Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Tonight I would like to share with the House some great news. There is a report in today's Australian by Matt Chambers, the resources reporter, under the headline 'Coal can't compete with renewables'. It quotes the chief of AGL Energy—the same company that has just put in a 20 per cent price increase for their New South Wales customers—and says:

AGL Energy chief …, who runs one of the nation's biggest coal-fired power businesses, says coal cannot compete with renewables, where prices are falling and which he sees dominating baseload power.

It quotes him as saying:

"Technology is driving this — we don't see any baseload other than renewables."

…   …   …

"You'll hear people say, 'no coal can compete'," …

"But I've looked at the numbers and come to decisions (that) are going to direct billions of dollars of investment. I've looked at it pretty hard."

This is wonderful news, because what that means, if coal truly cannot compete with renewables, is that we can simply finish the renewable energy target today. We do not need it. If renewables are truly cheaper, why do we need to subsidise them? We can cut all the subsidies back to zero. We can finish the subsidised feed-in tariffs. We can abandon any thought of carbon taxes in the future because of this wonderful news. The Finkel report, because of this announcement by AGL, is now completely redundant, because renewables, according to AGL, are cheaper than coal, and coal cannot compete.

If we do a reverse auction to get more power in the grid to address the shortages that we are likely to have in South Australia, New South Wales and Victoria this summer, AGL should be all in favour of that, because that reverse auction would be won by renewables with storage. It is also great news for Australia's international competitiveness, because we see around the world they are still building something like 1,000 coal-fired power stations. These nations are making investments that are wasting billions and billions of their capital. This will put Australia at a great competitive advantage.

On the Paris Agreement, we can go back to Paris being known as the city of love. But it may be bad news for the Iranians, because, under the Paris Agreement, their cuts to emissions were based on them receiving international support of US$35 billion. The money that we would have had to tip into that UN climate fund will no longer have to be part of the US$35 billion that the Iranians want.

The Americans are also wasting their valuable capital. We see in the report that, in the US, on the latest figures, year to date, their coal production has increased 17.6 per cent. This is a mal-investment in the US. And their coal consumption, on a year-to-year basis has increased five per cent on the latest figures. So there is more and more wonderful news in the short term.

AGL have seen their share price, their market capitalisation, increase about $7 billion or $8 billion over the last two years. If now coal can no longer compete with renewables, perhaps they can pay back to the government all the money that they are receiving under the renewable energy target, from the RETs. They could even perhaps donate it to charity, because it is clear from the statement of their chief executive that they no longer need those generous subsidies that the government gives.

But it may only be short-term good news, because our nation's competitive advantage for decades has been in low-cost coal-fired power stations. If it is true that coal is no longer competitive with renewables, and the renewables that we are talking about are Chinese solar panels and Chinese wind farms, our nation no longer has an advantage in energy. It no longer has a competitive advantage, because every nation is free to buy those same solar panels. So we know the future—that we can simply cancel the renewable energy target today based on that announcement— (Time expired)