Tim Storer (SA, Independent) Share this | Hansard source

The focus of this MPI is on electricity prices, but, for many, it is electricity bills that are more important. Reducing electricity prices is one way to bring down energy bills, but not the only way. Improving the energy efficiency of houses, for example—as my private senator's bill currently before the parliament seeks to do—will significantly reduce household power bills by addressing demand as opposed to supply. The bill offers landlords a tax offset of up to $2,000 a year for energy efficiency upgrades to their rental properties. More energy-efficient houses will use less electricity and have smaller electricity bills—it's that simple. And that's why I believe my legislation should be supported.

But the government also needs to take steps to reduce electricity prices, as that will flow through to bills. Basic economic theory tells us that increasing supply of a commodity to a market will reduce the commodity's price. If we want to maintain downward pressure on electricity prices, we must increase supply. But, unless we want the government to go it alone, we must establish some policy certainty so that the private sector has the confidence to invest.

As we have seen through the success of the renewable energy target, the private sector will happily invest in new supply, provided the right policy environment is in place. Currently there are 54 renewable energy projects either under construction or soon to start construction in Australia, delivering $11.2 billion in investment and creating nearly 8,000 jobs, including over 1,300 in my home state of South Australia.

Let's not be naive. History shows us that achieving policy certainty on the intrinsically interconnected issues of energy and climate change has been exceptionally difficult. That's why I'm deeply disturbed by the government's abandonment of the NEG. Whilst not perfect, it was a workable framework and had the endorsement of a critical mass of key stakeholders, as well as most MPs and senators. Importantly, it also provided a platform for reducing emissions in the electricity sector.

Climate change is not going away, and, as one of the richest and most high-emitting nations per capita on earth, we must do our fair share. Any energy policy that fails to also deal with the issue of emissions will be dogged by continuing political uncertainty. That is why the private sector will not invest in coal-fired power stations in Australia going forward. The carbon risk of an asset that will cost $3 billion, take eight years to build and operate for 50 is simply too high. The good news is that solutions to decarbonising our electricity sector are also solutions to our high energy prices. The government's NEG modelling found that $400 of the $550 forecast to be saved would be due to renewable energy investment under the NEG, and modelling by RepuTex Energy from July found that 45 per cent would drive down wholesale prices. So a higher emissions reduction target means more supply and lower electricity prices.