Scott Ludlam (WA, Australian Greens) Share this | Hansard source

I rise to add some brief comments on the Senate Standing Committee on Economics report entitled Matters relating to the gas explosion at Varanus Island. I believe the senators who came before me in this discussion on the report canvassed the issues that the committee covered fairly well. I want to comment mainly on chapter 5, which dealt with solutions, essentially: energy security, and diversifying sources of energy in Western Australia. Senator Cameron foreshadowed some of the evidence that we took from the renewable energy sector that probably provides some lessons for the whole country, even though the case studies that we were talking about were in Western Australia. This was an inquiry into the vulnerability or the resilience of the Western Australian energy sector, and this accident exposed just how fragile our energy system is, not just in Western Australia but I would suggest right across the country. We heard from the former energy minister, Fran Logan, that effectively there are two pipelines 1,500 kilometres long which bring 95 per cent of the gas from the north-west. That creates a unique vulnerability. What we saw was one accident at one plant which knocked out a substantial proportion of Western Australia’s gas supply, with quite severe economic consequences, and the committee heard about those in some detail.

What is not unique is that it is the nature of fossil energy networks that they only come in large centralised plants connected by cables or pipelines thousands of kilometres from the source to the load or the demand. That has an inherent vulnerability to it. So in the bigger picture it is quite important for us to take note of the fact that it is not unique to Western Australia—it is not even unique to Australia—that these fossil grids are actually quite fragile. The common myth is that fossil-fuel generators are reliable and that renewable energy is patchy and unreliable. We heard quite compelling evidence that exactly the opposite is the case. A vibrant renewable energy sector in Australia would look like thousands of small generators scattered around regional areas, particularly at the edge of the grid, which would have an enormous impact on energy security. This goes directly to the aims of the inquiry, which were not just to ascertain what happened but how to prevent this sort of event from happening in future.

We heard evidence from a wonderful and very active group in Western Australia called Sustainable Energy Now, who are dedicated essentially just to promoting solutions and modelling what a renewable energy grid would look like in Western Australia and how we can get there from where we are at the moment. They noted that relying on a few centralised sources for critical energy supply provides poor energy security, and that is what this report was all about. We heard from Dr Ray Wills, the head of the WA Sustainable Energy Association, that the peak demand in the grid—which a lot of gas is used for, for the peak generators that spark up when the load on the grid is greatest—is exceptionally well served by solar because obviously the sun is shining at exactly the time that people are switching on their air-conditioners and so on.

We also heard that renewable energy technology is not inflationary, and I think it is worth pausing to note exactly what that means. Once you have built the generators, the fuel source for most renewable energy technology is free. The way Dr Wills put it to us was:

One of the key advantages of renewables is that you know what your energy price will be in 20 years time because the sun will continue to come up, the waves will continue to wash on our shores and the wind will continue to blow past us. The cost of that energy source will not change. Sure, there will be maintenance costs, staffing costs, there will be other things that do add some inflationary pressures to that energy generation, but the reality is that we will still know the price of the source of the energy itself …

That is actually quite a profound statement. Once renewable energy architecture has been built and is in place, the fuel costs essentially are free for all time. In Western Australia the wind energy resource is superb, as I suspect it is in most of the rest of the country. It is also a load-following resource in that it tracks relatively smoothly the pattern of demand, just by pure coincidence. These are all things we should be pursuing.

One of the most compelling cases for a large-scale baseload renewable energy sector was made by Dr Michael Ottaviano of the Carnegie Corporation, who spoke to the fact that the wave energy resource in Australia is spectacular and somewhat unheralded, although I suspect that is all about to change. The Carnegie Corporation is a WA based innovator of wave energy technology. Last year it calculated just how much potential wave energy there is in Australia. In the deep water sense—that is, at a depth of 100 metres or more—there is something like 500,000 megawatts, roughly 10 times Australia’s current installed capacity. This is a vast, globally distributed resource which is basically untapped. Wave energy is not an intermittent source of energy. The reality is that in Australia we are incredibly fortunate. We have a constant source of energy. We also have a very long coastline exposed to that energy which, according to the Carnegie Corporation, could make a significant and reliable contribution to the grid as early as 2011.

The committee also heard that the UK government spends $20 for every $1 that the Australian government spends on trying to harness its wave energy resource, despite having a resource that is only one-thirtieth the size. So it is really time that Australia caught up with the rest of the world. This inquiry adds another dimension to the fact that a renewable energy network in Australia is not only possible and essential but would add to the resilience of energy security in this country.

Because these are start-up technologies, what they need now is support through both federal and state government processes and a national gross feed-in tariff. It was suggested that what we are facing today is really not that different to the situation at the beginning of the last century, when governments were involved in the public interest, in the creation of our current energy-generation infrastructure. They did not leave it to the market. They built wires, they built power stations, they put in the infrastructure. That is the point we are at now, because we are changing our energy-generation paradigm, not just because it would be a nice thing to do but because we have no choice; we have to undertake these changes.

I particularly commend the committee’s recommendation that:

The Western Australian Government should actively engage with the alternative energy industry in Western Australia in order to progress energy diversification through increased alternative energy capacity.

The committee agreed that WA does not necessarily need more expensive contingency options, because that is not necessarily the best response. The best response probably is the development of smaller scale alternative energy—small scale in terms of the size of the actual generators but very, very large scale right across the state, putting the generators where the resource is, whether it be sun, wind, wave, biomass or geothermal energy. Such an energy grid would be resilient; its fuel is non-inflationary; it would reduce our dependence on imports of foreign fuels; it would create thousands of jobs in regional areas; and it would tackle the big one that confronts not only us in this chamber but people right around the planet, which is of course climate change. We were left with the question: why on earth is this not already happening?