Dave Sharma (Wentworth, Liberal Party) Share this | Hansard source

It's a pleasure to talk today on the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020, but first I did want to thank my colleague the member for Macnamara for his concern for my welfare and wellbeing and I did want to assure him and others opposite that I'm entirely comfortable and relaxed—in fact, enthusiastic—about the government's energy policies and I feel entirely comfortable, relaxed and enthusiastic in explaining and articulating those to my constituents.

I think this is an important bill but, to understand why we are here, it's important to understand the journey, the story of how we got here, and it's the story of the energy transition that's underway in Australia. I know that this inflames passions amongst many people, but, to me, it has a sense of historical inevitability to it. It's like many of the industrial or energy transitions that humanity has been through before, in many iterations of our history.

This journey in Australia is underway at quite a remarkable rate. It was just a few weeks ago that the Clean Energy Regulator estimated that a record amount of seven gigawatts of new renewable energy capacity was installed in Australia last year. That is a record. It beats by 11 per cent the figure for 2019, of 6.3 gigawatts, and that 2019 figure was itself a record, beating the previous record of 2018, and on it goes. The increase in renewable energy capacity in Australia is underway at an exponential rate.

It has been, by and large, a solar installation boom that has driven this new record—notwithstanding the fact that COVID-19 restrictions did impact on the ability of solar rooftop installations to continue throughout last year. We're now in a situation in Australia where 2.2 million Australian homes, or roughly one in four Australian homes, have solar, which is the highest uptake of household solar anywhere in the world. In fact, in 2019, the last year for which these sorts of figures are available, Australia deployed new renewable energy capacity at least 10 times faster per person than the global average and four times faster per person than market countries such as Europe or the United States or China. It was 10 times faster than the global average and four times faster than OECD countries. In 2020, Australia invested $7.7 billion, or $299 per person, in renewable energy. This places us ahead of countries like Canada, Germany, Japan, Korea, New Zealand and the United States on a per-person basis. In fact, Australia now has the highest solar capacity per person of any country in the world, at 644 watts per person, and the highest wind and solar capacity of any country outside of Europe, at 804 watts per person. These are all good stories.

Over the last quarter of 2020, the share of renewables in the national electricity market—the main electricity market taking in most of the eastern states of Australia—exceeded 30 per cent, which is another first. In 2020, a record 53.6 terawatt hours of electricity was generated from renewables, including rooftop solar, in the national electricity market. Again, this is 16 per cent higher than the previous record, which was set in 2019. The strong investment in renewables is forecast to continue. Australia is projected to deploy an additional 24 gigawatts of rooftop solar by 2030. That's on top of the 6.3 gigawatts we installed in 2019 and the seven gigawatts in 2020. That will mean a tripling of the nation's small-scale solar generating capacity over the course of a decade.

The important lesson from all of this, I think, is that progress here is not linear; it's exponential. If you look at the years 2007 to 2013, for instance, when those opposite were in government, the policy imperative to switch to renewables was just as high but the technology was not as cheap, not as widely available and not as commercially competitive. In that six year period we managed to install a total of 5.6 gigawatts of renewable energy capacity—5.6 gigawatts over six years. Last year we installed seven gigawatts, the year before that we installed 6.3 gigawatts and in the next six years we expect to install another 24 gigawatts.

The story is positive elsewhere too. In the year to June 2020, emissions fell three per cent to their lowest level since 1998, and our emissions now are nearly 17 per cent below our 2005 levels. If you want to compare that figure to elsewhere, the OECD average for emissions reductions across the same period is nine per cent; in New Zealand it's one per cent and in Canada it's less than one per cent. As members here would know, our Paris emissions reduction target is 26 to 28 per cent below our 2005 emissions levels by 2030. The year is 2021, and we are already down 17 per cent on our 2005 levels; we are more than halfway there. It's clear to me that we will be able to meet our Paris emissions reduction target and that we will be able to do this without use of our Kyoto credits—which, I hasten to add, were legitimately earned by virtue of the fact that we beat our 2020 target by 459 million tonnes of CO2 equivalent.

This energy transition that is underway in Australia—and it is a remarkable story of transition—is not being driven by government fiat, new taxes or the exhaustion of fossil fuels. Like nearly every other major economic and energy transition that we've been through in our history, as a species, this transition is being driven by the availability and affordability of new technology, by commercial imperatives, by consumer appetite and by investor sentiment. The bill we are debating and discussing today, the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020, is another step in this direction.

It was in October 2019 that the government announced the introduction of a new $1 billion Grid Reliability Fund. This fund, which will be administered by the Clean Energy Finance Corporation, will support investments in new energy generation, storage and transmission infrastructure, including eligible projects short-listed under the Underwriting New Generation Investments program. The CEFC Grid Reliability Fund bill will amend the Clean Energy Finance Corporation Act 2012 in order to implement and create the Grid Reliability Fund. Specifically, it will establish a $1 billion Grid Reliability Fund through a new special account, to be administered by the Clean Energy Finance Corporation, and allow for permits for regulations to expand this appropriation in the future so we can put more money into this fund. It also establishes a new category of Grid Reliability Fund investments, which are to be funded from this GRF special account. The GRF, the Grid Reliability Fund, will enable the Clean Energy Finance Corporation to invest in additional energy generation, storage, transmission and distribution infrastructure and grid-stabilising technologies. This will provide, over time, for greater affordability, reliability, stability and security of the electricity system, ensuring that, as we transition to more renewable energy in the grid, we combat intermittency and we ensure that the power provided is reliable and affordable. Providing the CEFC with an additional $1 billion will benefit energy market participants by providing a trusted counterparty for grid reliability investments and allowing the government to leverage private sector involvement and investment.

The Grid Reliability Fund will help ensure that Australia's world-leading deployment of renewables is integrated and backed up. As I said, it will support private investment in storage and transmission infrastructure and new reliable energy generation. As Australia recovers from COVID-19, affordable and reliable power will be critical to growing the economy and creating new jobs. Equally, for our survival as a nation and a species, it is important that we continue the transition to a lower emissions future. Australia's experience throughout this has been that, when new technologies become economically competitive, households and businesses rapidly adopt them. We are seeing that firsthand with renewables right now. On an energy-only basis, costs have fallen rapidly, and we've seen $30 billion invested in renewable energy since 2017. As I said earlier, Australia is now deploying new wind and solar 10 times faster per person than the global average and four times faster per person than places like China, Japan, the United States and Europe. One in four Australian households have solar panels on the roof or elsewhere around the home. In 2019 the share of wind and solar in Australia's electricity grids was more than double the global average, and it is projected to rise rapidly in coming years.

Of course, all of this renewable energy in the grid brings new challenges. While there's no shortage of investment in clean energy, the government has identified a lack of investment in the dispatchable generation needed to support the increase of intermittent generation. We need more flexible backup generation and storage, pumped hydro, batteries and, yes, gas to balance and integrate high shares of renewable energy. By focusing on getting the cost of new technologies down, we won't raise the cost of incumbent technologies, like coal and gas, that continue to play an important role in the energy mix.

The Grid Reliability Fund will work alongside the government's Technology Investment Roadmap to ensure affordable and reliable energy for all Australians while reducing our emissions. Eligible investments will include energy storage projects like pumped hydro and batteries, transmission and distribution infrastructure, grid-stabilising technologies and other eligible projects identified in the government's Underwriting New Generation Investments project. Importantly, the fund will not divert the CEFC's existing $10 billion allocation away from clean energy projects. The Grid Reliability Fund is $1 billion on top of that.

Some examples of projects that the Grid Reliability Fund could support in New South Wales include the creation of renewable energy zones, like the proposed Orana REZ; upgrades or extensions of the transmission network to support improved interregional trade and the reliability of grid stability; and dispatchable generation projects, like the UNGI short-listed Armidale pumped hydro project or the Port Kembla gas project. In Tasmania, projects that could be supported include the Marinus Link and the Battery of the Nation renewable pumped hydro projects. In South Australia, projects like Project EnergyConnect, the Baroota Pumped Hydro Project and the Reeves Plains gas project could be supported. In Victoria, projects could include improved transmission infrastructure projects, like the proposed VNI West project, and dispatchable generation projects, like the Bairnsdale gas upgrade or the proposed Dandenong power station. In Queensland, projects could include new transmission projects, such as CopperString 2.0, and dispatchable generation projects, like the proposed Cressbrook reservoir pumped hydro project near Toowoomba.

I know those opposite have difficulty with gas. They have difficulty with fossil fuels more generally. It's the case at the moment that coal continues to provide roughly 60 per cent of our power generation in Australia, and, whilst that percentage will undoubtedly lessen over time, it will remain an important part of our energy mix for the future. Anyone who follows this issue closely and invests it with the seriousness it deserves understands that, until such time as large-scale storage projects come down in cost, particularly battery technology or potentially hydrogen, we are going to be relying on gas to play more of a role in firming our grid and to allow the transition to a cleaner future, where renewables play a bigger role. That's the simple fact. The Chief Scientist, Alan Finkel, has laid this out quite clearly. Until at least 2030, possibly longer, we will need gas as a stabilising force within the grid to allow us to put more renewables into the grid and ensure that intermittency does not become an issue.

Fundamentally, I am an optimist about our ability as humans, as a species, to overcome some of the challenges that are placed before us. I don't think this is by any stretch the greatest challenge we've faced. There was Thomas Malthus's prediction that famine was an inevitable part of the human condition and would permanently limit the population of the earth. When Thomas Malthus wrote this in 1798, the world's population was 800 million people. Today it is 6.7 billion people, and on average they are much better nourished and much better fed, with much better life expectancy and a much better quality of life. Or there were the worries in the 1990s about the rapid depletion of the ozone layer. When the ozone hole was first discovered in 1982 it caused panic at the time, and rightly so, but today—you'd have to look this up because it's not in the news any more—the hole in the ozone layer is the smallest since it was first discovered in 1982.

Mr Bandt interjecting—

Because we did do something about it—I take the interjection—just as we are doing something about CO2 emissions in Australia.

Mr Bandt interjecting—

I take the member for Melbourne's interjection. As I say, this is not an argument for complacency; it is an argument against the counsels of despair that we hear too often in this debate, including from people such as the member for Melbourne.

Based on our ingenuity and our innovation as a species, I believe that getting the world to net zero emissions by 2050 is achievable. I would like to see Australia do it. I'd like to see us do it sooner if possible. As the Prime Minister said in his Press Club address earlier in the week, we need to focus not on the what but on the how. It will ultimately be the commercial availability of technology that drives this—our success in engineering new industrial methods, our ability to create renewable liquid fuels, our vision in reengineering our transport system, our success in creating new carbon sinks in the soil and elsewhere. These are fundamentally practical challenges of the sort we have overcome many times in our history. If we solve for these, we solve for net zero. So let's focus our efforts here.

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