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

For the benefit of the Senate, because we are trying to facilitate a lot of changes in a short time, yesterday I deferred consideration of my amendment which provides for a biennial review of operation of renewable energy legislation, because I was negotiating with the government and coalition for a word change. That word change is now reflected in No. R3, sheet 6114 revised. We are now bringing back something that was deferred yesterday, and it provides for a biennial review of the operation of the renewable energy legislation.

I think it is absolutely essential that we have a biennial review, because this industry sector is moving faster than the parliament can possibly keep up with. As I indicated yesterday, the price of solar panels has gone down 40 per cent since the legislation was introduced last year. There are new technologies coming on all the time and there ought to be consideration of whether they should be included. Yesterday I did ask about why evacuated tube systems are not able to generate renewable energy certificates. Also, what about geothermal heat for individual residents? That is not currently included. We need to be constantly looking at new technologies and whether they would qualify or otherwise under the scheme.

Also, the adequacy of the target needs to be looked at. In my view, 20 per cent is nowhere near enough. But I accept that the Greens do not have the numbers at this point to increase the target. What is very clear is that the tenor of the debate is about dampening demand not actually driving massive expansion. A lot of the problems we are now trying to fix up would have been sorted if we had actually increased the target to 30 per cent or more. Clearly, we need to be constantly reviewing the target—as the technologies come on-stream and as the economic viability of those technologies and so on improves—and reviewing how the scheme is operating.

The minister and the coalition obviously reached an accommodation around the renewable energy certificates that can be created from the small-scale part of the scheme. The Greens do not support that. The amendment was delivered to this Senate very shortly before it was actually debated as the first amendment yesterday. I am worried about this because the whole point of us being here is to take out the uncertainty and to give long-term investment signals. We are now doing that in the large-scale part and we are making it very clear what will be there for them. Now, by introducing a soft cap of six million, the government and the coalition have effectively introduced uncertainty for the small-scale renewable energy providers. For example, last year in 2009, 19 million renewable energy certificates were created. Ten million of those were for solar renewable energy certificates—10 million out of 19 million.

Whilst the government have said this six million will not kick in until 2015, effectively what it has said is that you will get the $40 price for small-scale renewables out to 2015. But, clearly, if the rate of growth is as anticipated based on what occurred last year and is replicated in coming years, the six million is going to act as a cap, and it is an indication that by 2015 the price that you would get for solar is likely to be reduced probably to $20. If this happens, it is going to actually massively restrict the contribution that solar can make to a renewable energy future in Australia.

I have real concerns about this. This was not something that was canvassed with the industry. I understand the coalition wanted a hard cap. It would have been an absolute disaster, I have to say, Senator Birmingham, if that had been introduced. A hard cap would have meant everybody would run hard up to the cap and then there would be a complete collapse. By introducing this soft cap by 2015, the government have actually introduced uncertainty when the whole point was to give the industry, both large and small, certainty into the future.

How can you make a decision about investing in solar, when you know that in 2015 the price is likely to be halved? Given the current rate at which solar, and the number of certificates it is accessing, is expanding, what is going to be the situation then? I would like the minister to respond to that. The industry is now rather concerned because they thought the legislation was coming back to the Senate to be split, to give certainty to the large-scale sector and to make it unlimited for the small-scale sector. Now, having taken the uncertainty out of one end, the government have potentially introduced it at the other end.

I appreciate the government’s support for this amendment. I think everybody in this chamber and in the industry generally recognise that things are moving so fast there has to be a regular review of everything about the operation of the renewable energy legislation. Hopefully, we will now be legislating for the review. But I take this opportunity to ask the minister to explain in more detail why the six million soft cap will not introduce uncertainty for the small-scale sector. Can the minister give some clarity around the government’s thinking and provide some reassurance to that sector that the intent is not to cap the contribution that solar can make and that the effect will not be to do that?

I move Greens amendment R3 on sheet 6114 revised:

(R3) Schedule 1, item 99, page 59 (lines 16 to 21), omit the item, substitute:

99  Section 162

Repeal the section, substitute:

        (1)    The Minister must cause an independent review of the following to be undertaken as soon as practicable after 30 June 2012 and every 2 years after that date:

             (a)    the operation this Act and the scheme constituted by this Act;

             (b)    the operation of the regulations;

             (c)    the operation of the Renewable Energy (Electricity) (Large-scale Generation Shortfall Charge) Act 2000;

             (d)    the operation of the Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Act 2010;

             (e)    the diversity of renewable energy access to the scheme constituted by this Act, to be considered with reference to a cost benefit analysis of the environmental and economic impact of that access.

        (2)    A review must be undertaken by a person who, in the Minister’s opinion, possesses appropriate qualifications to undertake the review.

        (3)    The person undertaking a review must give the Minister a written report of the review before 31 December in that year.

        (4)    The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the report is given to the Minister.

        (5)    The report is not a legislative instrument.