Andrew Broad (Mallee, National Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on the Environment and Energy, I present the committee report entitled Powering our future: inquiry into modernising Australia's electricity grid, together with the minutes of proceedings.

Report made a parliamentary paper in accordance with standing order 39(e).

Throughout 2017 the Standing Committee on the Environment and Energy examined the important issues facing Australia's electricity grid. Not only are we experiencing a changing mix in the source of the electricity generated but consumer preferences are also changing. The modernising of the electricity grid in Australia provides an opportunity to reconsider what the system could seek to achieve and how the different priorities of stakeholders could be balanced. Four key issues under consideration are the ongoing security of the system, the reliability of the system in meeting customer demand, emissions reduction and affordability.

Industry experts, energy users, electricity distributors and regulators all gave evidence to the committee. What was striking was the committee heard the same evidence from each witness—the importance of a consensus approach to energy policy in Australia. The committee took this evidence about consensus very seriously and applied it to all the inquiry work. This report reflects the absolute best efforts of the members of this committee to find common ground when it comes to delivering a modern electricity grid to ensure the secure and reliable delivery of electricity whilst balancing emissions reduction considerations and the important issue of affordability.

Of course, as members of parliament representing different constituencies, many of us have different views which we had an opportunity to test and discuss throughout the inquiry. Yet this report is the unanimous report of the committee and the fact that it is unanimous is a source of personal pride to me and is testament to the professionalism and goodwill of my colleagues. The collegiate spirit that was fostered in this committee enabled us to consider the evidence and prepare a report in a manner which enabled us to put consensus and pragmatism first.

The witnesses spoke, telling us of the energy industry's need for certainty. The committee listened, and we have delivered a comprehensive consensus-based report that provides recommendations which will enable the grid to be modernised in a manner which provides the certainty the stakeholders expressly requested. Four members of the committee, including me and the deputy chair, undertook a delegation to visit parts of Germany and the United States. Benefiting from a comprehensive program, we learnt more about current electricity markets and policy landscapes in each country. We collected evidence from visits to the mainland National Electricity Market states, submissions and our visits overseas. We gained genuine insights into how we can take a grid that was built for very different conditions in the earlier part of the 20th century and transition that same grid into the 21st century, and, in so doing, futureproof it.

There is space for big thinking when it comes to modernising the electricity grid. Additional interconnectors in places such as northern Tasmania could provide a platform for truly innovative practices such as wind farms taking full advantage of the Roaring Forties winds. A Mallee interconnector, which could be linked into Snowy Hydro, could capture the advantage of east-west solar resources.

I thank my fellow committee members for their collegiate and productive approach when considering the issues raised during the course of the inquiry. The committee was fortunate in the assistance it received from submission makers and witnesses, who provided a strong evidence base which informed our deliberations. I would also like to the thank the staff of the secretariat for their assistance with our work. They are in the chamber here today. They worked very hard.

This report canvasses important issues and makes timely recommendations that seek to ensure Australia is not left behind in the electricity revolution that is occurring all around us. I call on all my colleagues in this place to take heed of this report and the evidence of witnesses everywhere. This evidence was a call to arms: abandon partisan politics and unite to deliver the certainty the energy sector requires in order to deliver secure, reliable electricity with lower emissions and—of paramount importance—that is affordable to all. I'm very optimistic for the future and what can be done. Our electricity grid will transition, and this report will form a body of work that will assist in that transition over the next 20 years. I thank my colleagues for their hard work and I commend this report to the House.

Pat Conroy (Shortland, Australian Labor Party, Shadow Assistant Minister for Infrastructure) Share this | Link to this | Hansard source

I want to start by thanking the secretariat for the brilliant job they've done in putting this report together and by complimenting the chair of the committee, the member for Mallee, and all the members on what is a very strong report. In the energy policy arena, which is probably the most heated part of the national policy debate, a consensus was achieved across four parties. It's a rare issue that gets the member for Mallee, the member for Hughes, the member for Melbourne and me to agree on anything, and this report recognises that and represents that. I think it signals a way forward on the energy debate in this country.

There are a stack of recommendations, 23, and I won't go through all of them, but I want to highlight quickly seven really important recommendations, starting with the first one, about the drastic need, the desperate need, to resolve the uncertainty in energy policy that has bedevilled this country since 2009. The report makes reference to calculations by the Energy Council, the peak body for generators, which says that the effect of the inability of this place—the House of Representatives and the Senate—to agree on a settled energy policy since 2009 is the equivalent of a $50-a-tonne carbon price. That is because people in this place cannot agree on a policy that people can invest in for the next 40 years. It is essential that we resolve that uncertainty in energy policy and get an enduring mechanism to tackle our greenhouse gas abatement requirements.

Recommendation 4 talks about speeding up rule making. Recommendation 5 talks about greater parliamentary oversight of the Finkel recommendations. There are recommendations around industry demand and responses around energy efficiency which will be essential to reduce demand in the sector while providing a revenue stream for our manufacturers. There are recommendations around AEMO studies into more interconnectors, which the member for Mallee has referred to. There is a strong recommendation around reviewing the RIT-T test, which is very short sighted in its regulatory oversight for new investment in transmission infrastructure. The recommendation I'm particularly passionate about, besides the uncertainty recommendation, is recommendation 16, which is that AEMO consider establishing renewable energy zones. This is essential if we have to decarbonise our grid. We need serious investment in renewable energy zones to take advantage of the greatest solar radiation in the world and great wind resources, but to do that we need adequate planning and adequate investment in the grid, and AEMO has a lead role in this. These are really important recommendations.

There is some really important commentary around system security. Our review found that renewable energy can provide all the security services that the grid needs around frequency control, ancillary services and inertia responses if there is adequate planning and investment. It is not that these sources of generation can't provide these services; it's that they've never been called upon to do that. With adequate planning and a good regulatory framework, they can provide them.

The final thing in this report which is really important is the commentary around geographic diversity. We are an energy island, and some people say that, because we are an energy island, we can't invest in renewable energy because we don't have nuclear from France to draw upon or hydro from Canada to draw upon—as you can if you're in New York. But our geographic diversity and the sheer size of the land mass in this country means that that diversity provides reliability, north and south and east and west. If we invest in renewable energy with good planning, we can have solar going in western Queensland backed up by wind and wave power in Tasmania and great support in South Australia. These are things that can be provided—they occur in other countries—if we do the planning right.

I want to thank the Speaker personally for approving overseas travel for this committee. Often this travel is portrayed as a junket, but I, as one of the four members of the committee who had the privilege of going to Germany and the United States, learned so, so much about the energy infrastructure and approach in those countries, and it informed this committee report. I can absolutely assure you that this report would not be as strong, credible and well researched as it is now if we hadn't had that trip, so thank you very much, Speaker.

I commend this report to the House, and I would recommend that everyone who is interested in energy policy have a read of it with an open mind, because it does chart a way forward.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The time allotted for statements on this report has expired. Does the member for Mallee wish to move a motion in connection with the report to enable it to be debated on a later occasion?

Andrew Broad (Mallee, National Party) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Tony Smith (Speaker) Share this | Link to this | Hansard source

In accordance with standing order 39, the debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.