Zali Steggall (Warringah, Independent) Share this | Hansard source

I rise today to speak on the Offshore Electricity Infrastructure Bill 2021 and accompanying bills. These bills will introduce a regulatory regime to enable construction, installation, commissioning, operation, maintenance and decommissioning of offshore electricity infrastructure. I will pause to note that in certain circumstances the Morrison government is happy to introduce regulation and legislation; it just likes to pick and choose which ones it does. The framework is long overdue. Energy developers have been waiting for the certainty this will provide. Subject to sensible amendments, these bills should be passed without delay.

The purpose of the framework—and, of course, I support that there be a framework, because it does the job it needs to do in giving certainty—is for the establishment of an offshore wind energy industry in Australia that will also support projects like the Marinus Link and Sun Cable. Offshore wind energy, in particular, has remarkable potential to generate jobs, bolster and diversify energy supply, drive down electricity prices, improve grid reliability and lower greenhouse gas emissions. This would be a win-win-win.

Whilst onshore wind now accounts for only 10 per cent of Australia's power, to date we are lagging so far behind other nations in developing our offshore wind capacity. For example, in the United Kingdom they've been developing their industry since 2007 and they already have over 10 gigawatts of offshore wind capacity installed. Prime Minister Johnson has put expanding the industry at the centre of his 10-point plan for a green industrial revolution. The UK is aiming for 40 gigawatts offshore by 2030. This year Denmark greenlit the biggest offshore project in the world—a 28 billion-euro artificial energy island that will power three million homes. That is visionary and ambitious. Denmark currently generates a remarkable 40 per cent of its electricity from wind power. Australia needs to catch up.

Australia's wind resources are some of the best in the world. We have 60,000 kilometres of coastline and high-capacity factors in excess of 80 per cent in some areas. Much of these resources are situated close to existing transmission lines and port infrastructure, so there is enormous potential to develop a substantial industry. Blue Economy has estimated Australia could support over 2,200 gigawatts of capacity, which is more than our current energy demand and more than enough to make us a renewable energy superpower—which should be our aim. Traditionally wind energy has been expensive, but that is changing; with economies of scale, research and development, and competitive tendering mechanisms, offshore wind may cost less than onshore wind in the future. Developers see this opportunity. There are 12 offshore wind projects with a combined capacity of 25 gigawatts proposed in Australia already. One project off Gippsland, the Star of the South, could be worth $6 billion for their regional economy and could generate 3,000 jobs over its lifetime. This project would also support up to 20 per cent of the state's energy needs—the equivalent of 1.2 million homes. This is a huge benefit.

The irony is that many critics—and I should note the Deputy Prime Minister's comments in question time some days ago—will say we should have offshore wind off for Warringah. The truth is: these developments will provide communities with enormous potential for industrial development. We need to put the right technologies in the right places, where there is need, demand and workforce.

Beyond Zero Emissions's analysis has found that developing offshore wind would revitalise industry in regional hubs. They projected that Newcastle, for example, could attract $28 billion in capital investment and $11 billion in revenue by 2032, and generate 34,000 jobs. Surely this is the type of project that should be embraced, not crazy projects like gas off the coast of Newcastle, like PEP-11. AEMO has indicated that other areas like north-west Tasmania, Gippsland and the Illawarra have the same potential and could support many gigawatts of offshore wind energy each. Developing these resources is essential, as we will need to provide workers in those areas with real alternative employment in sectors other than fossil fuel mining, as mines and power plants retire. Blue economy projects could generate up to 8,000 jobs per annum from 2030 by developing our wind energy resources to the highest level. But more and can and should be done to support the renewable energy sector so that we reach our climate goals. ClimateWorks in its landmark Decarbonisation Futures report has modelled that in a scenario where we would decrease emissions by up to 50 per cent by 2030—and this is very real and very possible—and reach net zero by 2050 we will have to reach 75 per cent renewable by 2030, and sadly there was none of that detail in the government's plan slideshow that was announced yesterday.

We can and should aim higher. We have the potential and we can exceed the targets. It would require policy support and shoring up investment confidence. The Clean Energy Council and the Clean Energy Outlook Confidence Index reported in July that investor confidence has decreased since December 2020. The report put this down to grid connection issues, underinvestment in network capacity and transmission, unhelpful and unpredictable government interventions and future market design uncertainty. Sadly, none of this was addressed by the Morrison government yesterday. As a result, in August, the Clean Energy Council reported that there has been a loss of jobs in this sector due to a corresponding slowdown in financial commitments for renewable projects.

This bill is a good development. It shows what positive government intervention and support can do. But we must look to the government to act in so many other areas. The government, for example, should drop its misguided Kurri Kurri gas plant obsession. This is a $660 million mistake that won't support liability or lower electricity prices. It will barely be used. It will spook investors and should be scrapped. The government should also drop plans for their gas-fired recovery and focus on a clean recovery, developing renewable energy capacity at the centre of any plan.

The Energy Security Board has created considerable uncertainty with energy developers and investors in propagating the options of a post-2025 market design for the National Electricity Market. Of course the federal government has endorsed this, because it's ultimately a coal keeper; this is just a means and design to keep coal in the system. This policy could prolong the life of ageing coal-fired and gas-fired generators. We've heard in the environment and energy committee inquiry into dispatchable generation that coal-fired generator owners like Delta Electricity are very much expecting that that will be its use and that will be its purpose. The final design of the market must have at its centre a decarbonisation goal and cannot unnecessarily give thermal generators a new lease on life. We must understand who will bear the cost and what effect it will have on reliability and affordability. This will ultimately be a tax on the everyday energy user.

We cannot talk about energy without putting it in the context of our greater priorities and what we must do. We absolutely must address the environmental aspects and our need to decarbonise rapidly. In the context of this offshore wind project, we also need to make sure they have adequate environmental safeguards for any offshore development. As drafted, the bill requires a license holder to submit a site management plan to NOPSEMA, but this will not necessarily address all environmental impacts. Instead, licensees just have to comply with the Environment Protection and Biodiversity Conservation Act and regulations under that act. We know that the EPBC Act is incredibly limited in the sense that it won't encompass all marine impacts. Some matters are just not protected. There is no visibility on what those potential regulations are and therefore does not appear to have any environmental assessment requirement.

In contrast, in the United Kingdom offshore projects are required to undergo a strategic environmental assessment detailing possible environmental impacts and remedies. This is a best practice and holistic way of addressing all impacts. Strategic environmental assessments should be triggered before declaring an area suitable for infrastructure. It would ensure that only appropriate and low-impact areas are chosen and that decisions can be made before any investment timewise or financially for a project proponent. It's an industry where people are thinking about the future of steel production and coalmining in that area and looking to the future. Well, here's an example of something that provides a bridge to the future and an opportunity for manufacturing this industry within Port Kembla and for servicing the industry through the port, creating jobs that are sustainable into the future for people living within that community.

This bill establishes a regulatory framework for electricity infrastructure in the Commonwealth offshore area, beyond the three-nautical-mile limit. The bill allows for the construction, installation, commissioning, operation, maintenance and decommissioning of offshore wind and electricity infrastructure. Around the world, there's more than 35 gigawatts of offshore wind capacity now in operation, and that's expected to rise to 80 gigawatts by 2030. By comparison, Australia's entire market is 55 gigawatts. There are more than a dozen offshore wind proposals in Australia, and these promise enormous capacity and tens of thousands of jobs. Importantly, as I mentioned, these proposals are alongside traditional energy industries and regions.

There are some issues associated with this that need to be dealt with through the regulatory framework, and Labor has been campaigning for many years now for the government to fix those issues with that regulatory framework. It's regrettable that the benefits to be gained have been delayed by the government. The government promised that the legislative settings and frameworks were aimed to be in place and operational by mid-2021, yet once again they didn't deliver.

This bill's major provisions will allow the energy minister to declare a certain area as suitable for offshore electricity infrastructure and to establish a licensing regime for offshore electricity activities. Importantly, it requires developers to pay bonds to cover the estimated cost of decommissioning their infrastructure, which is important given the recent difficulties with the Northern Endeavour oil facility; requires management plans for each project, covering environmental management, work health and safety, infrastructure integrity, emergency management, consultation and financial security; designates the National Offshore Petroleum Titles Administrator, or NOPTA, as the registrar for licensing schemes; designates the National Offshore Petroleum Safety and Environmental Management Authority, or NOPSEMA, as the regulator of offshore electricity infrastructure; and provides both NOPTA and NOPSEMA with compliance and enforcement powers to carry out these functions. So these are important regulatory changes that this bill will bring into operation. The second bill, the Offshore Electricity Infrastructure (Regulatory Levies) Bill 2021, provides for the cost of the new functions of NOPTA and NOPSEMA to be recovered from industry, consistent with current arrangements for offshore oil and gas.

This is a plan that is supported but is long overdue. When you think about it, given the size of the Australian coastline and the fact that we are an island, it's almost criminal that this government hasn't thought of this and introduced these regulatory changes before, because the industry has been there. The demand for this has been there. The innovation is there. The investment is there. The job opportunities are there. The only thing that hasn't been there is the willingness from the Morrison government to implement it.

That's because, as we've seen this week, there is still a group of individuals—predominantly in the National Party but many in the Liberals as well—who don't believe that climate change is real, unfortunately. They don't believe that it is happening, and they have held up the development of what could have been one of the most important and largest renewable energy industries in the world, with unlimited potential for investment, for technology advancement and for job creation. This has been held up by a handful of people who don't believe in climate change and continue to think that we can continue with outdated old polluting industries well into the next 20 or 30 years without having to make any changes. That is so backward and such a missed opportunity not only for our country but, importantly, for the regions, as I mentioned, where these jobs will be created in the future.

Thankfully, the government has finally come to the party but this is not enough. This alone will not help get us to net zero by 2050. What is needed is a fair dinkum commitment to ensuring that there are measures in place, not only to reduce pollution amongst heavy emitters but also to encourage the uptake of electric vehicles, the development of a hydrogen industry in this country, the development of solar farms, the exporting of the energy that is generated through solar and wind farms. The opportunities are boundless. They are boundless yet they are being stifled by this government. Hopefully, these bills and what has been announced this week will make them wake up that it is now time to put aside the climate wars, it is now time to stop weaponising climate change in election campaigns, it is now time to do what is in the interest of our nation for our kids' futures and it is now time to provide opportunities that renewable energy projects like those that will come as a result of this regulation will bring.

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