Monday, 11 September 2023
Greenhouse and Energy Minimum Standards Amendment (Administrative Changes) Bill 2023; Second Reading
I rise to speak on a seemingly machinery-type bill about regulation and setting modern standards, but there are a few issues in here that raise an even deeper and broader problem. The Greenhouse and Energy Minimum Standards Amendment (Administrative Changes) Bill 2023 on the surface proposes minor changes that allow all appliances that are running on energy in the modern world—from your computer through to your kettle, your air conditioner or your fridge—to have, with this new scheme, maybe different scales on the little rainbow of stars on white goods, or maybe descriptions of equipment as having a better carbon footprint. All in all, efficiency is always good, in appliances as well as in the economy, but there are a few terms that kept appearing in the second reading speech about demand and facilitating demand management as one side of our efforts to reduce energy costs. This feeds into some concerns about the Integrated System Plan AEMO's making, which the good minister in the corner is very familiar with and which we've spoken about before. Modernising and updating the GEMS Act will support the National Energy Transformation Partnership and support the delivery of the National Energy Performance Strategy.
On the middle of the second page of the second reading speech delivered in the Senate, it talks about, again, demand-side measures:
Demand-side measures including improving the energy efficiency of appliances and equipment supplied in Australia can support Australia's net zero target.
I thought I might just add a bit of an explanation about what demand-side management is. There is a demand-side management program that happens in big-scale energy consumption and use, where, when the energy system's running out of energy, they ring up places like an aluminium smelter and say, 'Can you turn off that potline, which uses huge amounts of energy.' They turn it off for 55 minutes, so it doesn't solidify and blow up the whole potline and cost $20 million or $30 million, and then they'll turn the electricity off to another potline.
Producers just like this, adjacent to the border of my electorate, have been doing that out of the goodness of their heart to keep our under-resourced grid alive. There were many times in the last couple of years where if they didn't do that to reduce their demand, potentially, the whole grid would have gone off. Now, under the current rules, they're getting paid for that, whereas they used to do it before because they were concerned about the whole grid.
Part of the plan for demand-side management in the brave new world of AEMO's Integrated System Plan is that this will feature highly. All these smart meters that are now going to be put out across the grid will be able to find out what appliances are drawing what and which households are drawing what, and there will be wi-fi enabled inverters that will potentially turn off equipment that is drawing too much, like induction cooktops or your air conditioner. They may also, as part of the demand-side management, draw down on your Tesla's big battery, if it's plugged into the grid at the time. This is all part of the virtual big battery that is at the heart of a big chunk of where the electricity is going to come from in the brave new world in this transition. People should be very wary because, if Tomago Aluminium smelter is getting paid for this, I think individuals could be paid, which, then again, leads to increased costs and increased complexity.
On the face of it, this bill is a good idea. You've got to have modern standards for everything. We do want to have efficient machines. But if it's a cover that says, 'We've got to get a system in place so we can start managing people's own energy inside their house and turning things off when there's a shortage,' there will be people who will be mightily disappointed. That aside, I think it is good that Australia is pushing for energy efficiency because it's good economics. But I am concerned about what the same plan, with its demand-side participation scheme baked into it, which most people are oblivious to—except for big units, which people have for years already been told to turn off so the grid doesn't collapse—means for mums and dads who will have to lose their power if it has got to be drawn back into the grid. That would be a different response altogether. The best thing would be to have much greater generating capacity in our grid now. There are talks of drawdown and shortages during very hot weather. But, in the brave new plan where we're going to have most of our energy dependant on good weather and favourable winds, there are plenty of times when this demand-side participation will eventuate in order to keep the grid alive; otherwise we'll have total grid collapse. So you've got to understand that, in this new plan, your batteries in your car, if it's plugged in at the time, or your household batteries might be reversing the flow back into the grid.
With that in mind, we need to get back to this bill. As I said, it's a machinery bill. We do have to be supportive of efficiencies, but people need to take it as a pointer to what might be coming down the line to their homes soon if we do have shortages—when you have an East Coast slow; when the whole weather pattern across New South Wales, Victoria and Queensland is all rain. That's the fallacy of the idea that 'geographic distribution will reduce the risk of energy shortages'. The trouble is that the sun rises and sets within a couple of hours of each other, right up and down the eastern seaboard at the same time. So that means, every night, after dusk until well after dawn, all that excess energy that happens in the middle of the day is gone—lock, stock and barrel. Often when there's bad weather for solar generation, there's bad weather for wind generation. When these wind turbines work, they can only take and generate direct current when there's enough wind but not too much wind. They can't generate at all when there's no wind or low wind. And the weather has a horrible pattern of doing that over three or four months in Australia, when there are lots of low-wind events that go for 17-24 hours.
So we can have all the installed capacity of wind and solar, but, if we've got bad weather, their capacity factor drops to single figures or lower. There is not enough energy when you've got a weather-dependant generating system to both charge the batteries and operate the system, let alone keep one of the biggest, longest grids in the world intact. By all means, we've got to be efficient because we're going to have an energy shortage lots of times. So this is actually really important. But, in a perverse way, it would be much better to get some 24-hour, always spinning, always generating power stations back to being economic again, because at the moment they're falling over like tenpins because the business case for them has been eaten away by restrictive trade practices embedded in the National Electricity Market rules.
What's happening now in New South Wales, for instance? All of a sudden the light bulb's gone on, and they've realised that New South Wales could black out if Eraring, with 2½ thousand megawatts, is not available. Hey presto! How long did it take them to work that out? We are expecting miraculous amounts of energy to be storing the batteries, as well as running the system, being transmitted left, right and centre across the country, with wonderful, amazing, pop-up grids that take years to deliver and cost billions of dollars! But the plan is to let this massive power station close, like they did with Liddell.
Germany looked forward into the future and thought, 'We're going down the energy wind path and we will get rid of our power stations,' but they didn't blow them up. You can keep them, with care and maintenance. There is one old power plant amongst the 23 that has now fired up again, using brown coal, lignite and some black coal, from places like the Hunter Valley. It was built in the 1920s. They've kept it in reserve, through world wars, because they know cities, economies and nations run on energy, and, if you don't have energy, you don't have a modern industrial economy.
All those big cloud-computing data centres are huge users of energy. Around the world—I travelled to the UK and to America the year before, looking at things, meeting with Rolls-Royce, talking to think tanks in London—all these data centres are getting together. They're already planning their small modular reactors because they figure people have lost their senses and are overestimating the ability of renewables to keep grids and cities going through rain, frost, snow, tempests, storms, cyclones—you name it. They saw what happened when every solar panel in western Europe was covered with snow. Texas found out the hard way; they've had their blackouts. The New England network only survives out of the generosity of a nearby country—it's Canada—that has a bucketload of energy and lots of gas.
In California, they've had the same thing. All the technocrats, the IT billionaires and other people with electric cars are used to being told, 'There's this thing called demand-side participation, and we need you to not charge your Tesla, because we don't have enough energy.' They were going to close the Diablo Canyon Power Plant four or five years ago. All the people who were irrationally against nuclear, mainly for renewables, thought, 'Good riddance,' and it was planned that it would go. But Joe Biden turned up and gave them a grant to keep it open and also put another $4 billion or $5 billion around America to keep the nuclear plants going so they didn't have to have demand-side participation and have to tell people not to charge their Teslas. They decided to keep Diablo Canyon open. I think there are about 160 members in their state legislature, and I am reliably told by an energy professor that the vote was 157 to three. You know that woke centre of America, California? They voted 157 to three to keep Diablo Canyon going because they need it because they want energy that's available 365 days of the year.
Nuclear power is also good because you can get heat out of it that you can use to make hydrogen, that wonder thing that's going to be the cure-all. Nuclear power is great for energy storage—you know, that thing that we keep talking about? Well, instead of spending trillions of dollars on batteries every 10 or 15 years, you can have a couple of years of energy stored in one load of fuel in a nuclear plant. It's so dense and so thick. If you have a system with plenty of that, like France and like Ontario in Canada—they make a lot of money exporting electrons to the rest of Europe and to the rest of Canada, and they prop up the New England at other times.
The greenhouse and energy minimum standards amendment bill needs to come through because we're going to need every bit of help we can get. There will be energy shortages. The current federal government and, I would also add, the New South Wales, Queensland, Victorian and South Australian governments need to realise that we are going to have an energy shortage. We need to rethink our plan and allow the bans on nuclear to be removed.