Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on the Renewable Energy Amendment (Feed-in-Tariff for Electricity) Bill 2008. In so doing, I would like to say first of all how appreciative I am of the work that went into this legislation in the Senate committee process and in the submissions that were received on this legislation. As a result of a considerable amount of consultation and work on the bill, I have incorporated a lot of the concerns and recommendations from the committee hearings on this bill. It is with considerable pleasure that I take this opportunity to address the Senate on this Greens legislation. It is entirely appropriate that we are addressing this bill this afternoon. Overnight, the International Energy Agency released its report saying that if we continue as we are, we are looking at a six-degree rise in global temperature. The report also indicated that the age of cheap oil is over. So it makes absolute sense for Australia to move as rapidly as possible to address our greenhouse gas emissions, to reduce our dependence on foreign oil and to stimulate the Australian economy at this time when the flow-on effects of the global financial crisis are already quite clear and there are ominous signs in some sectors for employment.

Just two weeks ago in London, the Green New Deal was announced. Leaders such as Prime Minister Gordon Brown, President Nicolas Sarkozy and UN Secretary-General Ban Ki-moon said that it is time for the world to use the opportunity provided by the financial crisis to invest billions into economies to get them going again and to invest in green technologies which will reduce climate change and improve the quality of life in cities around the world, especially where quality of life is somewhat compromised by high levels of pollution and lack of amenity. The Greens are a solutions based party when it comes to addressing climate change and peak oil, and we have the opportunity here in the Senate to provide a solution with a piece of legislation which, if enacted, can provide a framework for the rollout of a gross national feed-in tariff in Australia.

Some people might ask: how does a feed-in tariff work? Surely we have got a number of feed-in tariffs around the country already. A gross feed-in tariff works by enabling consumers to become energy providers—energy generators. It provides the financial mechanism for people to know that, whatever energy they produce, they will receive a fixed price for a fixed period of time. That can be at the residential level, the commercial level and through to the utilities-scale level. It is the mechanism that has driven the revolution in renewable energy in Germany. It is driving a renewable energy revolution in Spain and even in the UK, where they have tended to prefer systems such as an MRET system. The UK has recently acknowledged that the main driver of the deployment of renewable energy in Europe has been feed-in tariffs, and so the UK is likely to move to a feed-in tariff system.

In Germany, in particular, jobs in the renewable energy sector have increased to the point where there soon will be more jobs in renewable energy than in the motor vehicle sector—which used to be the major industry manufacturing sector. People have seen that this can provide them with the opportunity not only to switch to renewable energy but to make a personal contribution to climate change and get an additional stream of income. So you have farmers throughout Germany covering their winter barns with photovoltaics, for example, and local governments covering noise barriers and areas down the centre of highways with various types of renewable energy, particularly solar.

People can see that if you can borrow from the bank, knowing what the price of the energy is going to be for 20 years and knowing what your repayments are, there is certainty for financial institutions so they lend you the money. That is what has driven the process around the world. You have to ask yourself: why is it, in Australia, that we are not embracing a national gross feed-in tariff? A number of states have been waiting for the Commonwealth to act on this and several of them have gone ahead on their own. But the problem that we currently see with the state based legislation is that it is all different and it is overwhelmingly flawed and inadequate. To give some examples: in the states of South Australia, Victoria and Queensland, and in the case of Alice Springs and the ‘Solar Cities’, it is for photovoltaics only. That is not good enough. Why would you just pick photovoltaics? Why wouldn’t you enable all forms of renewable energy to be eligible for a feed-in tariff? Also, in some states they have decided to go with a new feed-in tariff rather than a gross tariff. With a gross tariff you receive the payment for all of the electricity that you export, and you pay the normal rates for what you import. So you receive that money as a generator and then you pay whatever you need for your consumption. That is by far and away the most effective method. And yet several of the states have not only restricted it to small-scale photovoltaics but restricted it to a net system where you only get the income from the difference between what you produce and what you use. In most cases, that is such a small amount that it is not a driver for deployment of the technology because it does not provide the opportunities for an additional income stream.

Why would you want to take it from residential through to utility? That should also be obvious. We do not want to restrict renewable energy to small-scale production. We want to bring on some of the larger scale new technologies. We want to bring on, for example, solar-thermal and geothermal. We know that a mandatory renewable energy target is not a sufficient mechanism to bring on those new technologies. In the case of wind, the mandatory renewable energy target will see a considerable rollout of that technology. But other technologies need additional support. Others will say, ‘If you bring in a gross national feed-in tariff, once you have set the tariff over a period, what about the additional cost across all the consumers on the grid?’ The answer is that you compensate in the same way as additional prices will be levied through the emissions trading system. Inevitably, if you increase the price of energy then you will have a disproportionate impact on lower socioeconomic groups, whether that is through an emissions trading system or a feed-in tariff.

What you need to do—and the government has already acknowledged this—is compensate low-income earners for the additional cost in their energy bills. Initially, the government and several of the NGOs were arguing that that compensation should be financial. From the very beginning the Greens have argued that the compensation should be in the form of energy efficiency by providing low-income earners with energy efficient technologies, such as solar hot water or full insulation, so that they permanently reduce their energy demand and therefore their power bills, rather than just providing cheques. Often there are so many competing demands on people’s finances that they spend the money and do not necessarily have it when the energy bill comes in. From our point of view, spreading the cost across the whole grid and then compensating lower income earners through ever-increasing efficiency measures is a much more effective way of dealing with the issue of cost.

It is a nonsense to say that the quantum of the extra cost is too expensive because, in Germany, it averages out to the cost of a couple of cups of coffee a year. So we are not talking about very much additional money on consumers’ bills, but we are talking about a revolution in renewable energy and a revolution in the number of jobs. That brings me to the next point. Barack Obama has already announced that he intends to spend $150 billion in the US over the next five years in driving a renewable energy revolution. He is doing it because he recognises that the US has fallen so far behind competitively in these technologies that, if they do not spend the money and move ahead now, they will have no manufacturing sector because the Chinese, the Europeans and so on will have moved so far ahead of them. That is one of the strongest arguments for getting behind the green new deal here in Australia.

Some people may not share the passion that many of us have for reducing greenhouse gas emissions, but we ought to at least share the passion for maintaining the Australian economy, building competitiveness and rebuilding the manufacturing sector. And to do that, we need to keep at home the best brains we have in our universities for the innovation and the commercialisation of those technologies, roll them out in Australia and then we can sell the technologies and the expertise overseas. That ought to be our aim and we should drive that through R&D processes and legislative frameworks, such as the one I am proposing, and we should also drive it through procurement.

The whole thing has to be internally consistent from the government’s point of view—you have a green car program, you commercialise the plug-in hybrids, then you use those to help support an increased load for renewable energy through intelligent distribution networks and then you also roll out your renewables so that you can electrify your car fleet. It is a perfect solution. It gets us off the coal addiction that we have and it gets us off imported oil. Those people who have been fiddling around the edges on the cost of fuel, with a few schemes to look into how the retail and wholesale issues are managed, are obviously not listening to the fact that peak oil is with us, but the price of oil will increase again to $150 and $200 a barrel before we know it. At that point we ought to have rolled out the technologies for electrification of the vehicle fleet and rolled out investment in public transport, which is another way of innovating in Australia—getting the economy going, creating jobs and leaving us with better designed cities and a better amenity in the environment.

It is necessary to point out at this time that of course the legislation has taken into account everything that has been said in the submissions that came before us and in the actual committee hearings. The bill has been amended, but it will need considerable support from the government in developing the regulations that go with it. It needs to be designed in such a way so that the state based schemes could transfer as quickly as possible so that the whole thing can be nationally harmonised.

It is a big mistake to leave this process to COAG. In March this year COAG decided that in October they would report on a harmonised feed-in tariff system. October came and they deferred it. Even in the message from COAG there was no reference to feed-in tariffs. We are going into another COAG meeting in November and it is critical that that COAG meeting puts feed-in tariffs back on the agenda. But it requires Commonwealth legislation.

Just as the mandatory renewable energy target is a national piece of legislation, so too is the carbon pollution reduction scheme. That is not being left to the states but is taking into account, for example, the New South Wales scheme. We should have national legislation in here in order for the states to come on board. Leaving it to COAG is a recipe for making sure it either does not happen or it does not happen in a timely way. And, if it ever does happen, it will be at the lowest common denominator because already some of the states are locking in second-rate, flawed systems and, worse still, rolling out the meters associated with the introduction of a feed-in tariff—meters that are suited to net metering and not to gross metering. The longer that this is delayed, the worse the scenario that is going to operate—where everybody spends money entrenching a flawed system and we never get to where we need to be.

This legislation essentially provides the Commonwealth with a framework for the minister to make the necessary decisions about the technology. It says that all forms of renewable energy ought to be eligible for a feed-in tariff but, if the mandatory renewable energy target has brought on wind to such a point, the minister could decide that there was a zero for the tariff rate for wind and so would confine it to the MRET process. It allows the minister to set the tariff. It gives the flexibility for the minister to change that tariff over time according to how the rollout of each of the sectors is going, so that those that are not being brought on as quickly as they might get a higher tariff after a while. If they are coming on very fast and everything is going well, it may be possible to reduce that tariff over time. That would clearly be the intent. The main point is that, once you have been given the tariff for a particular year, it is locked in place for 20 years so people have that certainty when they go to borrow the money from the bank.

The other advantage of the feed-in tariff is that everybody in the industry in Australia is 100 per cent behind it. There are no renewable energy companies in Australia who are saying this is a bad idea; they are all pushing for it. They all recognised the value of a rebate system when it was operating, and they all recognise the value of MRET, but they have all come on board, saying, ‘This is the kind of mechanism we want.’ You have everyone, from the smallest providers right through to others like BP Solar, saying this is the way to go. There is no-one in the renewable energy sector who is saying this is a bad idea. They are all on board, they all want to get going and they all want a national gross system as fast as possible. At the moment, the only road hump to getting there is that the government is standing in the way, saying the states can do it through COAG. That is not good enough, because we have a global emergency—six degrees if we do not change our ways.

This is good news for jobs, good news for the environment, good news for renewable energy and particularly good news for rural communities. In adapting to climate change, they can farm renewable energy, especially utility-scale renewables, out in some of the areas where they are most adversely impacted by the drought. They can go into joint venture or leasehold arrangements on some of these huge properties and to generate renewable energy and be able to sit on their properties, stay in their communities—which is what they want to do—continue to enjoy the connection with the rural communities and the land they have farmed for many years by having an income from renewable energy. I can see no good reason in the whole process as to why this legislation would not be supported at this time.

This is a framework piece of legislation. It does not have the Greens telling the minister what the tariff should be or what the rate should be. It is an enabling piece of legislation. I recommend the bill to the Senate on behalf of all of those people who want to be enabled to reduce greenhouse gas emissions, to create jobs and to create wealth in the Australian economy. There is no good reason not to support this legislation at this time.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

It is my pleasure to speak on the Renewable Energy Amendment (Feed-in-Tariff for Electricity) Bill 2008. I note, as I did earlier in the week in my contribution to the committee inquiry into the earlier, related bill on this matter, the initiative of Senator Milne and the Greens in introducing this bill and in pursuing this issue in such a detailed and persuasive way. I note that Senator Milne has since withdrawn the initial bill that was under consideration by the Senate Standing Committee on Environment, Communications and the Arts and has introduced this new bill reflecting some of the findings from that committee inquiry and a range of the evidence that had been heard during the inquiry. I recognise that Senator Milne has at every step attempted to produce the most workable piece of legislation possible.

The coalition, however, has concerns about imposing a national feed-in tariff scheme at this point in time. Those concerns are, firstly, as Senator Milne recognises, that we have a range of state initiatives around feed-in tariff schemes that have been developed over some period of time. We believe that a nationally consistent approach to the operation of feed-in tariffs would be worthwhile and is certainly worth pursuing. We recognise that the government has attempted to start that process. We would like to see that process move along at much greater speed than has been the case to date. We also believe that there is some justification for some further, clear modelling on exactly how feed-in tariffs should work, how they should work in conjunction with other renewable energy and climate change related policies such as mandatory renewable energy targets and the emissions trading scheme, and how to ensure that, perhaps through a Productivity Commission assessment, we get the right mix of approaches to encourage the renewable energy sector in Australia.

We on this side of the chamber certainly believe that the renewable energy sector is an important and worthwhile one to support. We have a record, from our time in government, of encouraging the development of this sector, particularly through the solar rebates program, which was much debated in this place, and through the initial introduction of the mandatory renewable energy target and other grants and measures to foster development in a range of different renewable energy technologies. I would like to acknowledge and recognise the fact that there is widespread community support for renewable energy. It is worth noting that throughout the community we have thousands of Australian families who choose to support renewable energy development either through their electricity provider or by taking direct action, such as the installation of a solar hot water unit or a solar PV to directly generate power in their homes. This type of enthusiastic embrace of renewable energy is to be commended. It shows the passion and support that Australians have for policies and measures that grow this sector.

And it is of course a very wide sector. The range of zero- or low-emission technologies that can be applied is vast. I recognise that this bill, as introduced by Senator Milne, attempts to cover a very broad range of technologies. It attempts to ensure that it is not limited to solar, solar PV or wind but includes the opportunities presented by tidal power, wave power, hot rocks and geothermal technology and a range of other opportunities for truly renewable zero-emissions energy technologies to be applied in Australia. We support all measures that can be done responsibly and economically feasibly to grow those energy sectors, and a feed-in tariff is potentially one such measure. I note that the government has said that it will pursue feed-in tariffs. Indeed, it was discussed at the COAG meeting on 28 March this year, and the communique issued from that meeting stated that COAG agreed to consider options for a harmonised approach to renewable energy feed-in tariffs in October 2008. Sadly, the October 2008 COAG meeting has come and gone and feed-in tariffs did not rate a mention in the communique for that meeting.

The opposition is very disappointed by the government’s decision not to have the discussion at that COAG meeting. We hope that they will take the earliest opportunity to discuss with the states how a nationally consistent feed-in tariff regime could be implemented in cooperation with all of the state and territory governments. As Senator Milne has acknowledged, most states have sought to implement some type of feed-in tariff regime. Most of them are net tariffs, although here in the ACT a gross tariff applies, and it is certainly generating strong interest in the renewable energy sector. I am very pleased to note that the new Western Australian Liberal government has committed to introducing a feed-in tariff regime in the west too. Bringing the states together to ensure we get something that is nationally consistent will certainly be of benefit to electricity retailers and suppliers and to those who sell renewable energy products to individual households. We urge the government to make sure that occurs at the next COAG meeting and that there are no further delays in the consideration of this important measure.

The Senate inquiry highlighted evidence of an Ernst & Young report that looked at Germany’s feed-in tariff model. The German model is held up as one of the best models in the world if one is to apply a feed-in tariff regime. I know it is the model on which Senator Milne has based much of the evidence for this bill. That inquiry led to the interesting conclusion that feed-in tariffs produced a lower-cost option to consumers for the generation of renewable energy than other policies such as Britain’s equivalent of our renewable targets—or RECs, as we have renewable certificates that are traded here in Australia. That is why the coalition believes that a Productivity Commission assessment of these policies would be worth while. It has highlighted the fact that feed-in tariffs could be a more cost-effective way to stimulate further growth in the renewable energy sector than further expansion of MRETs. I note that the Greens believe that both should occur and that they are complementary. They may well be complementary but, equally, it may be that one is a more effective and efficient means to deliver it than the other. So, rather than embracing every policy option, a responsible approach would be for us to get a very quick and sound economic assessment of the range of options and make sure that they are fully considered and that we choose the best path—be it one, some or all of the available encouragements for the renewable energy sector.

I reject the assertion in Senator Milne’s second reading speech that the opposition’s support for the COAG process is a deliberate action to delay the implementation of feed-in tariffs. We will continue to pressure the government to make sure that this is dealt with at the first available opportunity. We expect that the government, having stuffed around parts of the renewable energy sector—in particular, installers of solar PV—through the constant changing of rules on the solar grants, must provide certainty to that sector as soon as possible. This is a critically important issue for that sector. They do not know how long the current solar rebates are going to last. They do not know how long the government will keep funding them. They want to know what the long-term, secure option is.

As Senator Milne rightly points out, many of them are asking for a national feed-in tariff regime as that answer. Whether it is rebates, feed-in tariffs or whatever the answer may be, they need some security to make the investment decisions that are necessary to grow their businesses and, in doing so, grow this very important sector of the Australian economy. It is a sector that has enormous scope and opportunity, if we can get it right, to contribute to our economy in the future. There is no doubt that cost-effective renewable energy will be a vastly popular and embraced technology of the future if it can be delivered at the right price, with the right certainty of delivery, into households, businesses and elsewhere.

That, again, is one of the positive aspects of this bill, as Senator Milne has highlighted: the opportunity to encourage and stimulate development of renewable energies, not just in the household sector. Encouraging larger plants to be installed on commercial premises, in farms and elsewhere by providing an economic stimulus and a financial return to those people who chose to install them would be a very positive step.

At present, the rebate based schemes limit funding to individual households. They have had the effect of encouraging smaller systems to be installed. The means testing of the solar rebate has had the impact of systems shrinking even more. It is not rocket science: the cost-effectiveness of these systems will only be enhanced if larger systems are installed—be they on homes, on businesses or on a purely commercial scale—for the renewable energy that is generated. That should be the ultimate goal of installing the most cost-effective systems, which would most certainly be larger than they are currently under the means tested solar rebate scheme. Driving the desire for installing bigger systems across the economy would be one of the very positive effects of this scheme.

As I have indicated, it would support more than just solar PV, and that is something that future government policy decisions need to take account of. Indeed, solar PV, though attractive and widely embraced across the Australian community, may not prove to be the most cost-effective of renewable energies for us to drive home. We need a system that will encourage the development of the renewable energy sector on fair basis that ensures that whichever technology can most efficiently and effectively deliver baseload or surplus load power gets the necessary support to develop as fast as it possibly can, to turn into a true champion industry within Australia and one that we can highlight to the rest of the world. Be it wave, tidal, geothermal or hot rocks, wind, solar or solar PV—there are a range of options that should be pursued and encouraged.

The bill allows the feed-in tariff to be applied at different rates for different technologies. This gives the potential, applied correctly, for appropriate market mechanisms to be put in place to encourage development of the technologies that seem to have the greatest potential to become self-sustaining industries in Australia. The long-term aim for renewable energy has to be a sector that is not widely subsidised, ideally, but can deliver power for Australia and the world while standing on its own two feet. That needs to be the ultimate goal. Feed-in tariffs, when considered against all of the other policy options, have the potential to get Australia to that stage.

I note the enthusiasm of many submitters to the Senate’s inquiry into this proposal. BP Solar, one of Australia’s and the world’s largest solar energy companies, highlighted that this has the potential to address some of the market failures that hurt the development of renewable energy sectors. They said:

… if the objective is to create innovation to overcome the market failure that prevents long term carbon saving potential like solar from developing, then there is a justification for targeted intervention to differentiate between technologies – otherwise the cheapest, wind will predominate.

They have highlighted, importantly, innovation, the fact that these measures are about doing everything possible to innovate and grow these sectors as fast as possible, whilst equally highlighting that there are cost differentials in terms of the different expenses that it takes to produce electricity in these ways.

I note that the bill has been set up with a large degree of flexibility, something else that the government in its COAG discussions may wish to consider—flexibility to set different rates for different technologies, flexibility to reduce those rates as technologies become more efficient and cost-effective, and even flexibility for the minister to choose, as Senator Milne highlighted, to have a zero rate ultimately applied to some technologies.

In closing, I urge the government, as I did when addressing the Senate inquiry report, to act on these matters swiftly. The coalition is, in good faith, encouraging the government to pursue the COAG process. We do so because we believe that with the right encouragement the states should be able to apply a nationally consistent, coherent framework for the delivery of feed-in tariffs. We do not need this overarching Commonwealth legislation to mandate it; we should be able, with the willingness and cooperation of all, to get action, and swift action. But it requires Minister Wong, Minister Garrett and the Prime Minister to honour the commitment they made earlier this year that it would be addressed by COAG. Having already breached the time line that they set, they should have it addressed by COAG at the first available opportunity.

The coalition will not let go of this issue. We recognise the potential for feed-in tariffs, we are committed to the growth of the renewable energy sector and we want to make sure that the right policies are delivered as soon as possible for this sector. I know for sure that the Greens will not let go of this topic either. Should the government not fulfil its promise to address the introduction of feed-in tariffs swiftly, I am sure we will see this issue back before the Senate in no time. So the ball is in the government’s court, as they say, to make sure they deliver on this and deliver an outcome that will benefit not just the Australian environment into the future but, if we get it right, the Australian economy through the growth of a key sector, the renewable energy sector and all of the different parts that make that up.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to be given the opportunity to speak to the Renewable Energy Amendment (Feed-in-Tariff for Electricity) Bill 2008. As I think we are all aware, this government takes very seriously its responsibilities to the Australian people in the area of the environment. This is quite unlike the previous coalition government, who had a history of burying their heads in the sand and even denied the existence of climate change predominantly caused by rapacious burning of fossil fuels. This Labor government knows, in contrast, that we cannot go on using scarce resources on our planet and in our country in the unsustainable manner that we have done in our past.

In an attempt to make headway against the growing use of scarce resources, this government has begun a number of initiatives to curb their use. Just one example of how this government is working on the threats to our environment is in the area of solar energy. In 2008-09, there will be more installations of solar power systems and more Commonwealth funding than in any year of Australia’s history, in line with the record response we have had to our initiatives. This is a government which is determined to meet its promises to the Australian people. As a consequence, our support for the solar power industry is now at record levels.

I remind all those in the chamber that, in the last budget, the government brought forward an additional $25.6 million in funding for this initiative, doubling our original commitment to rebates available to ordinary Australians. Under the Solar Homes and Communities Plan, the number of rebates will rise from 3,000 to 6,000 in this year alone. Also, as part of this plan, funding increases for the fitting of photovoltaic devices have been announced. It puts in place a scheme where households in Australia who need them most will get them, by the introduction of a means test, with households with an annual taxable income of less than $100,000 being eligible for the rebate, while keeping the maximum rebate at $8,000.

This government has also taken major steps to reduce energy use in schools. It allows the schools to take practical and effective action in combating climate change by providing grants of up to $50,000 each to schools to install a wide variety of solar energy and water-saving activities. It invests over $480 million over a period of eight years to ensure that all our schools are able to become solar schools. This will have the added bonus of raising awareness of clean energy technology in our children and more generally in our community, as well as creating sustainable jobs and careers in a very important industry of now and of the future.

Unlike the previous coalition government, who were climate change sceptics, and some of whom continue to refuse to accept climate change as an issue, this government, the Rudd Labor government, is continuing to work to meet its promises to the Australian people to do something before it is all too late. We are committed to making sure that at least 20 per cent of Australia’s electricity supply comes from renewable energy by the year 2020. To deliver on that target, the government will produce a national renewable energy target scheme in cooperation with the states and territories, using COAG. The feed-in tariff is in fact an alternative to the scheme we are debating today, an alternative which has proven to be very expensive in Germany, for example. This government considers that the Carbon Pollution Reduction Scheme, the renewable energy target and other initiatives being taken give the right mix to move Australia to a low-carbon economy.

On the question of renewable energy feed-in tariffs, this government will be working closely with the states and territories through the medium of COAG to adopt a harmonised approach with which all can be satisfied. This option was agreed at COAG back in March and is expected to be considered by them shortly. It is an important point, so it does bear repeating: this government will be working closely with the states and territories in COAG to adopt a harmonised approach. We need to give this cooperative approach a chance to function.

Allied to this, as I am sure senators are aware, many of our states and territories already have, or are planning to introduce, feed-in tariffs which provide current owners of small renewable energy systems with guaranteed fixed rates for the sale of electricity fed into the grid. Victoria, Queensland, Western Australia, South Australia and, of course, the ACT already have feed-in tariff legislation or are to consider feed-in tariff legislation very soon.

It is with double happiness that I can report that I have the honour to represent one of those territories, the ACT, which was one of the first to legislate a feed-in tariff. This was done when the Labor government was in majority in the Australian Capital Territory. Then Labor MLA Mr Mick Gentleman drove the legislation and the introduction of the scheme. It was truly legislation which involved a huge amount of community consultation, and I am proud to say it was very much a product of the will and enthusiasm of the people of Canberra. Feedback on the proposal was sought from interest groups, experts and the community generally. Throughout this process of consultation, Mr Gentleman was overwhelmed by the high level of public support generally and the individual enthusiasm that came from people who had done their own research and looked at the numbers themselves and who saw precisely how this legislation was going to benefit not only the environment but indeed their capacity as individuals to contribute to reducing our carbon footprint. I would like to take this opportunity to congratulate Mr Mick Gentleman for his leadership on the issue of the ACT feed-in tariff bill. It certainly attracted a great deal of attention through the course of the Senate committee inquiry, as it was in place and carries some attributes that I think serve well to inspire our future deliberations.

I would like to talk a little more about the consultation process, because the point is well made that federal Labor are part of a movement that reflects the mood of the people of Australia as well as the impending responsibility and priorities we have in place as a new government for this country. Over 300 people attended the public forums. Mr Gentleman’s office received 26 formal submissions, none of which were opposed to the idea of the feed-in tariff. One hundred per cent is not bad. Adding to this feedback, over 40 submissions were presented directly to the ACT Chief Minister. It should be noted that supportive submissions were received from, among others, organisations such as Greenpeace, the Conservation Council, ACTCOSS, the Alternative Technology Association, the Australian and New Zealand Solar Energy Society and the United Nations Framework Convention on Climate Change. This clearly displays a diverse range of interest groups, again reinforcing the overwhelming support for this initiative.

During consultation with ACTCOSS and the Conservation Council, the need to ensure that members of the community who are eligible for concession discounts would not be disadvantaged over other consumers became clear, and it was addressed. One element of the legislation asks that all electricity users in the ACT contribute to the scheme. So, while some other jurisdictions have a tariff that is applied as a flat rate across all areas, the ACT legislation requires the cost of the tariff to be passed on to electricity consumers in proportion to the electricity that they consume. What is important is that one main purpose of the ACT legislation is to raise awareness of electricity consumption, with the aim of reducing it. It was designed to enact a social change in the way that we use electricity and for that change to bring about further action on reducing our carbon footprint. The ACT Labor government showed the leadership required to ensure that an effective, well-designed feed-in law was enacted within the ACT.

I think that the experience of the ACT makes it clear that these kinds of schemes are desirable. I think federal Labor is showing the utmost responsibility by wanting to take a coordinated approach. COAG has already made a decision to proceed down this path, and that is why we have formed the view that this bill should not proceed and that we should provide the opportunity for that course of action to fully develop.

The Senate committee made a series of recommendations, noting the strong industry, consumer and government support for feed-in tariff schemes. The committee did of course recommend that the Commonwealth government, through COAG, proceed as quickly as practicable to implement a feed-in tariff framework that, as far as is possible, is nationally uniform and consistent.

Further recommendations were made regarding metering and assessing the track record of existing schemes overseas. It was also recommended that a more regular system of payments to generators be considered than the annual payments proposed in the current bill. Recommendation 4 went on to say that tariff digression rates forming part of the nationally consistent framework should also have the capacity for digression rate pauses to be instituted, following a rate review procedure, and that tariff digression rates should be technology specific.

Finally, the Senate Standing Committee on Environment, Communications and the Arts recommended:

While strongly supporting a nationally consistent feed-in tariff framework, the committee recommends the current bill not proceed.

As a member of the committee, I support that recommendation. I support what the federal government has planned with respect to adopting a harmonised approach through the COAG process. We need to give that cooperative approach a chance to work before we legislate in this place.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

I think we really are at a critical point in this nation’s response to the climate change challenge. Therefore, we are also very much in a time of dynamic policy debate. We are looking at multiple solutions to make a difference. Feed-in tariffs are one such measure that have already been pursued by state and territory governments around the nation.

We all know that the challenge of climate change is one of profound environmental, economic and social consequences. We have many scientific and economic experts reminding us of the urgency of this matter, because our way of life is indeed at risk. In Western Australia, we risk our wonderful Ningaloo Reef, increasing loss of habitat and rainfall in the south-west, drying farmland, rising sea levels, changing and more extreme weather patterns and the deterioration of infrastructure. These are the kinds of impacts that will similarly be felt in the rest of the nation’s farmlands, in our rich tourism areas such as the Great Barrier Reef, and even in Australia’s Antarctic Territory and beyond. Our environment and lifestyle are substantially at risk. To put it simply, the consequences of climate change inaction are potentially devastating.

What I want to acknowledge today is that in these debates we are also presented with opportunities as we set about reducing Australia’s carbon pollution over the long term and with the least cost possible. We have a variety of emerging new industries to be supported through a variety of policies and measures. Feed-in tariffs are one such measure. So there is much more to be done.

The key to Labor’s approach to renewable energy is our overarching drive and commitment to addressing climate change. The key plank in our approach is the Carbon Pollution Reduction Scheme, first and foremost, because worldwide recognition of the real cost of using fossil fuels is long overdue. For too long we have ignored the very real benefits attached to switching to clean and renewable energy and enhancing energy efficiency. The Carbon Pollution Reduction Scheme represents a profound economic and environmental reform and, I think, is a key policy in driving the reform we are looking for. This is because, for the first time, the market for renewable energy, including solar, will reflect the price of carbon-intensive fossil fuels. Incentives to pollute will be replaced with incentives to innovate, and renewable energy technologies will compete on a playing field that is fundamentally transformed.

Importantly, Labor has also committed to an expanded renewable energy target. Incidentally, this is something that Germany does not have. We have many different policy levers up our sleeves. This target delivers on the government’s commitment to ensure the proportion of Australia’s energy coming from renewable energy sources is 20 per cent by 2020. Indeed, that is the key federal leadership measure that this government is taking. It is more than four times the previous government’s target. The national renewable energy target is designed to accelerate the deployment of renewable energy in this country. So, like a feed-in tariff, the renewable energy target is designed to assist with the deployment of new technologies and investments in the renewable energy sector, enabling stable and continuing investment that can be banked on. Such a scheme is going to lower the cost of long-term abatement by driving investment and capacity in our electricity generating sector. Importantly, such schemes reduce red tape by bringing the existing and proposed state and territory schemes into a national one.

It is important to note that the energy target itself is a transitional measure and is going to be phased out between 2020 and 2030. We would hope at that point that the Carbon Pollution Reduction Scheme will be maturing. This scheme is designed to bring renewable and solar energy in from the margins so that it is not isolated but rather integrated into our energy mix. It is about tapping into the innovative and dynamic capacities of our renewable energy sector and the many talented energy efficient practitioners being developed by this nation. For Labor, it is also about enabling households to take practical action to reduce their energy use. We have released a consultation paper on renewable energy. This also follows a commitment of more than $1 billion to household and community energy efficient and renewable energy programs.

Labor already has plans to address climate change. Without these plans, there would be no plan for renewable energy. We have a plan for renewable energy and a plan for the future of Australia’s solar industry. As I said before, the key planks to the government’s measures are centred around the Carbon Pollution Reduction Scheme—in other words, a price for carbon.

The Greens, through the Renewable Energy Amendment (Feed-in-Tariff for Electricity) Bill 2008, are seeking to keep these issues on the agenda. They believe these kinds of objectives can be addressed through a national feed-in-tariff scheme. It seems somewhat contradictory that these issues are already being pursued through COAG, as it resolved to do in March 2008. Personally, I do not think it is good policy to take them out of COAG’s hands at this point in time. There are good reasons for this as all the progress made so far has been due to the efforts of the states. In fact, it was the Howard government that was missing in action on this issue. Now it is a case of state and federal governments working together. To pass this feed-in-tariff scheme is to impose a scheme on the states when they are already leading the way in this area. Currently, there is a feed-in tariff in the ACT, Queensland, South Australia and Victoria. It is notable that even Alice Springs has a piloted program.

I am also very pleased that at the recent WA election, when the Labor Party introduced a commitment to a gross feed-in-tariff scheme, the Liberal Party responded in kind. Now there is a clear commitment in my own state of WA to a gross feed-in-tariff scheme. The simple fact is that many states were way ahead of the Howard government in implementing these schemes, and it is not time to take the issue out of hands of the states. They are the ones who have been working through the issues and getting on with the job. I suppose it is notable that their schemes vary significantly in their design; the states recognise this. They are the ones that have put the issue on to the COAG agenda. The states confront the same issues as the Commonwealth in putting these issues together.

I now turn to the differences in some of these schemes. Some of the feed-in-tariff schemes are restricted to new installations while others are not. Some offer feed-in tariffs for all electricity generated while others offer it only for the electricity that is surplus to the user’s needs. Some have limits on the scheme, such as a target number of megawatts of electricity generation, while others do not. This does mean that there is currently no consistent national approach. All of these design choices raise significant policy questions. But I think COAG needs to sort through them. The state and territory schemes have various eligibility restrictions. Personally, I like to see schemes that do not have very strict eligibility restrictions because that is the best way forward to promoting growth in the sector.

I note that in Victoria the scheme is limited to installed units of up to two kilowatt hours generating capacity and the scheme as a whole is capped at 100 megawatts of generating capacity. I note that South Australia also limits the size of customers and systems eligible to participate and it has a range of eligibility criteria. The Queensland scheme is quite similar to South Australia’s and it also has a range of variable criteria for access. The ACT scheme is one I quite like. It has few eligibility limits. While large generators receive a less generous feed-in tariff than households, there is no size limit on individual generators, unlike in Queensland, Victoria and South Australia, and no upper limit on the number of participants or the number of megawatts that can be eligible for the tariff.

I suppose it is clear from these remarks that we need to at some point move on from such a wide variety of fragmented policies, because if we are going to innovate change across the country and drive investment in the renewable energy sector then people need to operate across borders and they really need a way of planning their businesses with some kind of consistency. But it is worth pointing out that there is growing and considerable investment in the states already and, because of that investment and the differences in the variety of schemes, the states need to be the ones that work out those differences. I appreciate that the private member’s bill before us seeks to address many of the issues that I have spoken about. However, I contend it is inappropriate to simply impose a national measure when states have undertaken to harmonise their own laws.

I am going to use this opportunity today to highlight some of the government’s other initiatives demonstrating the depth of our climate change policies. The most critical step in reducing our emissions over time is recognising the real costs of using fossil fuels. There are real benefits of switching to clean and renewable energy and enhancing energy efficiency. I am really pleased that incentives to pollute will be replaced with incentives to innovate, and renewable energy technologies will compete on a playing field that is fundamentally transformed.

The Rudd government has some significant household assistance measures. We are already putting in place programs to assist people in their homes and the community more broadly to become more energy efficient and to access renewable energy sources. The issue of energy efficiency is profoundly important because we know in the current climate that energy is becoming more expensive. As a good Labor government, we cannot let that happen without appropriate assistance to households. You can give that assistance out in a variety of ways. The best way, I think, is to help people with energy efficiency in their homes. Other ways are to give them direct subsidies.

The framework for household assistance measures was announced in the budget. We made a commitment of more than $1 billion. The first plank of these measures is the Low Emission Plan for Renters. That plan provides rebates for people living in rental accommodation to assist with the installation of energy-efficient insulation. One hundred and fifty million dollars has been set aside for this plan. It is a really good policy because one of the key problems that confront us is that people are often reluctant to make investments in rental properties because they know that it is the renter that is ultimately paying the energy costs. If they invest in their house, there is no incentive to offset the prices for the tenant, because they do not get that money back. So it is really important that we have got innovative policies to address these kinds of problems.

The government is also assisting householders make energy-efficient purchases by further developing energy rating labels and standards for household goods. The household assistance measures plan is about shifting away from energy-inefficient and expensive household products, with measures such as speeding up the phase-out of inefficient lighting and providing rebates for solar hot-water systems to replace inefficient systems. I think it is important that the government is also working with the states to phase out the most energy-inefficient systems over time.

A particular initiative that I like is the National Solar Schools Program, because it is not just about households; it is actually about engaging the whole community. The government is engaging in our stride toward energy efficiency and renewable energies. This year the National Solar Schools Program got underway, with more than 9,000 schools around Australia becoming ‘solar schools’. I have really enjoyed getting out to schools in Western Australia and talking to them about these issues. Almost half a billion dollars has been set aside for this program. Importantly with this program, more than $200 million of the funding is set aside for investing in solar power systems. The government is doing this by providing grants of up to $50,000 for minimum two-kilowatt solar PV systems.

What is really important here is that we are not only making energy savings but every primary and secondary student in Australia is being provided with a working example of solar power. I think this gives solar power a very high profile indeed. In a few short years we are going to see photovoltaic panels on school roofs right around the country. That is also contributing to transforming investment in the renewable energy industry, in particular PV.

Labor is committed to the Solar Homes and Communities Plan. Solar power is a really visible and integral part of our community through the government’s Solar Homes and Communities Plan. It was a key election commitment. As a result of the increasing demand for photovoltaic rebates from our community the government has increased funding for this plan in the current year by bringing forward funding from future years. As senators will be aware, to make sure that the rebate goes to those households who need them most a means test for eligibility was introduced. I know that was highly contested, but it has not dropped demand. It has been highly successful and the industry continues to grow. Households have accessed these rebates at record levels. This shows that the government is indeed heading in the right direction. The program has been so successful that the Minister for the Environment, Heritage and the Arts has informed us that there will be more Commonwealth funding for solar power and more installations of solar power systems this year than in any other year in Australia’s history.

Today I would also like to address the focus on solar power that we have through the new Solar Cities program. I am really delighted that recently this program has been extended to include Perth. Perth Solar City is the seventh city to be part of the government’s Solar Cities program. The program is about encouraging sustainable energy solutions. Over 6,000 homes and businesses in the East Metropolitan Region of Perth are part of this program and they will receive advice and practical assistance to make homes more energy efficient and energy smart. These kinds of programs will ultimately change the fabric and culture of Australia in terms of how we perceive energy because technology investment will not make a difference unless we transform people’s behaviour. The biggest opportunities we have before us are in teaching people to be energy efficient. (Time expired)

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

I acknowledge that we are here tonight debating the Renewable Energy (Electricity) Amendment (Feed-in-Tariff) Bill 2008 from Senator Milne, which is not dissimilar to the previous bill and which has been the subject of a committee inquiry and report. I acknowledge, as I did in my previous speech on the committee report into the bill to which I just referred, that it is always useful to be reminded by mechanisms such as this private member’s bill of the importance of climate change and the need to address our attention to alternative forms of energy. It is important to keep ourselves focused on those issues and this is one mechanism of doing it, so I thank the Greens for putting the bill into the parliament for that purpose.

This is a very complex issue. The introduction of a feed-in-tariff scheme—whether at a state or national level or whether a national feed-in-tariff framework is introduced at all—is a very complex issue that requires a lot of consideration by governments at all levels, not just with the feed-in-tariff scheme itself but with its interaction with other initiatives designed to address climate change and the take-up of renewable energy. So while it might seem an easy way to advance our progress with climate change, it is probably not the best mechanism to do that. In my speech, and indeed as Senator Pratt has already done in her speech, I will go into the complexities of what we are dealing with. Having said that, I must say that at least Senator Milne and the Greens are doing something, which is more than the previous government did during its term of office. While, for years, the nations of the world had been alerted to the fact that climate change was happening and the dire consequences of the impact it would have on all our nations if climate change was not addressed, despite those persistent warnings, the previous government chose to ignore the size of the problem and chose not to do anything significant to address the size of the problem. So it is very disappointing that we had a whole decade or more of government which failed to take any serious action, although I do recall there was an announcement by Mr Turnbull, the former environment minister, about some light bulbs. I think that was a bit of a standout in the previous decade with regard to the previous government’s environmental credentials.

As I said, the previous government chose to ignore the size of the looming problem with regard to climate change, but that is pretty much what they did with a lot of significant issues that had to be dealt with by the nation during that previous decade when interest rates were rising, inflation was growing, the enormous skills shortage was developing, 457 visa holders were taken advantage of and dental care waiting lists were over 600,000 people long. The previous government sat on its hands, as it did with the issue of the environment.

I am very pleased to say that the Labor government, when it came to office, chose not to follow that inactive lead of the coalition. Not only were we prepared to admit the challenges that the nation faced, we were honest with the public about them during the campaign leading up to the election last year, we were honest with the Australian public about our willingness to address those issues and we were also honest about the extraordinary difficulties that we would face in addressing those issues. On our election we took the initial step of ratifying the Kyoto Protocol, we created the ministerial portfolio of climate change and water and appointed Senator Wong to that position. Those important initiatives set the tone and the framework of the government’s approach to matters to do with climate change and the environment.

I am pleased to say that, almost a year after the election of the Rudd Labor government, we are continuing apace with our attention focused on this one most significant issue that Australia and the other nations of the world face, and we do all these things on many fronts and in many forums. I note, for example, that another significant achievement of the government was to reach agreement with state governments to secure a sustainable future for the Murray-Darling Basin and to invest $2.2 billion over five years to deliver an environment that is healthier, better protected, well managed and resilient in the face of climate change. That is part of the Caring for Our Country program.

This is a good opportunity, when we are outlining the Rudd government credentials on innovation and climate change and are looking to the future security and environmental wellbeing of our nation, to note that this week the government announced its $6.2 billion Green Car Plan, a very exciting initiative particularly for those of us from states like South Australia, where we have an automotive industry that has been going through tough times and is looking for leadership from the federal government. We must ensure that we not only maintain the automotive industry in a viable and sound condition but also see that it is well placed as to the future challenges that that industry will face. The Green Car Plan will make our automotive industry more economically and environmentally sustainable by 2020. Some of the components of the plan provide for a better targeted and greener assistance program. It is worth $3.4 billion and it is the Automotive Transformation Scheme. That will run from 2011 to 2020. There will be changes to the Automotive Competitiveness and Investment Scheme in 2010 consistent with the Bracks review proposals, to smooth transition to the ATS. Nearly $80 million has been committed to that. There will be $116.3 million to promote structural adjustment through consolidation in the components sector and to facilitate labour market adjustment. There are other innovations to assist the industry to move forward and to deliver to Australia a green car that will ensure the future of the automotive industry in Australia and thereby secure jobs. That complements the other things that we have been doing.

I should mention that one of the other things about the ATS is the $10.5 million expansion of the LPG vehicle scheme, which is starting immediately. That doubles payments to purchasers of new vehicles using LPG technology. This is a relatively modest but very practical and much-needed innovation on the part of the government. As we know, Australian people want to do something that is environmentally sound and want to make changes to their lives as to what they do on a day-to-day basis to assist us to protect and preserve our environment. This contribution as to the LPG vehicle scheme will assist people to make those practical changes.

The government has been working quickly to address climate change. That was one of the things that we started doing as soon as we came into office and at no stage has the quality of our policies been compromised. There has not been compromise, because the government does not make decisions in haste. As we know, if we are going to address the issue of climate change and environmental sustainability properly, we need to get it right. We are a responsible government. We understand that environmental and economic policies are intrinsically linked and that if we do not deal with one correctly then another will be negatively impacted upon. That is why every element of our climate change strategy has been designed with thorough consultation and research.

Our Carbon Pollution Reduction Scheme, or CPRS, is a very good example of that. I know it was the subject of some considerable discussion in the chamber earlier today, and it is worth reiterating the measured but also urgent approach that the government is taking to the introduction of an emissions trading scheme. It was quite disappointing, given what we heard from the coalition today, to note that they seem to be backtracking from an ETS which had apparently been previously on their agenda—or at least it was according to Mr Turnbull, a former minister for the environment and now the Leader of the Opposition. We are not quite sure where the coalition stands these days on an ETS. Perhaps it will become clearer, but clearly the divisions within the coalition on this matter have not yet been resolved. I hope, for the sake of the Australian public and the economy, that all that is resolved soon.

The Rudd Labor government knows the CPRS is an integral part of our move forward to a cleaner, greener future. The scheme has two distinct elements: the cap on carbon pollution, and the ability to trade. The cap achieves the environmental outcome of reducing carbon pollution, and the ability to trade ensures that carbon pollution is reduced at the lowest possible cost. As to the principles that guide development of the scheme, as I said, there is the cap and the trade scheme, and it will be a scheme that has maximum coverage of greenhouse gases and sectors to the extent that is practical. The broader the scheme’s coverage the more cost-effective it will be in reducing greenhouse gas emissions and the more fairly spread the burden of such reductions across the community will be. The government takes that very seriously. The gloom and doom predictions that we were hearing from the coalition today and during the week about the likely impact of an ETS have been very disappointing. We do not need people talking down Australia’s economy. We do not need people frightening the Australian public unnecessarily about these things. It is time for the nation to take bold initiatives and to follow them through. The government has never denied that that will be a difficult thing to do and that there will be some pain, but we are taking pains to spread the cost across the economy and across the people of Australia as much as we possibly can.

The CPRS will also be designed to address the competitive challenges facing emission intensive trade exposed industries in Australia. I do not know how many times we have made that point—not just to the coalition but to the people of Australia. It is all most disappointing that the coalition continues to ignore that statement of policy—and that statement of fact—that the government has always built into its discussions about a Carbon Pollution Reduction Scheme. I want to take this opportunity to reassure the people of Australia, yet again, that we are prepared to take the bold measures. We are prepared to introduce an emissions trading scheme and we will do it in a way that ensures that the economy remains vibrant and strong. That, of course, is the responsible way to go, and that is what we will do.

With regard to the Carbon Pollution Reduction Scheme, there was a report released on 30 October this year which included the Treasury modelling of the scheme. That has been a very welcome piece of news from the Treasury. The report, which measures the economic impact of cutting carbon emissions through the government’s CPRS, has three conclusions. They are: that the Australian economy will continue to grow strongly as we reduce carbon emissions; that the earlier Australia acts, the cheaper the cost of the action whereas the longer we delay, the more damage we risk to the Australian economy; and that many of Australia’s key industries will become more, not less, competitive. That was an important underpinning to the progress we are making with regard to the Carbon Pollution Reduction Scheme.

Another part of the government’s climate change strategy is investment in renewable energy. We are committed to ensuring that at least 20 per cent of Australia’s electricity supply comes from renewable energy by 2020. This was a target that the government boldly set early in its term of office, and we are putting in place the measures to ensure that we reach that target. We are developing a national renewable energy target to provide up to an additional 45,000 gigawatt hours of renewable electricity generation by 2020, and the RET scheme will roll in and expand upon existing Commonwealth, state and territory renewable energy targets. It is a transitional measure that will help prepare the electricity sector to contribute to the significant emissions reductions that will be needed to address climate change. It will be phased out between 2020 and 2030 as the emissions trading scheme takes place and it will, in the interim, drive substantial growth in the renewable energy sector. We are very pleased with that long-term plan that feeds into the emissions trading scheme. Feed-in tariff schemes also, of course, need to be considered in the context of the emissions trading scheme and other developments that both state and federal governments have implemented in this regard.

The feed-in tariff bill that is before us today gives us an opportunity to contemplate the issues surrounding the introduction of a feed-in tariff scheme, but that is something that we need to do in the context of everything else that is going on in the nation, both at the state and federal level. Whilst it will be disappointing for Senator Milne to hear that we are not in a position to support her bill today, we do appreciate that she has at least raised the issue. We believe strongly, however, that COAG is the appropriate venue for discussions about a national feed-in tariff framework, because we do have states that have either implemented, are implementing, or are considering implementing their own feed-in tariff legislation and feed-in tariff schemes. It is invaluable to have discussions at COAG with the state governments about how their schemes have gone. We need to hear about the pros and cons of the different kinds of schemes that they have introduced, and the practical problems that they may have had in implementation and the problems they envisage having in the future. Many of those issues about practical implementation were discussed in the report I referred to earlier into the original bill that Senator Milne put in.

We are confident that COAG is addressing this issue in a timely, but more importantly in a thorough, way. It is an issue—as with anything to do with the environment—about which there has been neglect for 10 years, so you cannot just jump in and do things in an ad hoc and random manner. You need to look at the measures that you are going to implement and make sure that they complement each other. You need to make sure that they do not damage the economy and that they complement the work that the state and federal governments are doing. Basically, you need to get it right. It is all very easy for members and senators to put in private members’ bills which look like they are going to be a panacea for the problems that the nation is facing. As we all realistically know, however—and, I am sure, as even Senator Milne would admit—the business of government is a little bit more complex than putting in a private member’s bill and expecting that is going to solve the problems of the nation. Such problems are complex and they have, unfortunately, suffered from some neglect over a period of time.

Nevertheless, I will conclude by reasserting that I do appreciate the opportunities that have been given to members of the Senate to explore the issues regarding feed-in tariff schemes. It is probably not something I thought I would need to turn my mind to when I first became a senator, but now I have turned my mind to it I am very pleased that I have been required to do so. I look forward to progress on the future introduction of feed-in tariffs in the nation. (Time expired)

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Like Senator McEwen, I have great pleasure in rising to speak on the Renewable Energy Amendment (Feed-in-Tariff for Electricity) Bill 2008. The world of course is very much dependent on fossil fuels for its energy production, and it is indeed urgent that we support the development of non-renewable sources of energy and support their use around the world. The feed-in tariff system has proved useful in many countries around the world and in many states in Australia. It is a system whereby electricity from renewable energy sources is paid for at a higher rate than that from fossil fuel sources. The payment is spread across all energy users and therefore there is only a small increase in cost for each energy user. It is a very reasonable way in which to spread the extra cost of energy from renewable sources across the whole of the electricity-using system, thereby encouraging the use of renewable energy.

Why do we need to pay special attention to the cost of renewable energy? Because it is a new technology. Some renewable energy sources are well tried and have been operating successfully for a long time, but we need to encourage wider use of those renewable energy sources and the expansion of different kinds of energy sources as well. In any area, new technologies, new ways of doing things are expensive to implement. A lot of money has to be spent on research and development, and on testing to make sure that the new technologies work. In many cases pilot plants have to be set up for testing and monitoring to make sure that the new system works well in practice. Once the research and development and testing are finished, there is the building and installation of any new system and the start-up and training costs required for that.

Any new technology is expensive. Indeed, we have just been dealing with the removal of the excise exemption on condensate, which is a case in point. The industry had to build up more or less from scratch a new facility and get things going. The government recognised this and gave assistance to that industry to start up. It is a similar case with renewable energy: government assistance is required to kick-start this new system, and it is entirely appropriate that ways be found to subsidise it and to assist the industry to get going.

Apart from the start-up costs, there are the costs of continuing operation. People investing in renewable energy need certainty that the projects are going to continue for some time, that they will get to a period where they can amortise their start-up costs and that they will have an ongoing rate of return that will justify their initial investment. Many companies, including companies involved in fossil fuel energy production, are very keen to start working in renewable energy supply. In my own state in South Australia I had quite a bit to do with Origin Energy, which is, and has been for many years, responsible for developing renewable energy sources. It and many other companies in that area are very keen to prove that they can produce renewable energy efficiently and well to replace the fossil fuels, the non-sustainable energy source, that we have been using.

When I started work in the mid-80s at a company called Australian Mineral Development Laboratories, the tail end of solar photovoltaic research and development was still occurring in its laboratories. Australia, and South Australia in particular, was leading the way in solar energy research some decades ago. It is a matter of great shame that we lost the advantage we had. It is a great pity that that was allowed to happen over successive decades because we would have been well-placed if the kind of government support that went into that research, and also private industry support, had been continued. That is not to say that R&D in other areas has not continued. Coming from South Australia, I am very keen about geothermal energy, into which a lot of work and money has been poured by private sources, with public assistance and encouragement. A pilot plant is already working on geothermal energy, and we have great hopes for it. But that is incidental to this debate.

I support the government’s position that there should be a COAG-agreed position on feed-in tariffs. Although I understand the support of Senator Milne and the Greens for a national feed-in tariff system and can see the efficiency that it might generate, I know that the states have already embarked on this path. In 2007 and again in 2008 the South Australian government passed legislation relating to feed-in tariffs. The South Australian government has a great commitment to that system and to renewable energy generally. It has put solar panels in many public buildings, around Adelaide in particular, and has been very keen to assist wind farm development in that state. The South Australia government has a very strong commitment to renewable energy and feed-in tariffs. I am confident that it will work with the other states, within the COAG process, to achieve a good system that suits individual states. As has been pointed out by previous speakers, the federal government is working on its own initiatives in regard to greenhouse gas emissions and renewable energy, above and alongside what the states are doing on feed-in tariffs.

It has been pointed out previously that the government has set the national renewable energy target at 20 per cent by 2020 and expects the Carbon Pollution Reduction Scheme to be operating very effectively at that time. The Carbon Pollution Reduction Scheme, with its cap and trade model, is clearly going to be a very efficient and effective way to encourage the use of renewable energy and to effect a reduction of greenhouse gases. We do not have the final model, but it is clear by the way that the Minister for Climate Change, Senator Penny Wong, and the government are proceeding that that system will be comprehensively thought out, that it will have had wide consultation with a range of groups and that it will have an immediate impact and work very effectively on a national level. I think it is very appropriate that the federal government continues to concentrate its energy in that area, that it continues to work in the sphere of reducing greenhouse gases and encouraging renewable energy while the states continue down the path to which they have been committed for some years now and work within the COAG process, with the encouragement of course of the federal government, to ensure that there is a system that works well nationally but that is administered by the various state and territory jurisdictions.

On the government side, we are impatient and keen to see these things happening, as indeed are the Australian Greens, clearly. I look forward to seeing some results soon, after a period of inaction. Indeed, we are well behind many other countries in Europe in this regard and, in some respects, the United States as well. When I was looking at this issue of feed-in tariffs, my usual source Wikipedia said that Jimmy Carter, the former President of the United States, first brought in this kind of system back in 1978 in the United States in response to an energy crisis. I will not swear by that source, but many other countries have got the jump on us and, if that is so, it is a pity that President Carter’s work was not continued with. The world would be in a much better position now to deal with the effects of pollution and greenhouse gases if that had been the case.

The Australian community has a lot of catching up to do of work that could have started much earlier. I am confident about the government’s many-layered plan of action to deal with the increase in renewable energy sources and with greenhouse gases. Although I commend the Greens for the work that they have put into this bill, I have to support the government’s position in continuing down the path it committed to during the election and subsequently.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Renewable Energy Amendment (Feed-in-Tariff for Electricity) Bill 2008. The Rudd Labor government is committed to protecting our environment. Expanding our reliance on and production of renewable energies is one element of that stance. Among our key undertakings in the realm of cutting our nation’s greenhouse gas emissions is to dramatically increase our renewable energy target to 20 per cent by 2020. Such renewable energy sources as solar, wind, wave and geothermal will play significant roles in this new direction.

In 2008-09, there will be more installations of solar power systems and more Commonwealth funding for solar power than in any year in Australia’s history, in line with ongoing record demand. In the budget, the government brought forward an additional $25.6 million in funding, doubling the number of rebates available under the Solar Homes and Communities Plan this year from 3,000 to 6,000. Funding has been increased in light of record demand for the rebate. We also want to deliver a clean energy revolution through such measures as our $500 million Renewable Energy Fund, $500 million National Clean Coal Initiative and $150 million Energy Innovation Fund.

We need to make sure we have a wide range of appropriate technologies, including clean fossil fuels, biofuels and hydrogen and energy efficiency. This government is working with the states and territories through the Council of Australian Governments to consider the options for a harmonious, national approach to renewable energy feed-in tariffs. Feed-in tariffs are already operating in Australia—Victoria, Queensland, Western Australia, South Australia and the Austrian Capital Territory all have some form of feed-in tariff in place. Other states and territories are planning to implement feed-in tariffs, which provide owners of small renewable energy systems with guaranteed fixed rates for the sale of electricity fed into the grid.

The Senate Standing Committee on Environment, Communications and the Arts conducted an inquiry this year into the feed-in tariff bill that predated the bill before us today. The committee recognised that any feed-in tariff scheme required detailed consideration of coordinated action in light of pre-existing state and territory schemes; the eligibility of different renewable energy sources; tariff values available for different sizes of generators; the parameters within which feed-in tariff payments will decrease over time; whether and how feed-in tariff payments will be indexed; and information management for the administration of the scheme. The report described a feed-in tariff as a policy mechanism used to encourage the use of both small, dispersed generating capacity and large utility-scale generators. It said that a feed-in tariff is a rate usually set by a regulator or government which electricity retailers or a regulator are required to pay to particular electricity generators who want to feed power into the electricity grid. Further, the report said that a feed-in tariff will put a legal obligation on utility companies to buy electricity from renewable energy producers at a premium rate, usually over a guaranteed period, making the installation of renewable energy systems a worthwhile and secure investment for the producer, with the extra cost being shared amongst all energy users, thereby reducing it to a barely noticeable level. The report went on to say that there are at least two main reasons why a feed-in tariff may be set. It may be intended, firstly, to correct a market failure such as the lack of a price signal reflecting the environmental harm caused by greenhouse gas emissions; and, secondly, it may be used to stimulate the development of particular electricity generating technologies, such as photovoltaic cells.

Looking at a feed-in tariff policy option is just one of the Rudd government’s moves in tackling climate change and these moves are all part of our dedicated and deliberative approach to the issue. If we do not tame this beast we will leave a terrible legacy for the generations to come. But we must do this in a careful and considered way. In contrast to the scepticism which pervades the benches opposite, the government knows we must act on preserving and restoring the environment—deliberately, decisively and in a timely, responsible and well measured manner. In contrast to the apathy, indifference and inaction from the former Howard government, we on this side want to make a difference for the future—for future generations, for our nation and for our planet. We must get our response to this crisis right.

We take seriously the overwhelming weight of scientific evidence that says our planet is in peril, and we know the Australian people share our view that this is a serious issue that must be addressed. Therefore, from day one of this administration, Labor’s priorities have been clear on this crucial policy area. Ratifying the Kyoto protocol was the first official act of this government. Through that early step, Australia made a pledge that its greenhouse emissions from this year until 2012 would be no more than eight per cent above 1990 levels. This was an important first move towards bringing our emissions under control. It also gives Australia a seat at the world table when it comes to building international cooperation and collaboration and when it comes to developing a truly global approach to a truly global problem. Australia was also instrumental in facilitating agreement on the roadmap for post-2012 international action on climate change at the December 2007 Bali negotiations. Even though Australia is now a leading player in negotiations under the United Nations Framework Convention on Climate Change, we will not rest there because we know that there is much more to be done.

The Australian government’s climate change policy is built on three sound, strong arms: reducing our nation’s greenhouse gas emissions; adapting to the climate change consequences we cannot avoid; and helping to shape a global solution. The Australian government is committed to reducing greenhouse emissions, and robust, accurate and reliable data is essential to achieving this goal in the most efficient and effective way possible. The government believes that the Carbon Pollution Reduction Scheme, the renewable energy target and other policies and programs we are implementing are the right policy mix to drive Australia’s transition to a low-carbon economy. This government remains strongly committed to helping Australians take practical action to tackle climate change, build a strong solar industry and harness our abundant solar resources. The Rudd Labor government is delivering $2.3 billion over four years in this year’s budget to help individuals, communities and businesses meet the challenges of climate change, and we are committed to assisting Australian households to take practical action during the transition to the Carbon Pollution Reduction Scheme.

Through direct financial incentives, strengthened energy efficiency regulations and targeted information, households will be helped to use less energy while saving money. Key measures include: $10,000 low interest loans for Australian households to implement energy and water savings; rebates for energy-efficient insulation for 300,000 rental homes; $8,000 rebates for rooftop solar power panels and $1,000 rebates for solar hot water systems; improved energy and water efficiency standards for new homes and appliances; and making every school in Australia a ‘solar school’ within eight years.

The $480 million National Solar Schools Program will assist schools to take practical action to tackle climate change by providing grants of up to $50,000 for schools to install a wide variety of energy- and water-saving measures. We will invest $480.6 million over eight years to ensure all our schools can become solar schools. It will reduce school energy and water bills and it will also raise amongst our young people awareness of clean energy technologies available in our communities.

The government also is investing in cleaner transport through measures such as the green car challenge and the newly expanded Green Car Innovation Fund. The government has established the Department of Climate Change and Water within the Prime Minister’s portfolio to deliver Australia’s climate change policy. Building a clean energy future is critical to the goal of significant emissions reductions in Australia and globally, and will also drive business opportunities for forward-thinking elements of industry.

The Rudd government’s first budget provides $1.7 billion to support Australia’s world-leading scientists and researchers in their work to improve energy efficiency and clean energy options. We are also working to adapt to the impacts of climate change that we simply cannot avoid. Our plans include helping coastal communities adapt through the Caring for our Coasts Plan; fast-tracking a climate change adaptation plan for Australia’s World Heritage and iconic areas; securing our future water supplies; and implementing policies to address the effect of drought and climate change on primary industries, such as a $55 million climate change adjustment program and a climate change and productivity research program for primary industry.

We are committed to reducing Australia’s greenhouse gas emissions by 60 per cent on 2000 levels by 2050. We will implement a comprehensive emissions trading scheme by 2010 to deliver these targets. This will ensure that greenhouse gases will have a price and so harness the power of the market in finding cost-effective solutions. The government will work with farmers to encourage sustainable farming practices that reduce emissions and develop carbon sinks. We must act to reduce our greenhouse pollution to avoid the worst impacts of climate change and to protect our long-term prosperity, our environment and our unique way of life.

We must also act to adapt to the impacts of climate change we are experiencing from the greenhouse pollution already in the atmosphere. Tackling the problem will not be easy and there will be costs. But the longer we wait to act, the higher the costs will be. For too long we have poured greenhouse pollution into the atmosphere and we are continuing to do so at an alarming rate. Science tells us that this pollution is causing damage. We are already feeling the effects of this. Projections show that if we do not act it will only get worse, with changing temperatures and rainfall patterns, more droughts, floods, water shortages, rising sea levels and extreme weather.

Australia, already the driest inhabited continent on Earth, is particularly vulnerable to climate change. Many parts of Australia are already struggling through crippling drought and, with climate change, such events will become longer and more severe. Drought is likely to become more frequent as a result of climate change and has the potential to disrupt electricity generation capacity and affect the reliability of electricity suppliers. Increases in temperatures, particularly in the summer months, will increase energy demand.

My home state of South Australia is home to more than 1.5 million people or around 7.6 per cent of Australia’s population. Already the nation’s driest state, climate change presents South Australia with a particularly tough challenge. The state icons of wine growing and agriculture are in the climate change crosshairs. I support the government’s position on working with the states and territories through the Council of Australian Governments to consider the options for a harmonious national approach to a renewable energy feed-in tariff.

Mark Arbib (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Renewable Energy Amendment (Feed-in-Tariff for Electricity) Bill 2008. This is an extremely important debate and I thank Senator Milne and the Greens for their continued efforts in the fight against climate change and the opportunity to speak on this bill.

Before I come to the specifics of the bill, I would like to put on record how important this issue is to the Rudd government and outline some of the good work that has been achieved in under 12 months. Unlike those on the other side of the chamber, who still deny that global warming exists and after 11½ years failed to take any sort of action on the issue, the Rudd government is working full throttle to combat climate change. It was one of our key election commitments, one of our key policy areas 12 months ago, and I am happy to report that we have kept our promises.

One of the first decisions that the Rudd government took after our election was to ratify the Kyoto protocol and end our international isolation on climate change. The Liberals at the last election completely missed the boat on this issue. We can all remember that they refused to ratify the Kyoto protocol or put in place any lasting changes to fight global warming. They seem to forget that Australia is an extremely dry continent and that we have more to lose than other countries. The longer we take to act, the more Australia’s economy and environment will be hurt by droughts, less water, reduced food production and the devastation of natural ecosystems like the Great Barrier Reef and the Kakadu wetlands.

The costs of inaction are too great—and not just to the environment but also to the economy. As Professor Ross Garnaut recently said in his report on an emissions trading scheme, we face a diabolical challenge. He is right. There is no doubt that climate change is the challenge of our generation. However, in considering a policy response, we should not allow ourselves to focus just on the costs and forget the immense opportunities that have been presented to us.

We stand now with the potential to place Australia at the forefront of the international green revolution. Worldwide green investment in renewable energy and biofuels exceeded $100 billion last year. Green jobs worldwide now exceed 2.4 million. It is becoming more and more accepted that this green revolution will provide as many opportunities for countries, business and communities as the Industrial Revolution did over 200 years ago. This is an opportunity to build a modern Australia and a modern economy for the long term. But we need to act now.

To not act, knowing what we know about the effects, would be irresponsible not just to this generation but also to future generations, to our grandchildren and their grandchildren. I have heard the argument numerous times that somehow Australia is leading the rest of the world and that we should wait and be in the middle of the pack. That is not true. In fact, we are lagging behind the rest of the world in action on climate change. When you look at what is happening in Canada, Japan and the EU, we are falling behind.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

What is happening in China?

Mark Arbib (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator, for raising that. I have to say that China is doing some outstanding work in renewable energy. They should be congratulated. I am very glad that you raised this. The Chinese government have taken on board the issue of climate change. They are actually now putting billions of dollars into renewable energy and into cleaning up their environment. They are doing their bit. Australia has to do its bit. Thankfully—to respond further to the good senator—with the election of Barack Obama as President, we are going to see global action on climate change. Those of you who actually followed the US election will know that President-elect Obama is committed to introducing a national cap and trade scheme to reduce carbon pollution by 80 per cent by 2050. Rather than our somehow leading, it just shows that other countries are moving ahead and that we are starting to lag.

The Rudd government is doing its bit. The Rudd government has a detailed plan and a major commitment to reducing Australia’s greenhouse gas emissions. We are also working to adapt to the impacts of climate change that we cannot avoid. Most importantly, the Rudd government is working to shape a global solution to this global problem. We have all seen the work that Ministers Penny Wong, Peter Garrett and Martin Ferguson are doing in this field. The government has committed to a target of reducing Australia’s greenhouse gas emissions by 60 per cent of 2000 levels by 2050. The CPRS is at the heart of our efforts to reduce greenhouse gas emissions. As everyone in this chamber will know, it will place a limit on the emissions we will allow to be produced.

The key commitments of the Rudd government are these: to set a target of a 60 per cent cut to 2000 emissions levels by 2050; to set a medium-term target by the end of 2008; to expand the renewable energy target to 20 per cent; and to drive a clean energy revolution with policies such as establishing the $500 million Renewable Energy Fund, the $150 million Energy Innovation Fund and the $500 million National Clean Coal Initiative. We are also going to help Australian families green their homes with policies such as green loans, a one-stop green shop and rebates for energy-efficient rental homes. We are investing in green cars, in cleaner transport through measures like the Green Car Challenge and the $1.3 billion Green Car Innovation Fund.

I am very happy to report on the work we are doing in solar energy. In 2008-09, there will be more installations of solar power systems and more Commonwealth funding for solar power than in any year of Australia’s history. That, of course, is in line with the ongoing record demand. This has really been a revolution in Australia. We are seeing families and businesses flock towards solar power. It is happening not just at the government level but also at the business level and the community level. That is extremely pleasing for the government to see. Government spending and government support for the solar industry is at record levels. In the budget, the government brought forward an additional $25.6 million in funding, doubling the number of rebates available this year under the Solar Homes and Communities Plan from 3,000 to 6,000. Funding has been further increased in light of this record public support.

Here is where we bring in the work that is being done in terms of feed-in tariffs and the great work that is being done in COAG. The government is working with the states and territories through COAG to consider options for a harmonised approach to renewable energy feed-in tariffs. In March, COAG agreed to consider options and is expected to consider the issue by the end of the year. Many Australian states and territories have in place, or are planning to implement, feed-in tariffs, which will provide owners of small renewable energy systems with guaranteed fixed rates for the sale of electricity fed back into the grid. As other senators today have pointed out, Victoria, Queensland, Western Australia, South Australia and the ACT have feed-in tariff legislation in place, and New South Wales is considering it. To deliver on the 2020 target, the government is designing a national legislative renewable energy target scheme—also in cooperation with the states and COAG. And this is where the feed-in tariff fits in. The government believes that, with the CPRS, the renewable energy target and other policies, we will be heading in the right direction in terms of reducing greenhouse gases. At present, though, I am not in a position to support this bill and believe that the right way forward is through COAG.

On solar, I note that Senator Birmingham earlier criticised the government on the solar rebate and the means testing that was put in place at the May budget. Contrary to Senator Birmingham’s claims and the claims from the opposition that the means test would cause the collapse of the industry, what we have seen is an industry that is booming. There is extremely strong demand for the rebate currently, with over 750 applications per week. This is the highest level ever seen and vindicates the government’s decision to more carefully target the rebate. In the 12 months leading up to the last coalition budget, there was an average of 30 rebate applications per week. In the six weeks leading up to the introduction of the means test, the department was receiving an average of 365 rebate applications per week—365 per week. That has increased to an average of 750 applications per week now, and this figure continues to rise. Overall, in the first year of the Rudd Labor government, there will be more Commonwealth funding for solar power and more installations of solar power systems than in any year in Australia’s history. We are continuing to meet the demand of those Australians who need assistance to put in place solar panels on their roof. This is something that the government is committed to.

Minister Garrett has undertaken a series of roundtables with key stakeholders around the country, including the solar industry, on practical action households can take to save on their energy bills and reduce their environmental impact. These discussions will help inform the community of household assistance measures the government details in the transition to the CPRS. The Solar Homes and Communities Plan is one element in the government’s comprehensive suite of programs for household and community renewable energy and water efficiency, which also includes a $300 million commitment for subsidised low-interest green loans of up to $10,000 to help up to 200,000 existing householders. A further $480 million for the National Solar Schools Program, through which every one of our schools can install at least a two-kilowatt solar system and a range of energy and water efficiency measures; and the Renewable Remote Power Generation program, which provides up to 50 per cent of the cost of installing renewable energy systems, including solar power, to people who are not connected to a mains electricity supply. Renewable energy certificates generated by solar power systems will also continue to reduce the upfront cost of installing solar photovoltaic panels for all households.

Critically, as I have said, the government has committed to a target of 20 per cent of our electricity supply being powered by renewable energy by 2020 through an almost fivefold increase in the legislated national renewable energy target. This is not a small policy. This is going to require an additional 45,000 gigawatt hours of electricity generation from renewable sources. In terms of the Renewable Energy Fund, $500 million has been put forward. Australia’s renewable energy target is 20 per cent by 2020. The EU target is 20 per cent by 2020. Even China, Senator Bushby, has a target of 15 per cent by 2020. Britain’s target is 15 per cent by 2020 and the United States is also aiming for 15 per cent by 2020.

But that is not all we are doing in terms of renewables. We have a National Clean Coal Initiative, with another $500 million over eight years to accelerate the development and deployment of technologies that will reduce emissions from coal use. Let us look at the initiatives that were announced in the budget: $75 million for the National Coal Research Program; $50 million for the National Carbon Mapping and Infrastructure Plan; $50 million for a pilot coal gasification research plan in Queensland—and the list goes on and on. This is the work that the Rudd government is doing.

One area where it is very exciting to see progress is geothermal. I am happy to report that the government is making progress on this exciting new energy source. The potential for geothermal is just staggering. Geoscience Australia estimates that if just one per cent of Australia’s geothermal energy were extracted it would equate to 26,000 times Australia’s total energy consumption—26,000 times our total energy consumption. That is amazing. The government is taking action on it. The Minister for Resources and Energy, the Hon. Martin Ferguson, has launched the $50 million Geothermal Drilling Program to help get the industry over the short-term costs of drilling. The Geothermal Drilling Program will provide grants of up to $7 million on a matching funding basis to support the high cost of drilling deep geothermal wells to assist getting projects off the ground financially. The Geothermal Drilling Program is the first program to be launched under the government’s $500 million Renewable Energy Fund.

Many people are wondering how geothermal works. It is quite unbelievable. Geothermal energy producers pump water below ground, where it is heated by hot rocks and circulated through a closed system, with the heat energy used to generate electricity. I have heard the minister and the member for Kingsford Smith talk about this on numerous occasions. It is a good news story.

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time for the debate has expired.