Bridget Archer (Bass, Liberal Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) acknowledges that under the Government, we have seen:

(a) a record eight consecutive quarters of year-on-year consumer price index reductions in retail electricity prices; and

(b) wholesale electricity prices fall for 17 months in a row; and

(2) welcomes the Government's strong action to ensure that Australian households and businesses have access to affordable, reliable and secure electricity.

The government is focusing on delivering affordable, reliable and secure electricity for Australian households and businesses while at the same time reducing emissions. This is central to our ongoing economic recovery and will support jobs, productivity and economic growth. We are investing $215.4 million in the delivery of affordable, reliable power across Australia. This plan is working. We have seen a record nine consecutive quarters of year-on-year CPI reductions in retail electricity prices, with household electricity costs falling by 11. 2 per cent compared to the same time last year. We have seen wholesale electricity prices fall for 19 months in a row from when we introduced the big-stick legislation in September 2019 through to the end of March this year. Quarterly prices are now at their lowest level in nine years, averaging $34 per megawatt hour across the National Electricity Market in the March quarter. That's more than 48 per cent lower than the same quarter in 2020, 74 per cent lower than in 2019 and the lowest March quarter wholesale price since 2012. In comparison, under Labor we saw 23 consecutive quarters of year-on-year increases. Our default market offer reforms mean that an average residential customer that was on the highest standing offers prior to the introduction of the DMO could now be up to $780 a year better off, while average small-business customers could be up to $3,105 a year better off.

In my home state of Tasmania, energy customers look set to see a four per cent drop in their electricity bills over the next three years, paying $70 less in 2023 than today. The Australian Energy Market Commission Residential electricity price trends report released at the end of 2020 shows that lower wholesale and environmental costs are behind the shift. Ninety eight per cent of Tasmanians are on regulated standing offers set each year by the Office of the Tasmanian Economic Regulator, with a cap set by the state government reflecting the Hobart consumer price index. The report showed that the costs were falling across two drivers of Tasmanian consumer bills over the period from the financial year 2020 to 2023. Wholesale costs are expected to go down by nearly 19 per cent or about $140 over the reporting period. This is an annual average drop of 6.6 per cent and is driven by new generation supply entering the National Electricity Market and lower gas prices. Environmental costs are also expected to drop by 11 per cent, or nearly $20, an annual average decrease of 3.8 per cent. This result is due to a decrease in large scale Renewable Energy Target costs as more renewable generation comes online.

Falls in electricity prices and ensuring our communities have access to reliable power sources is significantly helped by investment into areas such as renewable power. In our state, the Marinus Link and Battery of the Nation pumped hydro projects are great examples of what federal government investment can do through the $1 billion Grid Reliability Fund. This fund will not only ensure that our nation's world-leading deployment of renewables is integrated and backed up; it's ensuring jobs for Australian workers, lower emissions, a more reliable and secure energy market and lower prices for consumers.

Marinus Link will provide a second Bass interconnector between Tasmania and Victoria, which will increase energy exchange throughout the National Electricity Market as Australia continues to transition to cleaner energy. The project has also been assessed to be commercially viable and could deliver a $1 billion boost to Tasmania's economy through construction and operation. It's an incredible opportunity for our state as we look to invest in technologies to create a cleaner, sustainable energy market which will also benefit mainland energy users.

Battery of the Nation is a Hydro Tasmania project that's investigating and building our island's capacity as a hydro battery. It's about making better use of existing hydro power and power stations, while enhancing our ability to support the National Electricity Market with new infrastructure like pumped hydro power stations. Battery of the Nation is a key part of the solution needed to support a national energy market in transition. It will deliver multiple benefits to our state, giving Tasmanians the lowest possible power prices, creating much-needed jobs in regional areas and bringing broad economic benefit to Tasmania. This will ensure a safe, reliable, low-cost energy supply for all Tasmanians and thousands of megawatts of clean power to the mainland for a sustainable future we can all enjoy. On this side of the House, we're delivering the affordable, reliable power that Australians rely on.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

Is the motion seconded?

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Link to this | Hansard source

This motion proves how out of touch the Morrison government is with the lives of Australian households and small businesses. In this motion the government are congratulating themselves, saying that the Australian people should be grateful to them for a reduction in electricity prices. They are congratulating themselves, claiming that Australian households' and small businesses' electricity costs—

Hon. Members:

Honourable members interjecting—

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

The member will pause for a moment. I'm not going to tolerate that level of noise while somebody is trying to speak to the chamber.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Link to this | Hansard source

That's not what households and small businesses that I talk to are telling me. For the last eight years, small businesses' and consumers' electricity costs have kept going up and up. Australia now has some of the highest electricity costs in the world. Couple that with the fact that, for households, wages aren't increasing, and there is pressure on family budgets associated with the cost of child care, health insurance and transport, particularly with all the tolls in New South Wales. Small businesses are struggling, with electricity costs being the major reason they are struggling.

Why is all this happening? It's happening because the Abbott-Turnbull-Morrison government has no plan for the electricity industry. They've tried to develop one—they've tried on several occasions—but they keep getting knocked off. Remember the National Energy Guarantee or the big stick policies? All of those have hit the fence, like many of the prime ministers that tried to introduce them. Electricity assets are owned by the private sector, who have not been investing in new generation assets due to a lack of certainty from this government about the policy direction it was going to put in place for the nation.

In recent years the private sector has basically said: 'We're not going to wait for government anymore; they are completely hopeless. We're just going to invest ourselves.' They've started investing in renewable energy projects—in solar, in wind, in hydrogen and in batteries. Why are they doing this? Because the people that invest in these companies, that own these companies, know that fossil fuels are a bad investment. They know that fossil fuels are the way of the past and that the future is in technology and in renewables, to produce more energy more cheaply. And that is what is occurring. That's why you're seeing many more solar and wind farm projects getting up, but no-one is investing in fossil fuel technology, because it's becoming outdated technology. The private sector also knows that investing in fossil fuels is a very risky investment now. Firstly, financial institutions won't finance them, and, secondly, government regulation is reducing the use of fossil fuels, to meet international commitments to reduce carbon pollution. So governments are positioning themselves to take advantage of the shift to new technology and to renewable energy.

The question for this government is: How do we position Australia to take advantage of the shift in international energy markets that's occurring to renewables? How do we make a gradual shift to renewable energy to encourage investment in this new technology that is renewable to create jobs? This is why Labor has instituted a policy of new energy apprenticeships to provide a pathway for training in new skills and new technology that will be the jobs of the future. How do we reduce electricity and other energy costs? The way to do that is to invest in the cheapest technology possible, and that cheap technology is in renewables. But this government continues to ignore that trend internationally and swim against the tide. We've seen that with their recent announcement of an investment in a new gas-fired plant at Kurri Kurri. The government is going to build an asset that the private sector says there's no need for. If there were a need for this, don't you think that the private sector would build it? Of course they would. But they're not going to because there's no need for it. This is going to be a $600 million investment by this government that will be used two per cent of the time. And this government want to congratulate themselves for saying that they've reduced the electricity costs when their lack of a plan has, in reality, meant that electricity prices for small businesses in particular and for households have just kept going up and up and up. Because the government don't have a plan and because the government ignore the reality, Australians are continuing to pay too much for their electricity.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

The question before the chair is that the motion be agreed to. Before the member for Grey takes his time to speak, I will again reiterate: I'm not going to have members be shouted down by both sides of the chamber having a conversation with each other. The member for Grey.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I'm amazed by the last speaker's comments, which, on the one hand are decrying the lack of government policy and the lack of investment in electricity and then on the other hand shouting from the rooftops how magnificent it is that all these people are investing in renewable electricity.

Sometimes we learn from history, and we should learn from history. In South Australia, we've had quite a long and painful history in the provision of electricity prices. When I say 'long', the last seven or eight years have been quite problematic. I did some quick research this morning before rising to speak here. In February 2015, the wholesale electricity price in South Australia was $44. A month later it was $33. This is an average price for the month. In February 2016, it was $40, and then in March, it was $55. Then, in May 2016, the Northern Power Station closed. It closed because it was no longer economical, with a price of production of around $65 or $70 a megawatt hour. It was becoming increasingly unprofitable for them to supply electricity on a reduced number of days of the year because the renewable energy market had undermined that access to the market. So that closed and, by February 2017, the average price of electricity in South Australia was $179. In March, it was $122, so it had gone up by $80 a megawatt hour—by 130 per cent. In February 2018, it was $109. and then it was down to $80 in March. Perhaps the worst was over. In February 2019, it was $110, and then in March, it was $131. Then the federal government waved a big stick at the gas companies and said: 'You must produce more gas. You are restricting flow to the market.' That had a remarkable effect. By February the next year, it was back down to $64 and then $47 in March. Then this year, it was $22 a megawatt hour in February and $68 in March. It just cannot be that these two events are completely separate. Waving the big stick has made gas more available in Australia and has brought down the price of electricity, which is why we have now seen 18 consecutive months of a drop in retail prices for Australians, at least in the south-eastern electricity market.

There are some very important points in this. In that time in South Australia, there have been other things happen. There have been some good things happen. There has been a big investment in renewables and there has been investment in a couple of batteries. One is called the 'big battery'. That does a very good job in frequency modulation, but it doesn't supply base-load electricity. It doesn't supply that momentum to the electricity grid that it needs to sustain reliable supply of electricity. Only two months ago in South Australia, AEMO was moved to shut down rooftop supply. It was supplying 70 per cent of a thin market. It just becomes unstable on the grid.

We've got over 2,000 megawatts of installed capacity of wind in South Australia but AEMO limits those wind farms to 1,200 megawatts, because they know to bring on any more than that is too unstable for the grid. The point I'm making here is that renewables are the way forward but they cannot be the way forward unless there is an underlying strength in the generation market that enables them to survive. I am talking about my understanding of the electricity market and where the electrons have to be when you turn the switch on in Melbourne so your lights work. That is what needs to be understood in this game. And that can be provided by batteries, but at this stage batteries are very good for frequency modulation and about 10 times too expensive for deep storage. They're very fine if you want electricity on demand for an hour but an absolute disaster if you need it for three days.

Where can we find enough energy to be able to turn on, in the short term, for three, five, seven days when we are becalmed, as we often are in southern Australia through February, March and April? You find it in gas. That's where the answer is. And that's why the federal government's moves, firstly, in waving the big stick and now in ensuring that we will have a gas underlying insurance to the market, which is so important to the advancement of the renewable electricity grid. Renewables cannot keep expanding unless they have back-up technologies. We need to go to the cheapest, most useable forms of those back-up technologies for them to work. That's why electricity prices in Australia have come down over the last 18 months.

Josh Burns (Macnamara, Australian Labor Party) Share this | Link to this | Hansard source

It is always good get up to talk about energy, energy prices and renewable energy under this government, because every time you get up and speak they give you new material, new things, to just shake your head at in disbelief. The record of those opposite is an absolute cluster of mess, policy tangents and ridiculous ideology in slowing down the development of renewable energy in this country. It is not just me saying that renewable energy is the cheapest form of energy in this country. It's actually the government's own energy agency, AEMO. In all of their reports AEMO says the cheapest form of energy in this country is solar and wind, backed and firmed by some form of dispatchable power, some form of storage. But the cheapest form of firmed energy also included in batteries or hydro or whatever—yes, there are other forms of firming power that the government can use that are still cheaper than developing new coal-fired power stations.

But the government wasted $4 million on the Collinsville coal-fired power station. That thing is not going to get built. To the people of Collinsville: you have been sold a complete dud, a lemon, by this government willing to appease the extreme Right of their party, who doesn't even believe in climate change, in order to come up with these ridiculous economic proposals like that. Four million dollars for the Collinsville coal-fired power station is just absurd. If they actually build it it's going to drive up power prices. If they were actually to go through it, it would cause $17 billion of government liability, because that would be the only customer that that plant would have when the rest of the market will be using the much cheaper form of renewable energy.

But it doesn't end there. Last week we had the minister for energy—he's put aside his wars with Clover Moore. He's decided he's going to stop downloading documents off the City of Sydney website and he is going to concentrate on his portfolio. He's not going to bring in a national energy policy—no, no, no. That would be far too difficult for this energy minister. We're not going bring in something that's going to encourage the private sector to invest in the Australian market, to bring forward the amount of renewable energy capacity and potential in this country, to bring down power prices—no, no, no. That would be too difficult for the minister in charge of the energy portfolio. What does our minister for energy decide to do?

He decides to spend $600 million to build a gas-fired power station that, it is estimated, would run around two per cent of the time and, once it is constructed, would employ 10 people, and he pretends that this is some sort of brilliant solution to our energy needs. This is a colossal waste of money.

But the kicker is that, as always with this energy minister, you've got to look one layer deeper. What's the actual story behind this? Well, surprise, surprise: this piece of land is owned by a gentleman who is a Liberal Party donor. I'm not going to do him the honour of putting his name in Hansard, but you can google this fellow. There have been well-documented involvements and dealings, and there have been financial benefits to the Liberal Party thanks to this fellow. So they're going to spend $600 million building a gas-fired power station that's not going to deliver jobs for the region, on land owned by a guy who donates significant amounts of money to the Liberal Party. This stinks.

This isn't even going to the fact to the Clean Energy Finance Corporation bill has completely disappeared off our shelves. This is the very government organisation that is designed to stimulate renewable energy, bring down electricity prices and give the Australian public more investment in good, financially viable clean energy projects. What did the government try to do? They tried to gut the act, and then, of course, the member for New England, the gift that keeps on giving, decided to bring forward amendments that were so unpalatable, so far beyond the realm of reasonableness, that not even his own government could support them. So they've completely ripped out that bill from the parliament.

This government is a joke when it comes to energy prices. This government is a joke when it comes to energy policy. All they are interested in doing is supporting their Liberal mates, and the Australian people are going to be paying for it. The Australian people will be paying higher energy prices, and we won't be tackling climate change as we should.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

There's much I could say in response to that, but I shan't waste my time. I would much rather talk about what the government is actually doing for Australians and, more importantly, for the constituents of my electorate of Forde. I'm very pleased to speak on this motion, because the Australian government has, through its policies over the past few years, succeeded in seeing electricity prices come down. There are more affordable electricity prices for households and, importantly, more affordable electricity prices for businesses so that they can continue to grow and prosper and employ Australians, all whilst reducing our emissions and meeting our targets in that space. Household electricity prices are some 11.2 per cent lower than they were a year ago, and wholesale prices on the national energy market are at their lowest levels in six years. Keeping electricity prices low has been central to our ongoing economic recovery and will support jobs, productivity and economic growth.

I note, Madam Deputy Speaker Bird, that, as you well know, when you were last in government we had the carbon tax. One of the first acts of this government after we came into power in 2013 was to get rid of things like the carbon tax, and that assisted in reducing the cost of living for everyday Australians. Our default market offer reforms mean that average residential customers who were on the highest standing offers prior to the introduction of the default market offer will now be some $780 a year better off, while the average small business customer could be up to $3,105 a year better off. These are direct savings to households and to businesses.

I want to congratulate the Minister for Energy and Emissions Reduction and the government for the work that we are continuing to do to find ways to reduce electricity prices, because we know that, when we have an economy that's based on affordable, reliable power, business in this country can grow and prosper, and that is exactly what we need to occur in this country as we come out of the coronavirus pandemic and the impacts of that. When I have a look at businesses like Stoddart at Ormeau, ATP Science at Loganholme, Holmwood Highgate—a large manufacturing businesses that does a lot of welding, with high energy use—and many other such businesses across my electorate of Forde, I see that the importance of lower electricity prices cannot be overstated.

But it's not just those big businesses; small businesses—our cafes, our restaurants—also benefit from lower electricity prices. Cheaper electricity is also supported by a range of other measures in the budget, and over the past 12 months during the coronavirus pandemic. Measures such as JobKeeper, the extended loss carry back and the instant asset write-off: all of those things assist businesses to grow and prosper and employ Australians. And, as we've seen, it has been a tremendous success. We know that energy, and affordable energy, is critical to ensuring that we have a sustainable economy moving forward.

In addition, we're providing $49.3 million for battery and microgrid projects. Recently, I was pleased to officially open the new factory for Lithium Battery Systems, a battery manufacturer who are doing excellent work in my electorate. They design lithium batteries for marine equipment, motor homes, camper trailers, boats, golf carts—supporting a whole range of activities that allow people to go and enjoy a holiday, go and enjoy time away and get off the grid. One of their really interesting projects, which they did a couple of years ago, was fitting out a bus, called Sleepbus, in Melbourne. Sleepbus allows people who are homeless to sleep in the bus overnight and have a safe, warm place to sleep. It was through their work with that company that they developed a lithium battery system to ensure that Sleepbus can provide a warm, safe, comfortable bed for those who need it. It's just another example of what this government is doing. (Time expired)

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased to have this opportunity to speak to the motion moved by the member for Bass, because, personally, I find it a bit rich that the Morrison government is congratulating itself on its so-called strong action on electricity prices. In the past 12 months, energy consumption in Australian households rose 15 per cent to 20 per cent due to the pandemic. Australians were hit with a double-whammy of winter heating bills combined with higher energy usage due to spending more time at home. In June last year, the average household increased power use by 105 per cent. That effectively doubled power bills. The only choices for households are to dramatically reduce power, and that means less heating in a cold winter; spend less on other essentials in order to pay the higher power bill; or go into energy debt, effectively putting power bills on the credit card. The Australian Energy Regulator did in fact report a steep rise in energy debt over 2020. Residential debts to energy retailers rose 32 per cent, and, since March last year, small-business debt to retailers increased 22 per cent. Australians now owe almost $200 million to energy retailers as a result of power prices.

In Tasmania, the Economic Regulator's Energy in Tasmania 2019-20 report shows the proportion of residential and small-business customers repaying a power bill debt in Tasmania has doubled since the last reporting period. At the end of June 2020, 7,655 Tasmanian households and 404 small businesses were struggling to pay their electricity bills. In the 2019-20 financial year Tasmanian retailer Aurora Energy, a government business enterprise, had 500 customers enrolled in its hardship program. Inexplicably, $3.6 million of Aurora's $5 million COVID customer support fund to assist people with power bills during a pandemic remains unspent. So, the Morrison government's self-love and boasting about a fall in wholesale electricity prices does not mean much when you're still struggling to pay your bill every month. If things are so great, why is life still so hard for so many Australians: young families trying to keep ahead of mounting bills; pensioners literally scraping pennies together? And we know that the protections established to protect customers from disconnection are coming to an end, despite the pandemic still being with us.

Disconnection isn't just a matter of turning the lights off; poor people lose the food in their freezer, there is no warm shower for the kids before school and there is no hot meal at the end of the day. The fact that people can't afford to pay their power bill tells you what sort of financial stress they are already in. Disconnection makes life so much harder—harder to raise the kids, harder to get a job, harder to get to and from work. It's just not good enough for the member for Bass to boast about her government's record on electricity when for the past eight long years the Liberal government has hurt Tasmania's interests by delaying the inevitable move to renewable energy production and storage. After 22 attempts, this government still has no energy policy. All we have is a slogan about a big stick from a minister who is considered a running joke.

In December 2020 the Australian Energy Market Commission published its annual residential electricity price trends report. This report notes that 'residential electricity prices and bills are expected to decrease until 2021-22'. But what it also says, and what the member for Bass fails to mention in her motion, is that residential electricity prices and bills are expected to rise again in the 2022-23 reporting year, following the closure of the Liddell power station. That's because this government has failed to show leadership on energy policy. At the same time as the International Energy Agency is calling for an end to the construction of fossil fuel projects, this backward government is announcing it will spend $600 billion of Australian taxpayers' money building a fossil fuel fired plant to run two per cent of the time—a power plant that the private energy market won't touch.

Welcome to Scotty's soviet republic of 1974, where sound economics and expertise are considered politically incorrect. What's next? A factory to build Morrison's Moscovitch automobiles? The Prime Minister's hand-picked chair of the Energy Security Board says the gas-fired project does not stack up because it's expensive power. This nation demands leadership, and that means an acknowledgement that Australia's energy future is in renewable energy production and storage like Tasmania will provide.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

I take pleasure in supporting the member for Bass's motion. If I talk about Queensland, Queensland still has eight coal-fired power stations operating in the state. Callide B has a 700-megawatt capacity; Callide C is 810 megawatts; and Gladstone, the only privately owned power station in Queensland, is the biggest, with 1680 megawatts. It's owned by Rio Tinto 42 per cent, an American company 30 per cent and a consortium of other owners. This power station was sold by the Labor Queensland government to private enterprise some 20 years ago. This power station has probably at least another—

A division having been called in the House of Representatives—

Sitting suspended from 12 : 03 to 12 : 19

I was listing the number of coal-fired power stations in Queensland and I got as far as Gladstone, which is the only privately owned power station in Queensland. It is partly owned, 42 per cent, by Rio Tinto, and 30 per cent by NRG, an American company. The rest is owned by a consortium of owners. This power station was built in the late 1970s and unless upgrades are put in by Rio and its partners its life is due to expire in about 2028. But Rio assures me that this power station will keep going well into the 2048 period. Kogan Creek is the latest power station to be built in Queensland. It's the closest we have to an HELE plant. It's a 750-watt power station. Millmerran is another one. Stanwell, just outside of Rockhampton, is 1,445 megawatts, Tarong is 1,400 and Tarong North is 443.

Because of these coal-fired power stations, we are sending power into New South Wales. If you look at the chart, today 740 megs are going across the border. What happened three weeks ago? New South Wales threatened to run out of power. The Tomago Aluminium plant had to shut down three times. Now, I'm not knocking—

An honourable member interjecting—

Yes, and they had to cut back their cells. The point is I'm not knocking renewables—I think there's a place for renewables—but that does not displace coal-fired dispatchable energy. It cannot take the place of coal-fired power stations. Gas is an alternative, but coal is still the king when it comes to coal-fired power stations. That's why we're seeing that 742 megawatts going to New South Wales today.

There is another thing our consumers have to contend with, and I'll quote from the Biggenden abattoir in my electorate. His bill is about $20,000 a month. Half of that, 50 per cent, $10,000, is electricity used. The other $10,000 goes to fixed costs, and that is to pay for the poles and wires. He pays that every month. That is $10,000 of network charges for his power. That's half his bill. When it came to putting power on to his abattoir, he had to doze his own line and put in about three power poles from the main source. Yet, for the effort he put in to hook that up to the main line, it's costing him $10,000 a month, and that has gone on for many years, with no sign of CS Energy or the power grid giving up that charge. So he's faced with network charges of $10,000 a month, which is $120,000 a year. That's the point I'd like to make about that. He's got some of his own solar on the roof— (Time expired)

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

There being no further speakers, the debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.