David Van (Victoria, Independent) Share this | Link to this | Hansard source

Our energy system is incredibly complex, not just from a technical point of view but also geographically, jurisdictionally and politically—and I say 'politically' not just because each of the major parties at both the state and the federal level disagree on policy but also because many of the players, public and some private, have their own patch that they want to protect or grow. This complexity is magnitudes greater as we transition to a low-carbon future.

This complexity is too dense for most voters to penetrate, even if they're willing to try—and I don't suggest they do. But policymakers and the implementers of those policies do little to explain it because of this complexity; complexity does not make for good sound bites in the media. Instead, it is easier to simply say, 'Let's trust the experts; they know what they're doing.' That approach may be fine if voters can be assured that someone is providing oversight on what the experts are proposing: review those plans and assess them on the basis of economic efficiency and contribution to the national interest. This should then be reported to governments and further tested through public fora, as we have said at estimates here, so that that advice as well as the agency giving it and the parliamentarians testing it are publicly held to account by the voting public.

This is what is known as good governance. This is what the Senate energy committee that reported just before Christmas inquired into, and found that there is little that can be counted as good governance in our energy system. This is allowing huge bets to be made that put our energy reliability and affordability at risk, with huge potential implications for our economy and the transition to a net zero future.

We are in a transformative period driven by decarbonisation. Rapidly emerging technologies increasingly engage consumers as well. Yet the framework we rely on is outdated and fundamentally ill equipped to handle these modern realities, as demonstrated in the energy inquiry. Australia's energy governance structures are no longer fit for purpose. An independent sector-wide review is urgently needed to bring transparency, accountability and economic sustainability to a system that serves every Australian. The ISP, which is the plan that we follow, is there to guide Australia's energy transition. Yet, after four ISPs since 2018, there is little to show for the effort and expense invested by the Australian Energy Market Operator in those plans. While some of the mega projects might have started out under different names, few are finished and others have not even started. Questioning of these projects has got louder and louder as capital costs and timelines continue to grow exponentially.

The danger is that delay risks our energy transition and stifles investment in other opportunities. For example—and this is just one—the huge pumped hydro project, Snowy 2.0, is massively delayed and over budget. Now, I'm not arguing against Snowy 2.0. But if it had undergone proper economic assessment it would likely have been delayed, and now we would have already built other smaller pumped hydro storage facilities that would be providing the storage for firm renewables and probably more in quantity and capacity than Snowy ever will.

The upshot is that one of the great weaknesses of the NEM is that we have woefully inadequate storage because opportunity cost was ignored—and still is. Without proper planning and rigorous oversight, the ISP is driving us down a path that is neither the most effective nor the most sustainable for Australia. The time has come for a comprehensive re-examination of the sector, and the Productivity Commission is the best body to lead that review, as it is well placed to assess every facet, from regulation to planning to governance— (Time expired)