Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Hansard source

The Australian Centre for Renewable Energy Bill 2009 is broadly supported by the coalition. It is a bill that will establish the board of the Australian Centre for Renewable Energy and the position of chief executive officer of what will become known, no doubt, as ACRE. It creates a central body that is aimed at supporting the existing research, development and demonstration of low-emission and renewable energy technologies to improve their competitiveness. We are treating this bill as non-controversial and administrative in nature and we view this approach to coordinating the various renewable energy programs as appropriate and sensible.

The bill contains a number of provisions that relate to the role of the board in advising the minister on the best ways to promote the development, commercialisation and use of emerging renewable technologies. The functions of the board are contained in the bill and include advising the minister on improving existing program delivery, priority areas for government support and the provision of venture capital funding. The board will comprise a chair, the CEO as an ex-officio member of the board, and up to six other members appointed by the minister. The bill requires that the minister ensures that the proposed appointees to the board have knowledge of, or experience in, a field relevant to the functions of the board.

ACRE will consolidate a number of renewable energy programs including the Renewable Energy Demonstration Program and the Geothermal Drilling Program. The government states that ACRE will ‘complement’ the CPRS and the expanded renewable energy target by streamlining the current fragmented administration of renewable energy programs and support. So, while we agree the centre will support the coordination of renewable energy programs, a worthy aim—and it gives me more confidence that these are to be overseen by the Resources and Energy portfolio rather than other, unmentionable, departments—we do not support the tying of this bill in any way to Labor’s now twice failed CPRS, just as we did not support Labor’s attempts to tie their RET legislation to the passage of the CPRS.

In the context of the work that the Centre for Renewable Energy will oversee, an issue of concern for the opposition is the comparatively low level of government support for geothermal energy. While the government likes to talk up the great potential of this emerging energy source there is little evidence that it is prepared to provide the type of support the geothermal sector needs to realise that potential. The Minister for Resources and Energy, Martin Ferguson MP, had this to say on opening the geothermal project in my home state, on the Limestone Coast, last week:

Geothermal energy is particularly important because of its potential to supply base-load electricity to the Australian grid from a zero-carbon renewable source.  In doing so, it meets our objectives to increase energy security by diversifying energy sources, reduce Australia’s greenhouse gas emissions and to supply 20 per cent of Australia’s electricity by 2020 from renewable sources.

I could not disagree with a word of that. The minister has also often repeated Geoscience Australia’s estimates, such as:

... that if we were able to extract just one per cent of Australia’s geothermal energy, it would be equivalent to 26,000 times Australia’s total annual energy consumption.

I think that appropriately demonstrates the potential of geothermal energy. But, considering that great potential and the minister’s preparedness to talk up geothermal, the relatively low level of funding support the government has thus far provided is perplexing.

Last year the government announced its $4.5 billion Clean Energy Initiative, yet just over $200 million of that funding has been allocated to assisting the geothermal sector. This has included just $50 million to support the all-important geothermal drilling projects and some $153 million to support the development of two geothermal energy plants. By comparison, $2.4 billion was allocated for carbon capture and storage and $1.5 billion for Solar Flagships. The industry advises that the major hurdle to getting geothermal projects off the ground is the all-important proof-of-concept stage. That first stage can cost in the order of $30 million to $40 million per well and, following the GFC, securing initial finance for geothermal drilling is proving extremely difficult. So the clear message to the government is: if it seriously believes in the potential of geothermal energy to provide clean baseload power, it simply has to provide greater levels of support. Without the emergence of major geothermal projects over the coming years the 20 per cent renewable energy target will not be reached.

The need for this government to direct more support towards geothermal is especially acute given Labor’s complete and utter refusal to countenance even a debate about nuclear power in Australia. Here we have the Labor Party proclaiming itself as ‘true believers’ in the theory of global warming and the need to curtail anthropogenic CO2 emissions, yet it is not taking seriously the only two current zero emission sources of baseload power, geothermal and nuclear. Its support for geothermal is relatively paltry and it will not even discuss nuclear power. From our perspective, Labor’s hypocrisy in this matter is truly breathtaking.

When in government, the coalition provided significant support for renewable energy with more than $1 billion of the coalition’s $3.5 billion climate change funding allocated to renewable energy initiatives, including through funding for solar hot water rebates, the Renewable Energy Development Initiative, the Photovoltaic Rebate Program, Solar Cities, the Low Emissions Technology Demonstration Fund and the $25 million to develop renewable energy technology through the Asia-Pacific Partnership on Clean Development and Climate. We established the world’s first mandatory renewable energy target, which stimulated some $3½ billion of investment in renewable energy technologies since its introduction in 2001.

Our climate action spokesman, Mr Greg Hunt MP, worked with the current government to improve the renewable energy target in 2009, including through a full decoupling of the RET from the proposed CPRS, securing appropriate protection for key energy-intensive trade-exposed industries such as aluminium, ensuring protection of existing investment and jobs in the coalmine waste methane power generation industry, providing scope for industries which may be affected by the RET such as food processing, to refer their treatment to the Productivity Commission and tightening of regulations relating to RET eligibility for heat pumps.

Despite the concessions won by the coalition in that matter, we argued then that the RET needed further amendment to ensure that all renewable energy sources could find their place in the renewable energy market. Regrettably, these warnings were ignored by the government and Labor’s mismanagement of the renewable energy target has resulted in market distortions which saw the price of renewable energy certificates collapsing from around $50 to around $30.

In what is now very clearly a short-sighted and cynical political move, the government chose to use renewable energy certificates as a way of offsetting its decision to abruptly end the coalition’s $8,000 solar panel rebate. That has been a major distortion to the market for the certificates. It helped undermine the value of the certificates, putting at risk major new investment in large-scale renewable energy projects, including wind farms. We are pleased that the government has responded to pressure from the coalition, the Greens and the renewable energy sector by proposing major changes to the RET in a bid to restore some balance to the scheme and to provide investment certainty.

For our part, we will closely examine the detail of the government’s proposal to break the RET into two parts—a small-scale renewable energy scheme and a large-scale renewable energy target. Following the debacle of the government’s insulation program, we will need to be satisfied that it has not simply cobbled together another quick fix which could result in further problems such as a significant spike in electricity bills for average Australians. The two-tiered system proposed by the government, from our perspective, has all the hallmarks of a catch-up exercise. It follows the announcement by the Leader of the Opposition, Tony Abbott MP, that a coalition government will create a band within the renewable energy target to be reserved for large energy renewable projects—the over-50-megawatt projects—or for emerging technologies such as solar fields, geothermal, or tidal and wave projects over 10 megawatts. Clearly, there is some comparison between what the government has proposed and what we had earlier flagged.

Also, as part of our direct action plan to tackle climate change, we announced that a coalition government would introduce a range of initiatives to boost renewable energy use in Australian homes and communities, taking advantage of our abundant natural resources, including through 125 mid-scale solar projects in schools and communities and 25 geothermal or tidal power ‘micro’ projects to be established at appropriate venues.

In conclusion, I confirm that the coalition will support this bill. We see the establishment of the Australian Centre for Renewable Energy as a sensible move to provide more cohesion, under the Department of Resources, Energy and Tourism, for a range of renewable energy programs. But in relation to renewable energy we strongly urge the government to work closely with the coalition to address the current problems with the renewable energy target so that the scheme is sustainable and provides appropriate levels of incentives for investment in the full range of renewable energy sources.