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

I move:

That the Senate take note of the answer given by the Minister for Climate Change and Water (Senator Wong) to a question without notice asked by Senator Milne today relating to renewable energy.

My question to Minister Wong was particularly in relation to whether the expanded renewable energy target would increase or decrease wholesale electricity prices. We are in a complete mess today because of the renewable energy target not being able to come on for debate and be agreed to in this fortnight, therefore leaving the renewable energy industry high and dry, with people losing their jobs and investment not being able to be made in the coming months. That is because the government made the decision to exempt the big polluters from the renewable energy target. If it had been left as a straight expanded target of 20 per cent I think there is every chance we would have got it through in this fortnight.

The decision to exempt the big polluters was on the assumption from the government, based on the special pleading of the big polluters to the government, that the renewable energy target would increase electricity prices. That is why I asked what the government’s view of that was. We know the modelling from ROAM Consulting, ACIL Tasman and CRA has all said that there would be downward price pressure as a result of the renewable energy target. The rationale for that is that loading the grid with extra power from wind and solar generators will remove the need to fire up gas plants when demand peaks and existing electricity supply cannot keep up. It is when peaking gas plants swing into action to top up supply that wholesale electricity prices go through the roof. Such episodes account for about a third of the total yearly wholesale take. If you displace the need for these extraordinary pricing episodes and the wholesale price settles down to a more comfortable average, you actually overall get a lower price. That is the advice from those three major consulting firms.

From what I can see, the government has relied on one report, the McLennan Magasanik report. But even that concluded that the RET scheme would have only a modest impact on wholesale power prices. The Herald Sun reported:

Using the CRA modelling, the cost to electricity retailers of RET in 2015 would be $910 million …

However, the reduction in wholesale electricity prices of including more renewable energy would be $10.9 billion …

The conclusion is that the impost on retailers due to RET should be overwhelmed by the reduction in wholesale pool prices, in this case by a factor of 10 …

So I think it is critical that the government explains to the community why it is making the assumption that you are going to have prices increase under the RET, when you have several analyses showing that in fact they will decrease. Why on earth would we be exempting the major polluters when we actually have such a good news story? It is a good news story because you are reducing your greenhouse gases from fossil fuels, you are giving incentives to new investment and jobs in the clean energy sector and you are avoiding the use of peaking plants, which are the drivers of higher electricity costs.

I think it is imperative that the government actually goes back and looks at this, because there is no justification for these exemptions. If you got rid of those exemptions and if you did the figures and showed that this is actually going to drive energy prices down then you would get this legislation through. The coalition, the Independents, the Greens and the government all support an increase in the renewable energy target, because it is important for new jobs, new manufacturing and good investment. It is part of the excitement of the future. There was a report out this week about how 28,000 jobs are likely to be generated from the renewable energy target. The only thing that is stopping us is the government’s assumption that the prices will go up. It is listening to the special pleading of the big polluters and exempting them from the RET by linking it to the CPRS, which wrecks the whole thing. This has been a political ploy and it is based on a complete lack—

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

Why don’t you have a go at the opposition?

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

You’re the government.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Milne has a right to be heard.

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

This is a typical position from you. We’re the ones pushing for it. Why don’t you go and tell your constituents what you’re doing?

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Wong, I have asked for order.

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

Thank you, Mr Deputy President. As I have been saying, there is overwhelming support in the parliament for the renewable energy target. The reason that it is not going to go through is because of a decision to link the renewable energy target to the Carbon Pollution Reduction Scheme based on a false premise.

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

They voted against it. You’d think you were a member of the Liberal Party!

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

I do not excuse the coalition for the delay. That is why I opposed the delay this morning. I absolutely opposed that delay.

Question agreed to.