Nick Xenophon (SA, Independent) Share this | Hansard source

I note that time is particularly precious this week, given that this is the last sitting week before the winter break, and I intend to keep my contribution short, on these and other bills. I indicate at the outset that I broadly support the intent of the Renewable Energy (Electricity) Amendment Bill 2010 and related bills. The government does seek to improve Australia’s support for renewable energy technologies.

However, I still have concerns—as I did last year when we first debated this legislation—with regard to the renewable energy certificate scheme. One of my key concerns relates to the inclusion of electric heat pumps or air source heat pumps, as they are sometimes called, in the REC scheme. To put it simply, a product that uses electricity cannot be properly categorised as renewable, and that is a real concern. If this scheme is about encouraging consumers to take up renewable technologies and about developing renewable technologies in this country, then including electric heat pumps under the REC scheme is a contradiction.

I understand that electric heat pumps are better for the environment than the standard electric water heaters that many households still have, but the fact remains that they still use electricity. They therefore are not renewable and should not be subsidised under the renewable energy target legislation. It is an anomaly, and that anomaly is compounded by the relative lack of efficiency compared to other technologies.

There are four types of heat pump technology available. There are electric storage heat pumps, which produce the highest emissions and are usually powered by off-peak electricity. These are the systems many households currently have in place which are being phased out. There is natural gas, which can be either continuous or storage, and either mains-supplied or supplied from bottled LPG. There are electric heat pumps, which I referred to, which essentially have similar greenhouse intensity to electric-boosted solar and storage and continuous gas systems. And, finally, there are solar with natural gas or LPG systems. The emissions intensity of gas-boosted solar is in the order of 25 per cent lower than electric solar and electric heat pump systems, and this is the renewable technology that I believe we should be encouraging households to install.

It does concern me that, in my home state of South Australia, you have a situation where Rinnai has had to lay off workers in their plant producing solar hot water heaters and to stand down workers as well. They did that recently for a one-week period because they cannot compete fairly with something that is not as green as a solar hot water system. Under the RECS system, electric heat pumps become so affordable for consumers that the best renewable option, solar, is often being bypassed, and hence we have seen that level of unfair competition.

Australians want to do the right thing by the environment with electric hot water systems, with heat pumps. But I wonder what the reaction will be when families who install an electric heat pump find that it is nowhere near as environmentally friendly as it is meant to be and their power bills continue to be quite significant. I have been advised by the Gas Industry Alliance that—as a result of electric heat pumps being listed under the REC scheme—of the hot water systems claiming RECS, 90 per cent are either electric heat pumps or electric boosted solar. I do not think that that is good for the environment or a good use of the taxpayer subsidies that we use in relation to this. I think that we need to encourage consumers to take up truly renewable energy technology.

Another issue that needs to be addressed is how to better support emerging renewable energy technologies. I believe that further support should be provided for emerging technologies such as wave, solar thermal and geothermal—hot rocks—amongst others, but these are long-term projects and require certainty to secure investment. I foreshadow that I will be moving an amendment to this purpose in the committee stage.

Further, I think that the work done by companies which collect and convert landfill gas to energy should be recognised and supported. It is with the RECS. But we also should be looking at energy efficiency technologies that would use this cogeneration gas from landfill.

I believe there is an opportunity here to improve this legislation. I believe that it is an anomaly that electric heat pumps get the support that they continue to get under this, and my concern is that there is a real risk that rorting can still take place. I will be asking questions during the committee stage about the level of checking, the level of auditing, of electric heat pumps. I note that the government did move forward with this last year, in terms of the commercial installation of electric heat pumps. They were welcome developments. But I would like to ask in the committee stage: to what extent are electric heat pumps being audited to ensure that rorting is not taking place? So I look forward to the committee stages of this bill.