Tuesday, 8 November 2016
I rise to speak on the cost of electricity and the need for energy security in my home state of South Australia. South Australia's recent blackout was a wake-up call that underlines the importance of energy security to all Australians. It is clear that we need a harmonised, national approach to energy policy across state and territory borders to achieve the three main objectives for energy policy: security, affordability and a lower emissions future. September's blackout in South Australia has reiterated that, above all, we need an energy supply that will avoid damaging disruptions. Aside from putting lives at risk, this disruption cost hundreds of millions of dollars across the state—costs that an already struggling South Australian economy can ill afford. Some of the state's largest employers, such as BHP, Nyrstar and OZ Minerals were without power for almost two weeks.
With the highest taxes, charges and electricity prices in the nation, South Australia now also has the most unreliable energy supplies in the nation. It is no wonder we have the nation's highest unemployment rate. The South Australian government are poor economic managers, but they are also poor managers of the state's electricity system. Former South Australian Premier Mike Rann had a vision in 2009 to see a 'state-wide green grid of renewable energy feeding into the national grid out of South Australia—in wind, solar, geothermal and wave' and, in doing so, assist eastern states reaching their own targets. Seven years on and we have overwhelmingly the highest electricity prices in the nation and reliability is also in question.
This is because the South Australian Labor government has an aspirational, overly ambitious, irresponsible energy policy. Forty-one per cent of South Australia's power comes from wind and solar. That has not only driven up the cost of electricity but it has also caused major issues with the security and stability of supply. The South Australian Labor government has ignored warnings that, by driving base load generators out of business too soon before we had the technology to effectively store wind and solar power, we cruelled our ability to ensure security of supply. I have no issue with reducing emissions; in fact, I am proud that our federal government exceeded our Kyoto target and now has a realistic target of 23.5 per cent emissions reduction by 2020, because that target is achievable and it will not come at the cost of consumers. I am not dismissing the valuable contribution that renewable energies, such as wind and solar, in particular, make to our energy mix. What concerns me is overly ambitious state-based renewable energy targets that have the effect of distorting the national market.
Every constituent in my electorate is living with the reality of Labor's poor economic management and bad energy policy. I had a phone call the other day from a concerned business owner in my electorate. He informed me that his current electricity purchase agreement was coming to an end and, under the new agreement, his business would pay a whopping $120,000 in additional costs in 2017. This is a small business operating two restaurants in regional South Australia. A $120,000 increase to his electricity bill will be difficult to absorb. I am also concerned about irrigators in my electorate. They are bracing themselves for a possible 30 per cent increase in the cost of transmitting water. Indeed, in its October newsletter the Central Irrigation Trust noted that it recently renewed its pumping stations energy contract for the coming 12 months. This contract is $1.3 million higher than was paid last financial year. The newsletter concludes:
If electricity prices remain at the current historically high levels into 2017/18 there would be no option but to increase water consumption prices between 15-30% to recover the increased costs.
Representing an electorate that borders the great state of Victoria, it is blatantly clear to me and to my constituents just what a bad deal South Australians are getting. We are paying over double what our neighbours across the border in Victoria pay for their electricity—and for a supply that is so fragile that caused us to suffer a state-wide blackout.
Our state and territory governments must come together to agree on a national approach to energy policy that is sensible and does not sacrifice affordability on the altar of ideology. The blackout was a wake-up call for South Australia, but the position that South Australia finds itself in should serve as a warning to all government across the nation.