Monday, 11 September 2023
Greenhouse and Energy Minimum Standards Amendment (Administrative Changes) Bill 2023; Second Reading
The rising cost of living means people across the country are doing it tough, and energy bills are a big contributor. After a decade of energy policy failure we have been left overly dependent on expensive coal, gas and imported foreign oil, and Australians are paying the price, with one in 10 people skipping meals to pay their energy bills. Luckily, one of the biggest levers available to reduce the cost of living is close to home. Transitioning households and businesses away from expensive and inefficient fossil fuel appliances and towards cheaper and more efficient electrical alternatives is a $300 billion opportunity to permanently reduce our power bills.
Minimum standards really matter for this transition to cleaner, cheaper energy. They matter when you're buying a property, when you're a renter, in the office and in the factory because our power bills and our carbon emissions are driven by the energy we use from the appliances in our homes and in our businesses. Because these appliances can be quite expensive, we don't tend to buy them very often, so the choices we make when we do, when we decide to buy a new fridge for our home or an air conditioner for our business, lock in energy costs and carbon emissions for several years to come. The role of minimum standards and of product labelling is to help consumers make the best choice for their hip pocket and the planet. They can steer us towards buying appliances that use less energy and so are less costly to run, and they can prevent us from buying old and inefficient models which might have a good-looking price tag but will hurt us in the long run.
By setting minimum standards and labelling requirements for small and large energy-consuming items, the GEMS Act has played an important role in bringing power bills down for Australian homes and businesses. Indeed the current provisions in the act are estimated to save the average household between $140 and $220 per year on their electricity bill. This legislation strengthens the GEMS Act further by improving the flexibility of administration and making compliance easier for business, but there remains more work to be done. The 2019 independent review of the GEMS Act, conducted by Anna Collyer, now chair of the AEMC, made 40 recommendations on how the regime could be improved, eight of which require legislative change. This bill implements just two of the legislative recommendations, which means important gaps remain, and I want to speak briefly to two of those gaps.
The first gap relates to the scope of products covered by minimum standards and labelling requirements. Energy Consumers Australia estimate our current requirements cover only around half of the products of comparable countries. This means we have a big untapped opportunity to further reduce household power bills and emissions by expanding the scope of the GEMS regime further. If peer countries can do this, so can Australia. I want to echo calls from Energy Consumers Australia, the Energy Efficiency Council and the Smart Energy Council to expand the coverage of the GEMS Act at the earliest available opportunity.
The second gap is the lack of mandatory demand-response provisions under the GEMS Act. As AEMO's report highlighted the other week, Australia faces real challenges when it comes to the pace of our transition and to the reliability of our energy supply. Coal plants are ageing and unreliable, gas remains expensive and we haven't done enough to get new, cheaper renewable projects on line. AEMO's report also highlights that distributed energy resources and demand response are big opportunities to address these challenges. If we can shift electricity to better balance supply and demand, we can deliver lower power prices and more reliable electricity supply. Demand response can lower the amount of electricity required from the grid during peak periods, reducing the likelihood of a blackout. It can shift demand to off-peak periods, or when renewable energy output is high, so that we use excess electricity more efficiently, and it can even help bring down wholesale electricity prices, which increase when demand is high.
The minimum standards that apply to our largest electrical appliances will determine whether we can use demand response or not. At the moment, there is no mandatory demand response provisions in the GEMS Act. This means we have a big untapped opportunity. For example, industry estimates suggest that demand responsive air-conditioners in New South Wales have more capacity than two coal-fired power stations combined. Rather than use taxpayers' money to bail out another ageing and unreliable coal plant, it makes sense to take advantage of the demand response opportunity. This was an important recommendation of the 2019 independent review and needs to be progressed with urgency.
Also, though it's outside the scope of this bill, I urge the government to go further in household electrification and support for households to do this because this is good for the environment and good for households who are hurting so badly at the moment. The government has the opportunity to be a much stronger leader in this space. The government has the opportunity to ensure that new houses do not have gas connections, because we know that pumping fossil fuels into new houses doesn't make sense now and will not make sense in the future. We know that the government could go further and should go further in ensuring that there are strong financial incentives for households to move on to efficient electrical appliances. We know that the government should support a one-stop shop so that consumers and households across the spectrum—from renters in a 100-apartment block, to people who own their own home—know what steps they need to take and have a practical, well-informed and clear evidence base for their finances, in terms of how to step out of fossil fuels and into clean energy.
Finally, the government can increase standards across the board to ensure that renters, in particular, get homes and households that are energy efficient. The government needs to be more ambitious now. We can make a bigger difference right now, and that will make a difference to people's lives but also support this transition when it is so difficult to get the transmission right across poles and wires.
I know the minister and assistant minister are committed to further strengthening the GEMS regime. I welcome the commitments made in the May budget and the assistant minister's second reading speech, and I look forward to the upcoming publication of the National Energy Performance Strategy. These are important initiatives, and I commend the government for them. I also welcome the very constructive discussions that other members of the crossbench and I have had with the assistant minister over the last few days, both in relation to expanding the GEMS regime and to working through the details incorporating demand response into the act.