Jenny McAllister (NSW, Australian Labor Party) Share this | Hansard source

It's not a bad place to pick up the debate. Senator McKenzie has argued for a practical approach to energy policy grounded in facts—I think the facts mightn't be a bad place to start. The whole premise of the debate set out by those thought leaders from One Nation is that we have to choose between dealing with climate change and having a manufacturing industry. They're just wrong. They're wrong about this, as they are about many other things. This particular proposition is particularly irritating, because it's not grounded in any facts whatsoever. Bloomberg New Energy Finance—they're the people you might commonly look to in the market for a market-led assessment of what's viable in energy investment—state that the levelised cost of energy of new ultra supercritical coal in Australia will cost between $134 and $203 a megawatt hour. They are very big numbers if people are seriously contemplating investing in new coal-fired energy. By contrast, they put solar at between $78 and $140 a megawatt hour, new-build wind at between $61 and $118 and combined cycle gas at between $74 and $90 a megawatt hour. They sensibly make the observation that new coal is not a viable solution for the pressing need that we have in the energy market, which is to replace our ageing infrastructure. Bloomberg further consider the fact that when you are looking to invest in these very carbon-intensive industries there are real risks—reputational risks, financing risks, regulatory risks—associated with the very high carbon emissions that come from these technologies. They go on to say that even if the government were to completely de-risk coal by paying for the whole plant and guaranteeing an exemption from any future liabilities the lowest levelised cost of energy that could be achieved is $94 a megawatt hour, well above solar, gas or wind.

These are the facts on the ground that the ideological advocates for new coal, sitting mostly up in that back corner of the chamber, need to contend with. Their assertion that this will present a cheap alternative is simply not true. It's simply not true and it's a mark of how far the debate has descended in the coalition party room that the people peddling these untruths are allowed to continue to lead the debate while the more moderate voices sit silently. I do note that every time one of these debates takes place in the Senate, we never hear from the moderate voices. We never hear from the cabinet ministers. We just hear from the people who have no commitment to facts, who are simply committed to repeating the ideological and untrue proposition that new coal-fired power presents any solution whatsoever to Australia's energy problems.

Bloomberg also engaged, earlier this year, in a wide-ranging speech with some of the propositions around reliability and the characteristics of coal that are said to make it so important for maintaining stability and reliability in the NEM. They say we can no longer accept the assertion that coal's base-load characteristics make it inherently more desirable. They say:

In the grid of the not-too-distant future coal’s baseload operation becomes a curse, not a blessing.

The fundamental control paradigm of grids is changing from base load and peak to forecast and balance. The balancing component will require more flexible or firming capacity, not base-load. Gas-fired generation is much better suited to providing the flexibility to this system than coal and it can provide it at a much lower cost.

This group of people up in the back corner of the chamber, in One Nation and the National Party, are living in the past. They are not engaging with the reality of new energy technologies; they are not engaging with the reality of the NEM. They are propagating, essentially, a kind of culture war around energy, where the facts matter much less than what, for them, has become a kind of cultural significance of coal, a cultural attachment to coal. That'd all be very touching and sweet if it weren't being allowed, by the weakness of this Prime Minister, to drag the entire national debate off course.

The thing is that it's not just One Nation proposing new build in coal; it's also Senator Canavan, newly returned to the front bench of this government. He was up again today talking about it and citing, in support of his arguments, a report produced by the Queensland government that, he alleges, supports his ideas. I've done a bit of checking on that, and it is true that the Queensland government engaged a consultant to look at all of the options. That's a sensible thing to do, right? If you're the department and someone's put up a proposition about new coal-fired generation in North Queensland, you might want to go and have a look.

What did they find? They found that an ultra-supercritical coal power station in North Queensland would only be viable under sustained high wholesale energy prices over the 40-year life of the plant, where the wholesale price is maintained at $75 per megawatt hour. They also found that if you introduce a carbon price, say $40 a tonne, the whole thing becomes completely unviable. They highlighted that there are significant risks associated with the development of such a plant, including a real risk that it would become stranded, a white elephant, during changing market conditions. It would be highly exposed to the introduction of a federal carbon price, and this would inhibit the ability for any such plant to obtain finance and maintain value over the life of the plant. It doesn't sound like a good investment to me, not even a little bit. But that is the proposition that One Nation is taking to the election, and, from the sound of it, that is the proposition that the LNP is putting to Queenslanders.

The sad truth is that we are in the midst of an energy crisis, and it is entirely the making of this government. Our investors in the energy sector have been crying out for stability. They have come before committee after committee, review after review, and they've said, 'What we need is a clear set of investment guidelines that are realistically aligned to the carbon reduction task that the global community will expect us to perform.' And they've been waiting for a set of settings just like that for four years, from this government. The truth is that, under the previous Labor government, we did have a clear framework in place to manage the National Electricity Market and reduce carbon, and, in a fit of pique and through a series of entirely opportunistic decisions, the whole thing was dismantled under Mr Abbott.

The coalition have been crab walking sideways towards re-establishing something since they realised the scale of the catastrophe they created. Mr Turnbull—who previously, as we all know, supported emissions trading—kind of floated, through Mr Frydenberg, the idea of an emissions intensity scheme, but that lasted a full 24 hours before it was knocked over by the dinosaurs in the hard Right of the party room. They then fiddled around for a while with Mr Finkel's report, and he, helpfully, tried to support the government by coming up with a clean energy target. That was something that everybody thought was entirely sensible as well, but it couldn't survive the coalition party room. They then came back again for a third go, with a proposition called the NEG, the National Energy Guarantee, which appears to be something that was cooked up in the space of five or six weeks by the Energy Security Board and constitutes an eight-page letter containing a set of ideas to be referred to COAG. This is the sum total of the energy debate in the four years that the government has had to consider this issue and to resolve the pressing investment questions that are facing the sector. There's no point coming in here and bleating about manufacturing and high energy prices if you're sitting over there. If you've been sitting over there and providing support to this government day after day in this chamber, you have to take responsibility for the decisions that they've taken—and the decisions they've taken are precisely none. This is a government entirely paralysed by its own divisions, and it is failing Australia.

Question agreed to.