directly from the industry on what would be best for them. The result is an agreement with the government that will see around 25 per cent of Australia's energy generation produced from renewable energy sources by 2020. The Clean Energy Council predicts the revised target of 33,000 gigawatts will drive around $40.4 billion in investment and create more than 15,000 jobs. Labor's negotiation principles have contributed to some very important outcomes: firstly, no change to the small-scale solar scheme, which includes rooftop solar and solar panels for small businesses such as nursing homes; secondly, full exemption for emissions intensive trade industries, which relieves some pressure on those industries that are enduring downturns and job cuts; and, thirdly, the removal of two-yearly reviews to provide some of the long-term certainty that the industry so desperately needs in order to survive and thrive.

The issue of support for solar has been raised with me by a local constituent. Indeed, the national director of the organisation Solar Citizens, Claire O'Rourke, lives in my electorate and she came to speak to me about these very issues just last month. Claire briefed me on their campaign 'Stand up for solar'. She made the point that rooftop solar is a very important issue to an increasing number of Australian families and households. In 2007 there were around 8,000 solar photovoltaic systems installed on homes, but now there are more than 1.3 million Australian homes powered by solar. It is clear to me that the importance of solar energy to many local householders in my area is a very real issue for them, and I believe that Labor's role in this process of reaching an agreement to preserve the renewable energy sector is an important one in contributing to a strong future for technologies such as household solar photovoltaic systems. Indeed, renewable energy has a strong future under Labor. We have made it clear that, if we are elected at the next federal election, we will use the 33,000-gigawatt target as a floor to build upon and we will consult with the industry and finance sectors to develop an ambitious renewable energy policy beyond 2020. Labor know that renewable energy is the way of the future and we understand that Australia needs to transition to a clean energy economy—we have both the will and the ambition to see this happen.

There is one aspect of the bill that we do not support, and that is the inclusion of the native wood waste biomass in the RET. We do not believe that burning native forests for energy is either clean or renewable and we simply do not see a case for its inclusion in the RET. For those reasons, I support the shadow minister's proposed amendments when this bill is considered in detail.

It is clear across all our communities that the issue of the renewable energy future for Australia is one that plays out at the family and household level—indeed, my own parents have had a solar system on the house for as long as I can remember—and many, many households are looking for ways to find a more sustainable way to provide energy into their homes, particularly as they increasingly want to find more environmentally friendly options. I think that is a reflection of why we have seen across, I am sure, all of our electorates such a significant uptake of the solar systems, both hot-water systems and photovoltaic systems, that provide energy into the household. More than that, it is a good opportunity for places like our schools, community centres and nursing homes to put their own budgets on a more sustainable footing by having these smaller scale systems in place for them as well. Then it plays out, of course, from so many of our communities into our industry sectors. For an area like the Illawarra, as we see significant transition going on, the opportunity to build on the research and development being done at places like our university and TAFE and to build new industries, new employers and new jobs is significantly important.

For all those reasons, across all of our communities we have seen a very strong and determined support for the renewable energy sector, and people would expect us to be ensuring that the policy settings are in place to make that continue into the future. Of course, also there is increasingly an important responsibility on us for future generations to find a more renewable based economy so that we can do our bit in reducing carbon pollution in the world's circumstances.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, and the honourable member will have leave, if she wishes, to continue her remarks at a later hour. Are there any statements from honourable members?