Nick McKim (Tasmania, Australian Greens) Share this | Hansard source

I rise to speak briefly about the report into the Tasmanian energy crisis. We have had a bit of rain in the last four or five days down in Tasmania, and the dams were actually 0.2 of a per cent fuller yesterday than they were one week ago, up from 12.8 to 13 per cent. No doubt Minister Groom, the Minister for Energy in Tasmania, is happy with that, but I have some words of warning for him: he is nowhere near out of the woods yet in terms of the energy crisis. He is spending like a drunken sailor, trying to keep his own job, and he is spending taxpayers' money doing it. We are looking at, on his own words, about 220 megawatts of diesel generation that will be in place in Tasmania within just a few short weeks. That is coming at a cost of $44 million in installation and lease costs and $11 million per month, per 100 megawatts, for the diesel generators. In round terms, we are looking at around $25 million a month to run those generators.

Hydro Tasmania's balance sheet, last time I looked, had that government business carrying about $860 million worth of debt. The minister has been clear that Hydro will have to carry the costs of the response to the energy crisis. Hydro is forgoing revenue from the major industrials, who are on power rationing in Tasmania, as we speak. We are losing jobs, as we speak, from the major industrials. They are on power rationing. Hydro Tasmania is losing revenue because of course it is not able to charge for power it is not delivering to the major industrials. What is the cost of that to Hydro Tasmania? The minister claimed not to know, when he was interrogated by the Senate inquiry. So we have got a $44 million establishment cost and about $25 million per month to run the diesel generators. On the minister's own figures, we are somewhere in the region of $100 million already that is on Hydro Tasmania's balance sheet. That is an increase already of 10 per cent in the amount of debt that Hydro Tasmania is carrying. Into the future, as we go forward, we are looking at—if the diesels are operating at full capacity—about $25 million a month. So, for every four months that they are operating at maximum capacity, Hydro will put another $100 million on the debt side of its balance sheet.

The question has to be asked: what is the level of debt in Hydro Tasmania that this minister and the Treasurer, the other shareholder minister, are prepared to sit by and watch? Where is the cut-off? Is it around $1 billion? Hydro have actually carried over $1 billion of debt in the past. They have managed, over the last 10 or 12 years, to pay that down, notwithstanding successive governments applying a special dividends policy and obtaining money from Hydro Tasmania to fund schools and hospitals in Tasmania. I ask here tonight—rhetorically, I know: where does the line lie; where have the shareholder ministers drawn the line in terms of Hydro Tasmania's debt?

One thing that you can be sure of: the Tasmanian taxpayers and the Tasmanian electricity consumers will be paying through their pockets for this response to the energy crisis.

How did we get here? Yes, as the minister said, there was a drawing down of the dams under a previous Labor-Green government in Tasmania, but it is worth pointing out that at the change of government in Tasmania—when the Liberals assumed office in 2014—the dams were above 30 per cent—that is, three zero per cent. When they were handed over they were above 30 per cent. What has happened in the interim is that this minister mothballed the Tamar Valley Power Station, which is a gas-fired electricity generator in Tasmania. They continued on the occasional day and on occasional moments in the National Electricity Market to draw down the dams and export power south to north over the Basslink cable. So, yes, there are legitimate questions to be asked about the long-term, but in the last two years we still have seen electricity exported south to north over the Basslink.

Interestingly, until the Tamar Valley Power Station was fired back up during the turn of the year between 2015 and 2016—so December-January just gone—we had a lengthy period of time where Hydro Tasmania were barely operating that facility at all, thereby having the dams draw down at a faster rate than they otherwise would have been had the Tamar Valley Power Station been operating. You have got to ask yourself why that is the case. I would submit very strongly that the Tasmanian government's dividends policy and last year's state budget made it clear that in the fourth year Hydro Tasmania would have to pay a $75 million dividend to the Tasmanian government. That dividends policy placed pressure on the Hydro board to raise cash. They have got a take-or-pay contract for the gas that is associated with the Tamar Valley Power Station. Instead of burning that gas and keeping the dams higher than they otherwise would have been, Hydro were selling that gas on the mainland spot market. I have no doubt that that is what happened. In fact, I put that to Minister Groom during the committee, and Minister Groom said this:

I certainly understand why you have asked that question. I understand why there is interest in it.

My word, there is interest in it, Minister Groom! Tasmanians want to know why you mothballed the Tamar Valley Power Station. They want know why you allowed, and, in fact, placed pressure on, Hydro Tasmania to raise cash, and why you allowed Hydro Tasmania to sell that gas onto the mainland spot markets. We have had no leadership on energy conservation from the minister on domestic consumption or small- to medium-sized business consumption, we have had a shocking lack of engagement with major industrials—which the committee has heard evidence about—and we have had no leadership on encouraging rooftop solar panels on homes and small businesses in Tasmania.

Because I want to give my colleague Senator Wong an opportunity, I am going to end my contribution with this thought and this message to Minister Matthew Groom of Tasmania: in five or 10 years' time the energy supply sector right around Australia is going to look very, very different than it does today. The advent of electricity storage technology that can be embedded at a local and small scale in Australia, through improvements in battery technology and in cost and efficiency of solar panels, is going to transform the way the energy supply sector works. We better all wake up to it, because it is coming to homes and small businesses near us.