Andrew Broad (Mallee, National Party) Share this | Hansard source

It is good that the House is talking about energy policy. I have the great privilege of chairing the House of Representatives Standing Committee on the Environment and Energy, and long before there was a blackout in South Australia we had identified that we should have an inquiry into the electricity grid. It is funny how it has suddenly become the political topic of the day when it really should have been something that was discussed and determined a long time ago. My involvement with the issue of how we ensure we have reliable electricity goes all the way back to the Carbon Pollution Reduction Scheme, when I was in the Victorian Farmers Federation. I remember having a discussion with Tony Windsor at the time—this was when the Independents held the balance of power—about trying to ensure we kept the carbon price off transport fuels, which was of course so relevant to regional Australia.

I want to touch on a few things that our inquiry has found, because they do feed into this discussion and into some of the findings of Professor Finkel in his recent report. There are three components to electricity. There is electrical energy; there is stability, or inertia; and there is reliability. Those three components have to exist if we are going to have a grid that people will invest in in the future. My fear, of course, is that the South Australian experiment largely has not tackled those three components, and we therefore are seeing a great deal of unreliability in the South Australian electrical grid. Talk to the CSIRO and they will tell you that once you get above 40 per cent renewable, if you have not addressed stability and reliability, you will see the grid become largely unstable. That is the case in South Australia, where it is now up to 47 per cent. It is quite aspirational—full marks to them—but it has not worked because they have not addressed the other parts of the grid, which are essential. They have a vision of addressing those concerns through battery technology, but our findings are telling us that batteries do not work once you get above 40 degrees Celsius. That is a concern for us, because the time when you are going to need to draw down to get the additional power will be those hot days when the wind is not blowing, and then you have a battery reserve that is not going to work.

In contrast, the battery that does work is pumped hydro, and I commend the Prime Minister for his commitment to expanding Snowy Hydro mark 2. What I would say is that if they are going to look at how you can use wind and solar within the mix then they should have an MOU with pumped hydro so that when it is windy they can pump water up a hill and when it is not windy they can turn the tap on and run water down. It is a natural mix. One of the things our inquiry will probably lean towards is the realistic discussion going on about a second Basslink on the west coast of Tasmania, which could feed in with the winds of the roaring forties and also pumped hydro.

I think we need to be very careful not to demonise coal. I know some here will disagree with me, but if you stood behind the exhaust of a 1960s car you would see a very dirty exhaust stream coming out the back, and that was the issue with Hazelwood, a 1960s power station, still burning coal. If you look at a modern coal-fired power station—one still burning the same fuel—you will see you can have substantially reduced emissions for fairly efficient generation.

An opposition member: That is like saying you could look at a modern steam locomotive.

Well, you might have driven one of those. You probably have one of those 1960s cars. Coal is still going be part of our mix, and we are denying reality if we are not tackling it as part of our mix. Coal-fired power stations will continue for quite a while.

Could I add that the thing driving electricity prices in the short term is the substantial increase in gas. Gas is our quick turn-on, turn-off power generation source. We do need to reduce the export of gas whilst we are waiting to bring more supply into the gas market. The magic figure is $8, and that will then bring our power prices down to $75. These things are not addressed in the Finkel review. They need to be quite interventionist policy rather quickly, in my opinion. The Finkel review provides a discussion for two, three and four years from now, but this requires an interventionist policy that addresses our concerns in the next months.

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