Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

I will make the point, Senator Boswell, that you have put forward amendments and that your representatives in your shadow ministry and I, as the relevant minister, have been negotiating, just as we said we would. What a difference between the way in which the coalition has sought to engage with this legislation and the coalition’s abject, complete, refusal to engage with the Carbon Pollution Reduction Scheme.

We have delivered on our commitment to negotiate in relation to the renewable energy target, as Senator Abetz said. I thank those shadow ministers with whom I have been dealing and I hope that we can resolve these issues through the committee process. I also thank Senator Milne, acting on behalf of the Greens, and Senator Xenophon for the discussions with me and my office on their views. This is the way we could have approached the Carbon Pollution Reduction Scheme. I again remind those opposite that, unlike in relation to this renewable energy legislation, they did not come forward with a consolidated position. The opposition did not come forward with any amendments that had the support of the party room; in fact, the opposition did not come forward with any amendments whatsoever.

I want to briefly address some of the issues which have been raised in this debate. I know a range of amendments have been moved and I suspect we will discuss those issues in the context of the committee stage. The first is the relationship between the renewable energy target and the Carbon Pollution Reduction Scheme and the assistance available to industries. I want to make this point very clear as the relevant minister: the reason we put forward assistance to industry through the renewable energy target in a way that reflected the assistance under the Carbon Pollution Reduction Scheme was that we thought that was the best policy.

There have been a lot of allegations in this place and, I note, in the Senate committee report from a number of parties, including the Greens, about intention—sometimes governments actually do things because they think they are the right policy. That may come as a surprise to cynical people, but that is what governments do seek to do. We reflected in the design that we put forward in this legislation the reality that a range of firms in different industries said to us, ‘We need you to consider the cumulative cost of the carbon price as well as the additional electricity cost as a result of the renewable energy target.’ It was with that in mind that we took to COAG the proposition: ‘Let’s use the broader base and the architecture of assistance that we have put out under the Carbon Pollution Reduction Scheme and in the white paper after long consultation with industry. Let’s use those thresholds and that architecture and on that build exemptions or partial exemptions and assistance for the renewable energy target.’ Those opposite may recall that that agreement was taken to COAG in April 2009 and that is what was announced then. I note that there was no outcry from any of the parties in this chamber when that was announced in the COAG communique.

The government is in discussions with other parties in relation to this issue. We announced last weekend an interim de-linking arrangement that provides some assistance to industry until the Carbon Pollution Reduction Scheme comes into place. I make it very clear that that is a less than perfect way of tackling climate change and a less than perfect way of delivering assistance to industry. We still believe the best policy approach is to reflect the CPRS architecture for assistance because that gives industry a very clear understanding of the cumulative cost and the cumulative level of assistance. That is why we initially proposed that, and we remain of the view that the best way of providing assistance is to build on that which was set out in the government’s decision on the Carbon Pollution Reduction Scheme.

Senator Milne has suggested, amongst other things, an increase in the renewable energy target to 30 per cent. Obviously, the government is delivering on a commitment we took to the Australian people at the last election which will deliver a fourfold increase by 2020. This is a challenge but it is achievable and affordable and, as I said, it will drive investment in Australia’s renewable energy sources, such as wind, solar and geothermal.

There has also been a suggestion that the RET, the renewable energy target, should be banded to ensure the deployment of less mature renewable energy technologies. I suspect this will be a live issue in the context of the committee debate. The way the government has approached this is to recognise that the scheme should encourage the deployment of renewable energy without picking winners within the target. The government’s modelling indicates that, due to the large size of the renewable energy target, it will in fact pull through a range of technologies, including wind, biomass, solar and geothermal. It is also the case—and this is important—that over time the carbon price will be the primary driver of renewable energy and will provide significant support over the next two decades in addition to the renewable energy target.

Our view is that there is a case, in terms of emerging renewable technologies, for other forms of assistance. We believe the best policy is to provide that assistance not via what is a market mechanism but via other policy mechanisms. I would refer those in this chamber to the 2009-10 budget initiatives, which include the Clean Energy Initiative, which includes about $1.5 billion to support R&D, research and development, in solar technologies and $465 million to establish the Australian Centre for Renewable Energy. This is on top of the previous election commitment that we made in relation to the Renewable Energy Fund. In combination with support under the renewable energy target, these policies will promote a diverse portfolio of renewable energy technologies.

There has also been discussion about a national feed-in tariff. I have had quite a number of discussions with Senator Milne on this issue. I recognise that it is the Greens policy. As I previously indicated, we believe that these are alternative policy mechanisms for promoting a renewable energy uptake. Obviously a renewable energy target sets a quantity of renewable energy as the target. A feed-in tariff provides a certain amount of support for specified technologies. We took a renewable energy target as our preferred policy option to the election and, of course, the Council of Australian Governments also decided in November 2008 not to implement a national feed-in tariff but to agree that jurisdictions could implement such schemes. A range of principles were agreed by COAG in relation to that, including whether or not such schemes would be funded on or off budget was a matter for those jurisdictions.

There has also been some discussion of the government’s decision to include waste coalmine gas in the RET. I emphasise this is intended as a transitional measure and is intended to underpin the viability of projects that have already been committed whilst maintaining the integrity of the renewable energy generation target by including higher annual targets to ensure no renewable energy is displaced. The government agrees waste coalmine gas is not a renewable energy source. We do not intend it to contribute to the 20 per cent renewable energy target by 2020. The amendments proposed by the government in this legislation will increase the annual targets under the RET for the years 2011 to 2020 inclusive to ensure the inclusion of this gas does not displace renewable energy generation. To clearly differentiate waste coalmine gas from renewable energy sources, the amendment creates a new concept of eligible energy source that comprises the current list of eligible renewable energy sources and separately eligible waste coalmine gas. Again, I emphasise, this eligibility will be limited. It will be limited to waste coalmine gas fuelled power stations currently in operation. Annual limits will be placed on these power stations’ ability to create renewable energy certificates based on their 2008 output levels.

To ensure the inclusion of waste coalmine gas under the renewable energy target does not crowd out renewable energy generation, the amendment will increase annual targets under the expanded RET Scheme for the years 2011-20. The target in 2011 will be increased by 425 gigawatt hours to account for the half-year of eligible generation and the annual targets for 2012-2020 will be increased by 850 gigawatt hours. Total eligible waste coalmine gas generation will be capped at 425 gigawatt hours in 2011 and 850 gigawatt hours for the years 2012-2020, equal to the amount by which the annual targets are increased under the renewable energy target.

In conclusion, the renewable energy target is part of the government’s economically responsible approach to tackling climate change and to moving Australia to a low-pollution future. It will drive significant investment, accelerating the deployment of a broad range of renewable energy technologies like wind, solar and geothermal. Through a single national scheme this renewable energy target will transform our electricity sector and ensure that 20 per cent of our electricity supply comes from renewable sources by 2020. But I again remind senators that, whilst this bill is worthwhile and whilst this bill is necessary to increase renewable energy in Australia, it is not enough and if we are to tackle climate change we need to do much more. I look forward to the Senate’s cooperation in that task.

Question agreed to.

Bills read a second time.

Renewable Energy (Electricity) Amendment Bill 2009