Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I rise to speak on the Renewable Energy Amendment (Feed-in-Tariff for Electricity) Bill 2008. In so doing, I would like to say first of all how appreciative I am of the work that went into this legislation in the Senate committee process and in the submissions that were received on this legislation. As a result of a considerable amount of consultation and work on the bill, I have incorporated a lot of the concerns and recommendations from the committee hearings on this bill. It is with considerable pleasure that I take this opportunity to address the Senate on this Greens legislation. It is entirely appropriate that we are addressing this bill this afternoon. Overnight, the International Energy Agency released its report saying that if we continue as we are, we are looking at a six-degree rise in global temperature. The report also indicated that the age of cheap oil is over. So it makes absolute sense for Australia to move as rapidly as possible to address our greenhouse gas emissions, to reduce our dependence on foreign oil and to stimulate the Australian economy at this time when the flow-on effects of the global financial crisis are already quite clear and there are ominous signs in some sectors for employment.

Just two weeks ago in London, the Green New Deal was announced. Leaders such as Prime Minister Gordon Brown, President Nicolas Sarkozy and UN Secretary-General Ban Ki-moon said that it is time for the world to use the opportunity provided by the financial crisis to invest billions into economies to get them going again and to invest in green technologies which will reduce climate change and improve the quality of life in cities around the world, especially where quality of life is somewhat compromised by high levels of pollution and lack of amenity. The Greens are a solutions based party when it comes to addressing climate change and peak oil, and we have the opportunity here in the Senate to provide a solution with a piece of legislation which, if enacted, can provide a framework for the rollout of a gross national feed-in tariff in Australia.

Some people might ask: how does a feed-in tariff work? Surely we have got a number of feed-in tariffs around the country already. A gross feed-in tariff works by enabling consumers to become energy providers—energy generators. It provides the financial mechanism for people to know that, whatever energy they produce, they will receive a fixed price for a fixed period of time. That can be at the residential level, the commercial level and through to the utilities-scale level. It is the mechanism that has driven the revolution in renewable energy in Germany. It is driving a renewable energy revolution in Spain and even in the UK, where they have tended to prefer systems such as an MRET system. The UK has recently acknowledged that the main driver of the deployment of renewable energy in Europe has been feed-in tariffs, and so the UK is likely to move to a feed-in tariff system.

In Germany, in particular, jobs in the renewable energy sector have increased to the point where there soon will be more jobs in renewable energy than in the motor vehicle sector—which used to be the major industry manufacturing sector. People have seen that this can provide them with the opportunity not only to switch to renewable energy but to make a personal contribution to climate change and get an additional stream of income. So you have farmers throughout Germany covering their winter barns with photovoltaics, for example, and local governments covering noise barriers and areas down the centre of highways with various types of renewable energy, particularly solar.

People can see that if you can borrow from the bank, knowing what the price of the energy is going to be for 20 years and knowing what your repayments are, there is certainty for financial institutions so they lend you the money. That is what has driven the process around the world. You have to ask yourself: why is it, in Australia, that we are not embracing a national gross feed-in tariff? A number of states have been waiting for the Commonwealth to act on this and several of them have gone ahead on their own. But the problem that we currently see with the state based legislation is that it is all different and it is overwhelmingly flawed and inadequate. To give some examples: in the states of South Australia, Victoria and Queensland, and in the case of Alice Springs and the ‘Solar Cities’, it is for photovoltaics only. That is not good enough. Why would you just pick photovoltaics? Why wouldn’t you enable all forms of renewable energy to be eligible for a feed-in tariff? Also, in some states they have decided to go with a new feed-in tariff rather than a gross tariff. With a gross tariff you receive the payment for all of the electricity that you export, and you pay the normal rates for what you import. So you receive that money as a generator and then you pay whatever you need for your consumption. That is by far and away the most effective method. And yet several of the states have not only restricted it to small-scale photovoltaics but restricted it to a net system where you only get the income from the difference between what you produce and what you use. In most cases, that is such a small amount that it is not a driver for deployment of the technology because it does not provide the opportunities for an additional income stream.

Why would you want to take it from residential through to utility? That should also be obvious. We do not want to restrict renewable energy to small-scale production. We want to bring on some of the larger scale new technologies. We want to bring on, for example, solar-thermal and geothermal. We know that a mandatory renewable energy target is not a sufficient mechanism to bring on those new technologies. In the case of wind, the mandatory renewable energy target will see a considerable rollout of that technology. But other technologies need additional support. Others will say, ‘If you bring in a gross national feed-in tariff, once you have set the tariff over a period, what about the additional cost across all the consumers on the grid?’ The answer is that you compensate in the same way as additional prices will be levied through the emissions trading system. Inevitably, if you increase the price of energy then you will have a disproportionate impact on lower socioeconomic groups, whether that is through an emissions trading system or a feed-in tariff.

What you need to do—and the government has already acknowledged this—is compensate low-income earners for the additional cost in their energy bills. Initially, the government and several of the NGOs were arguing that that compensation should be financial. From the very beginning the Greens have argued that the compensation should be in the form of energy efficiency by providing low-income earners with energy efficient technologies, such as solar hot water or full insulation, so that they permanently reduce their energy demand and therefore their power bills, rather than just providing cheques. Often there are so many competing demands on people’s finances that they spend the money and do not necessarily have it when the energy bill comes in. From our point of view, spreading the cost across the whole grid and then compensating lower income earners through ever-increasing efficiency measures is a much more effective way of dealing with the issue of cost.

It is a nonsense to say that the quantum of the extra cost is too expensive because, in Germany, it averages out to the cost of a couple of cups of coffee a year. So we are not talking about very much additional money on consumers’ bills, but we are talking about a revolution in renewable energy and a revolution in the number of jobs. That brings me to the next point. Barack Obama has already announced that he intends to spend $150 billion in the US over the next five years in driving a renewable energy revolution. He is doing it because he recognises that the US has fallen so far behind competitively in these technologies that, if they do not spend the money and move ahead now, they will have no manufacturing sector because the Chinese, the Europeans and so on will have moved so far ahead of them. That is one of the strongest arguments for getting behind the green new deal here in Australia.

Some people may not share the passion that many of us have for reducing greenhouse gas emissions, but we ought to at least share the passion for maintaining the Australian economy, building competitiveness and rebuilding the manufacturing sector. And to do that, we need to keep at home the best brains we have in our universities for the innovation and the commercialisation of those technologies, roll them out in Australia and then we can sell the technologies and the expertise overseas. That ought to be our aim and we should drive that through R&D processes and legislative frameworks, such as the one I am proposing, and we should also drive it through procurement.

The whole thing has to be internally consistent from the government’s point of view—you have a green car program, you commercialise the plug-in hybrids, then you use those to help support an increased load for renewable energy through intelligent distribution networks and then you also roll out your renewables so that you can electrify your car fleet. It is a perfect solution. It gets us off the coal addiction that we have and it gets us off imported oil. Those people who have been fiddling around the edges on the cost of fuel, with a few schemes to look into how the retail and wholesale issues are managed, are obviously not listening to the fact that peak oil is with us, but the price of oil will increase again to $150 and $200 a barrel before we know it. At that point we ought to have rolled out the technologies for electrification of the vehicle fleet and rolled out investment in public transport, which is another way of innovating in Australia—getting the economy going, creating jobs and leaving us with better designed cities and a better amenity in the environment.

It is necessary to point out at this time that of course the legislation has taken into account everything that has been said in the submissions that came before us and in the actual committee hearings. The bill has been amended, but it will need considerable support from the government in developing the regulations that go with it. It needs to be designed in such a way so that the state based schemes could transfer as quickly as possible so that the whole thing can be nationally harmonised.

It is a big mistake to leave this process to COAG. In March this year COAG decided that in October they would report on a harmonised feed-in tariff system. October came and they deferred it. Even in the message from COAG there was no reference to feed-in tariffs. We are going into another COAG meeting in November and it is critical that that COAG meeting puts feed-in tariffs back on the agenda. But it requires Commonwealth legislation.

Just as the mandatory renewable energy target is a national piece of legislation, so too is the carbon pollution reduction scheme. That is not being left to the states but is taking into account, for example, the New South Wales scheme. We should have national legislation in here in order for the states to come on board. Leaving it to COAG is a recipe for making sure it either does not happen or it does not happen in a timely way. And, if it ever does happen, it will be at the lowest common denominator because already some of the states are locking in second-rate, flawed systems and, worse still, rolling out the meters associated with the introduction of a feed-in tariff—meters that are suited to net metering and not to gross metering. The longer that this is delayed, the worse the scenario that is going to operate—where everybody spends money entrenching a flawed system and we never get to where we need to be.

This legislation essentially provides the Commonwealth with a framework for the minister to make the necessary decisions about the technology. It says that all forms of renewable energy ought to be eligible for a feed-in tariff but, if the mandatory renewable energy target has brought on wind to such a point, the minister could decide that there was a zero for the tariff rate for wind and so would confine it to the MRET process. It allows the minister to set the tariff. It gives the flexibility for the minister to change that tariff over time according to how the rollout of each of the sectors is going, so that those that are not being brought on as quickly as they might get a higher tariff after a while. If they are coming on very fast and everything is going well, it may be possible to reduce that tariff over time. That would clearly be the intent. The main point is that, once you have been given the tariff for a particular year, it is locked in place for 20 years so people have that certainty when they go to borrow the money from the bank.

The other advantage of the feed-in tariff is that everybody in the industry in Australia is 100 per cent behind it. There are no renewable energy companies in Australia who are saying this is a bad idea; they are all pushing for it. They all recognised the value of a rebate system when it was operating, and they all recognise the value of MRET, but they have all come on board, saying, ‘This is the kind of mechanism we want.’ You have everyone, from the smallest providers right through to others like BP Solar, saying this is the way to go. There is no-one in the renewable energy sector who is saying this is a bad idea. They are all on board, they all want to get going and they all want a national gross system as fast as possible. At the moment, the only road hump to getting there is that the government is standing in the way, saying the states can do it through COAG. That is not good enough, because we have a global emergency—six degrees if we do not change our ways.

This is good news for jobs, good news for the environment, good news for renewable energy and particularly good news for rural communities. In adapting to climate change, they can farm renewable energy, especially utility-scale renewables, out in some of the areas where they are most adversely impacted by the drought. They can go into joint venture or leasehold arrangements on some of these huge properties and to generate renewable energy and be able to sit on their properties, stay in their communities—which is what they want to do—continue to enjoy the connection with the rural communities and the land they have farmed for many years by having an income from renewable energy. I can see no good reason in the whole process as to why this legislation would not be supported at this time.

This is a framework piece of legislation. It does not have the Greens telling the minister what the tariff should be or what the rate should be. It is an enabling piece of legislation. I recommend the bill to the Senate on behalf of all of those people who want to be enabled to reduce greenhouse gas emissions, to create jobs and to create wealth in the Australian economy. There is no good reason not to support this legislation at this time.