James Paterson (Victoria, Liberal Party) Share this | Hansard source

Mr Acting Deputy President Bernardi, I have noticed, on occasion, a wry smile pass your face during this debate, indicating you have enjoyed the debate so far this afternoon. I hope you enjoy my contribution as much as you have enjoyed the previous contributions.

We are here today debating this MPI because on the weekend a grassroots political party, our valued coalition partner, the National Party, engaged in a grassroots political debate about a weighty policy issue facing Australia. Unlike others who have spoken in the debate so far, I'm not going to condemn the National Party for confronting these issues; I'm not going to condemn branch members from the National Party for raising these issues. They are doing exactly what they should do as active citizens in our democracy, helping their political party to deliberate on these very weighty and difficult issues. I congratulate them for tackling this issue, for proposing a solution, and for debating it in such a constructive way.

I also want to congratulate my colleague Senator Williams for his excellent contribution to this debate. I particularly want to single out his fact-filled response to Senator McAllister's claims about China. In a sense, Senator McAllister is right: China is investing at a record level in renewable energy. But Senator Williams is also right: it is also investing at a record level in coal. It is investing in coal by building new coal-fired power stations, and by retrofitting existing coal-fired power stations to make them more efficient and to extend their life. China is investing in all forms of energy on a massive scale, because they are a country with massive energy needs and they need to increase their energy. They have taken what you could perhaps call an energy-agnostic approach, or an 'all of the above' approach, and they are investing in every form of energy available. Curiously, that's similar to the approach that this government has taken. This government adopt an 'all of the above' energy policy approach, where we are willing to invest in and support all technologies that can help meet Australia's energy needs. So it was curious to see Senator McAllister raising China as an example contrary to the direction the Australian government is taking.

The statement of the MPI listed for debate today is really a statement of the obvious. Is there anybody who opposes the statement: 'Investment in renewable energy, which makes economic and environmental sense? In fact, is 'renewable' even a necessary word to have in that sentence? We all support investment in energy which makes economic and environmental sense, or at least we should. The sad fact is that some participants in this debate don't support the investment in energy which makes environmental and economic sense if it clashes with their ideological opposition to and hatred of traditional sources of thermal energy, including coal and gas. We saw a very good example of that earlier from Senator Hanson-Young. Of course, I suspect what the Labor Party are getting at in their motion is not really that we should all support investment in renewable energy which makes economic and environmental sense; I suspect what they are really getting at is that we should support investment in renewable energy whether it makes economic sense or not. It all depends, of course, what we mean by economic and environmental sense.

For the record, I should say that I'm excited by the technological developments and evolution in renewable technology. I think there's been some fantastic progress already made, and there's no doubt that there have been significant improvements in the efficiency of renewable energy, and that is a really positive thing. As a sidenote, there have been improvements in the generation of energy not only in the renewable space but also in the traditional forms of energy production. That is why we have seen the advent of so called high-efficiency, low-emissions, ultrasupercritical coal-fired power stations, which generate energy far more efficiently, far more effectively, and with a lower environmental burden than their predecessors did.

But although there have been some exciting developments in renewable technology, and although there no doubt will be more in the future, I think we also have to acknowledge that there are some limitations to renewable energy today. We should be honest and confront that. One of those limitations is their inability to provide reliable, consistent baseload energy, and we have seen this most powerfully in South Australia. As we all know, on a great day—a windy day—the South Australian wind farms can produce up to 120 per cent of South Australia's energy needs and export its energy elsewhere. But we also know that, on a bad day—a day that's not windy enough, or too windy—South Australia's wind-energy generators provide no energy at all to South Australia, and put it in a very perilous state indeed. Until we can figure out how we can efficiently and, crucially, affordably store energy generated by renewable energy power forms on a large scale, then it can never supply all of our baseload power needs. Obviously, the government is taking a really important and bold step in this direction by supporting the further development of the Snowy hydro scheme, which will allow it to store more energy and supply it at times of critical need. But we all admit that that's not going to be a silver bullet and, on its own, won't solve this problem.

The reality is that renewable energy today, as we know it, is intermittent and unreliable. It doesn't provide that traditional and reliable baseload power that only thermal power like coal and gas does. So, if we're talking about the economic sense that we need to justify an investment in energy, there is always going to be, and there will be for some time, a big role to play for traditional power sources, I think, for the foreseeable future.

I think it's also important that we consider cost. There's a very common refrain in this debate—and we saw it a bit from Senator McAllister earlier—that renewables are cost-competitive or sometimes even, they claim, cheaper than traditional forms of electricity. And, if that were the case, that would be a wonderful thing. But the same people who say that renewable energy is cost-competitive or, indeed, cost-advantageous compared to traditional forms of energy also say—whenever anybody suggests that perhaps we should look at the generous subsidies that the renewable energy industry has received in recent years in Australia—that, if we touch it in any way, let alone scrap it, the sky will fall in and the renewable energy industry, as we know it, will collapse. Now, those two ideas are contradictory: they cannot both be true. If renewable energy was competitive or indeed cheaper than traditional forms of energy, it would need no support through subsidies or government mandates and it would exist healthily and on its own perfectly fine, if they were removed.

The truth is: we know that renewable energy does require a lot of assistance in order to be competitive and, hopefully, with technological development and change in the future, it will be able to stand on its own two feet. But it is false to say that it is able to do so now.

Another very common refrain in this debate is that what we lack today is certainty and, if we provided certainty for energy industry investors, these problems would be solved. The truth is that we do have certainty for some energy industry investors and we have a lack of certainty for others. The energy industry investors, who have certainty, are those who want to invest in renewable energy, and that's why billions of dollars are being invested in renewable energy in this country year after year after year. At the moment, it's at record levels. They've got the certainty of knowing that, if they make an investment in renewable energy, they will be in part protected by the government to ensure that they get a good return on their investment. Those subsidies and protections in the form of policies, like the renewable energy target, ensure that they've got their certainty. So there has been no shortage of investment in renewable energy.

There has, however, been a shortage of investment in traditional forms of energy generation, and that's why, for about a decade, no new coal-fired or gas-fired power stations have been built in Australia. They lack certainty because they know there is a great risk that in the future there will be a Labor government and that that Labor government will hit them with a carbon tax, an emissions trading scheme or an emissions intensity scheme. They know at some point that that will come and, when they have to get a return on their investment over 30 years, that's a very serious prospect indeed. So these are the people who have lacked the certainty to invest, these are the people who have been absent from the market. It is telling that even South Australia's Labor Premier Jay Weatherill recognises this problem and, in order to get around it, has proposed the extraordinary step of effectively renationalising the electricity industry in his home state by building a government-funded, gas-fired power station.

So the idea that, if we provide even more certainty than already exists for renewable energy investors, this problem will somehow be solved, that prices will come down and that we'll have the reliability we need, is a total furphy. If you want to get prices down, you need to provide certainty for everyone, and that includes our traditional forms of power generation.