Ron Boswell (Queensland, National Party) Share this | Hansard source

Before my time was cut short, I was making an argument to the Senate about what renewable energy was doing to Australia's manufacturing industry. With a combination of carbon tax and renewable energy, the actual use of energy has dropped by 10 per cent. The Labor Party and the Greens have been absolutely and spectacularly successful in stopping carbon, but the downside of that is that they have destroyed hundreds of thousands of jobs in the manufacturing sector. You all ought to stand up and take a bow because, when you introduced the carbon tax, you said the use of energy would be reduced and the use of carbon would be reduced. That is 100 per cent correct, but you have left a wake of disaster out there behind you: jobs lost, industries closed down and industries leaving Australia and heading for New Zealand, China and so forth where they will still create a carbon footprint. Maybe there is some excuse for the Greens: forgive them, for they know not what they do. But you in the Labor Party should know what you are doing, because you say that you are going to represent the blue-collar workers of Australia. If ever there were a sell-out of the blue-collar workers, it would be a carbon tax and renewable energy.

There is a $600 renewable energy tax and a carbon tax on Holden and Toyota. It is no wonder that they are running up the white flag and heading overseas. Of course, SPC, the last of the canneries in Australia—the last of the Mohicans—is fighting to stay in Australia. This is not all because of the carbon tax—I would be less than honest if I said that—but the carbon tax and renewable energy are playing a huge role. I cannot for the life of me understand what you are doing and why this is a complete sell-out. However, I will address the carbon tax when the bill comes before the house. I want to continue with what I was saying about the RET.

Right now, RET is costing us around $2 billion a year. By 2020, that will have gone up to $5 billion a year. Much of the cost of renewables comes from those subsidised under the Small-scale Renewable Energy Scheme—in particular, residential rooftop solar photovoltaic panels. Solar PV is dealing a heavy blow to industry. While it may be the case that the huge residential uptake of solar PV has seen some householders enjoying lower power bills and generous subsidies, this has come at the cost of everyone else. These subsidies have come from someone; someone has had to pay. In this case, what you have is a massive wealth transfer where business is being forced to subsidise the household sector and where low-earning householders are being forced to subsidise those rich enough to afford solar panels.

In both cases, what it comes down to is network charges. Solar PV owners do not have to pay the cost of building and maintaining electricity networks, which make up half of the typical power bill. However these householders must still draw from the main grid during times of the day when their solar panels are not generating enough electricity, and the rest have to pay. The Energy Supply Association of Australia estimates that solar owners are avoiding network charges of $340 million a year, and rising, while feed-in tariffs schemes are adding $680 million a year, the cost of which is being met predominantly by non-solar households.

In short, because solar PV owners do not have to pay for the poles and wires making up the electricity network, you have consumers who do not have solar panels cross-subsidising those that do. The commercial sector, meanwhile, is paying hundreds of thousands of dollars to meet small-scale targets that have no bearing on their industrial capacity. It is a bit like the last three blokes at the bar being forced to pay the bill for 30 people who were drinking champagne earlier in the night. Despite the small-scale renewable target being scheduled to go down, the cost burden of solar on our communities will only go up as more solar panels are purchased and the price of small-scale technology certificates continue to rise.

The knock-on effect of renewables goes beyond higher electricity bills. Solar and wind are undermining our established utilities and replacing them with less reliable and much more expensive power sources. In the latest national forecasting report, the Australian Energy Market Operator revealed that electricity demand was declining faster than predicted. Its forecast for 2013-14 was 2.4 per cent lower than for the previous year. It stated that increased rooftop PV and systems had offset growth in residential, commercial and light industrial energy. Between 2008 and 2009, and 2012 and 2013, rooftop PV output grew 230 per cent. In the same time frame, total residence and commercial power consumption fell by an average of one per cent a year. Listen to it Greens—one per cent per year! You have done particularly well: you have lowered the electricity output but you have destroyed hundreds of thousands of jobs. It is a drop that the AEMO has not seen since the NEM commenced.

Much of that comes from continued industrial closures that are seeing demand plummet. With demand continually falling, the current fixed large-scale renewable target of 41,000 gigawatt hours would represent around 26 or 27 per cent of the forecast demand in 2020, rather than 20 per cent. The decrease in demand means that we are on track to spend billions more than necessary to achieve the 20 per cent target. It has been estimated that reducing the current large-scale renewable target from 41,000 gigawatt hours to a real 20 per cent target of no more than 33,000 gigawatt hours would reduce annual costs from $5 billion a year to $3.7 billion by 2020.

Decreasing demand has also destabilised our electricity grid. First, you have the gas-fired power stations that produce cheap and more reliable electricity sitting idle because the RET favours electricity generated by renewables. However, the gas plants need to operate at a certain capacity in order to be economically viable—meaning keeping them open but unused is uneconomical for the operators.

Second, you have renewables dumping more power in the electricity grid than is required by demand. This is why turbines must be shut down or shut off especially on windy days, because they are generating too much power and they may overload the grid. This can lead to ludicrous situations such as what occurred in Germany this year. On 16 June its wholesale electricity prices fell to minus €100 per megawatt hour. The power generators were paying managers of the grid to take their electricity off in order to keep the grid from overloading. The grid was only able to cope with the maximum of 45 gigawatt hours at a time without becoming unstable. Generators at the time were pumping in 51 gigawatts hours, 29 gigawatt hours of that from solar and wind.

Because it is much more difficult to reduce output from solar and wind generators, the burden of adjustment fell on gas-fired and coal-fired stations, whose output was reduced to only about 10 per cent of capacity. What you have here, again, is renewables reducing the viability of reliable electricity generators.

While the situation in Australia may not be so bad that our power prices are going negative, it is certainly the case that renewables have destabilised power grids across the country. In Western Australia, rooftop solar panels are so popular they are threatening to overload grids in a growing number of country towns. This has forced the state government to ban new solar installations. Renewables are a big problem not only when they generate too much power but also when they generate too little. What you have is coal-fired stations, which remain an order of magnitude cheaper than solar and wind, still having to prop up solar and wind. Because current renewable technologies are unable to store more than a fraction of surplus energy, the gaps in power generated from renewables must be filled by coal. This happens whenever there is too little or no wind or sunlight, meaning that the fossil fuels must always be on standby to avoid power drop-offs. It is estimated that around 1,000 megawatts of standby power from fossil fuels is burned to keep the coal and gas plants available as a baseload. This negates nearly all wind generation in Australia over an entire year. The fact is that, with every new wind turbine and rooftop solar panel, more coal is automatically being burned and more carbon dioxide is being emitted.

So renewables are not helping one bit to lower carbon emissions. There would still be an argument for them if they reduced the cost of electricity. But, as I have already outlined, for industry renewables have been a ball and chain that have sent electricity prices skyward, while those households without solar panels are paying more and more on their power bills to cover those with solar panels. We are now a country living well beyond its means. Our blue-collar workers enjoy some of the highest wages in the world, and that must not change. We should do our best to provide workers with the best we can afford. In that case, the only way we can compensate industry and keep our manufacturing viable is by keeping our energy cheap. Instead, we are throwing away our major competitive advantage in favour of a policy that sends electricity prices soaring while reducing demand via industry closures that are happening left, right and sideways. At the same time, incredibly, the RET is actually pushing up carbon emissions. It is madness perpetrated by the Greens. I would go so far as to call it economic treason. We have betrayed our manufacturers by taking away their natural advantage of cheap, abundant energy and forcing them into the rigmarole of expensive, unreliable renewables.

We must get rid of the RET before it can cripple manufacturing any further. We could lower the target to a 'real 20 per cent' figure, but, as I said before, this would only lower the annual cost of renewables from $5 billion to $3.7 billion by 2020. Better yet, we should halt all new investment in renewables and allow only existing and committed projects to proceed as subsidised. This would lower the annual renewables cost to $1.7 billion by 2020. Our best option would be no compromise at all and abolishing the RET altogether. If renewables are truly as viable as claimed, they should be able to stand on their own two feet after subsidies for all renewables projects have been removed. If instead we choose to continue penalising businesses and households with higher and higher power prices then all we will have done is committed economic treason against our country. The people of Australia deserve better.