Sean Edwards (SA, Liberal Party) Share this | Hansard source

I rise today to speak on the Renewable Energy (Electricity) Amendment (Excessive Noise from Wind Farms) Bill 2012. It would come as no surprise to Senator Madigan that I have strong views on this bill and it would also be no surprise to him that I am taking an active interest. I cannot proceed with my presentation to my Senate colleagues without addressing a number of issues which came up with Senator Di Natale's presentation over the last 20 minutes, given that the first 10 minutes of his presentation was a rambling discourse on the effects of science on everything that matters in life. That is very important, but I fail to see how trying to draw the link between the evolution of science and the way in which it is presented is helping his cause here, because that is the very issue this bill is looking to address.

I say from the onset that the proposed coalition amendment throws the onus back onto that issue of science. Basically it would rely on a report to be commissioned by the National Health and Medical Research Council onto the science of effects of this proliferation of wind farms. I hear all the emotive issues like Meniere's disease and tinnitus. I am not going to speak too much about that, but will address how the case was put to me very simply by a prominent sound engineer who has done work on these wind farms and also for most of the government agencies around the country over the years on issues of sound and its effects on the community. I think we have to be very careful to keep this argument simple because it does get clouded with complexity.

This man said to me, 'Senator Edwards, this issue of infrasound is something which does not affect everybody. Let me put it to you this way: if you and I put to sea on a moderate day and you get seasick and I don't, why is that?' I pondered the question. He said, 'That is the same as infrasound.' The cynical people who do not experience the effects of infrasound sit in judgement of those who do experience it. Let us be very careful when we are talking about the science, because science is something that you can hide behind. This is something that does not affect everybody.

With our amendment—it is a credible amendment; it is not something that should be baulked at by anybody here in this chamber—and a competent agency, and none are more competent than the National Health and Medical Research Council, to undertake with strict terms of reference an inquiry into this issue we will hopefully address the facts, rather than involve ourselves in this political discourse which pits science agencies against each other, depending on who is paying. It is the old story: you can get a very, very credible independent expert's report as long as you are paying.

Let me move on. On this area of renewable energy, everybody who has been listening to my comments and contribution knows that my issue has not been on wind farms and has not been around the issue of health—although I believe it is something that should be addressed and will be addressed, if our amendment is adopted. My issue is that the complexity of the argument of wind farms has 99 per cent of the Australian public completely disengaged. They are completely disengaged because they switch off. It is because of the issue at the very heart of wind farms, which is the 20 per cent renewable energy target.

We are committed to renewable energy at the coalition, but it has to be equitable, it has to be spread around this country and there has to be a network in which we can fully take up the benefits of renewable energy. Last year, I sat in on the Select Committee on Electricity Prices' inquiry. I can assure you, it is a very complex area across this country and one which the average Australian cannot get their head around. I will tell you why: to compare the cost of electricity generation—if you can compare it technology to technology—they use a mechanism called the levelised cost. I warn anybody who is listening that they will have to pay attention here, because the basis of renewable energies and the premise of how it is structured is based on this. I will get into acronyms a bit later too. The levelised cost of energy—the LCOE—is the most transparent metric used to measure electric power-generating costs and is widely used as a tool to compare the generation costs from differing sources. The levelised cost of energy, the LCOE, is a measure of marginal costs—that is, the cost of producing one extra unit—of electricity over an extended period. It is sometimes referred to as long-run marginal costs or LRMC.

The LCOE is representative of the electricity price that would equalise cash flows—that is, the inflows and outflows—over the economic life of the energy-generating asset. It is the average electricity price needed for a net present value, or an NPV, of zero when performing a discounted cash flow, a DCF, analysis. With the average electricity price equal to the LCOE, an investor would break even and so receive a return equal to the discount rate on the investment. The LCOE is determined by the point where the present value of the sum discounted revenues is equivalent to the discounted value of the sum of costs. The analysis of the levelised cost of electricity uses a set of core economic parameters and assumptions to enable a relatively consistent comparison of electricity generation technologies.

These assumptions have had a significant impact on the LCOE calculation—with assumptions about interest rates and policies such as carbon taxes et cetera, which all remain important in any calculation that is based on the economic life of the asset. Who could not be absolutely compelled by that argument? You wonder why people just pay their electricity prices and do not get involved in this discussion about renewable energy! The people that do get involved in this discussion are the people that are affected. That is the people who are affected both visually and regarding their health, which you cannot ignore. Senator Di Natale quite rightly said that those people should be heard—excuse the pun—because any pain should be addressed. As I said earlier, the pain is not experienced by everybody but cannot be ignored by anybody.

The people of Australia are unwittingly paying both high social and economic costs to produce wind energy. This bill is important for ensuring a sustainable balance can be struck between those interests of both local communities and wind farm developments, while still meeting Australia's 2020 commitment to renewable energy targets.

In in my home state of South Australia, we have had significant firsthand experience with wind farms. At Waterloo near my hometown of Clare, in the state's mid-north, TRUenergy announced plans only six months ago to add six new wind turbines to its existing Waterloo wind farm. It is a project worth about $40 million. So it is an issue for me and it is very close to home. It is also an important fact—and if anybody has followed my comments on this they would know—that South Australia accommodates nearly half of the wind power that has been installed to date across the country. Not insignificantly or surprisingly, this has resulted in significant increases in electricity prices throughout the state in recent years. South Australia has the highest rate of electricity in this country. It nearly parallels those with the world's highest power costs.

Senator Ludlam interjecting—

I will take interjections at any time from the Greens, if there is some credible thing that they would like to say about this. But the economics of it is that, with the rising cost of living, Australians are struggling to pay their power bills. You can ignore it as much as like and you can surround it with as much science as you would like to produce—

Senator Ludlam interjecting—