Tom Venning (Grey, Liberal Party) Share this | Hansard source

I rise to speak on this motion. While I acknowledge the intent behind the government's Battery Breakthrough initiative, I cannot support the suggestion that this policy will deliver the energy security and affordability that Australians so desperately need.

I am an engineer, an economist and a farmer, and I'm going to limit this address to facts and figures and to common sense, not to ideology. We must be honest with the Australian people. Batteries are not a replacement for baseload power. They are useful for short bursts of firming capacity when a cloud comes over the state and there is no solar, for gas peaking plants to spool up so that gas can run the grid. Batteries cannot drive heavy industry, nor can they replace the consistent, reliable power that our nation depends on. Yet the government continues to suggest that this initiative will reduce power prices. That is misleading.

Around the world there is no evidence that battery rollouts of this scale have reduced power prices for households or for industry. Australians also need to understand that energy demand from industry is four times greater than household demand. I repeat that: energy demand from industry is four times that of household demand. So, while a battery in your home may trim your power bill, it does nothing for the manufacturer down the road and even less for heavy industry. In my electorate of Grey, industries like the Whyalla steelworks and Port Pirie smelter are the backbone of our economy. These facilities require vast, reliable and around-the-clock energy. A few batteries scattered around the grid will not make steelmaking more viable in Whyalla. They will not make lead smelting in Port Pirie more competitive.

Large-scale energy storage is possible through pumped hydro, but Australia is one of the flattest continents on earth. We do not have the geography or indeed the water to rely on hydro in the way that other nations do. So South Australia, already 80 per cent renewable, has been forced to build generation capacity nearly five times greater than our average consumption. I repeat that: in my home state of South Australia we have generation capacity nearly five times average consumption. The result? South Australia has the highest power prices in Australia and, depending on how you measure it, the highest power prices in the world. This is not theoretical.

Right now in Whyalla there are seven serious domestic and international buyers considering investing $5 billion to $8 billion in the steelworks. They know the Commonwealth has put a $1.9 billion carrot on the table to support that transformation. But do you know what their single biggest concern is? Access to reliable and affordable energy. Whyalla is the best place in the world to be making steel. Just down the road we have a 100-year-long magnetite asset, we have road facilities, port facilities and rail facilities and we have an existing workforce that knows how to make steel. Today in South Australia the wholesale power price can go from minus $200 when we are overgenerating renewables to $2,000 when the wind isn't blowing and the sun isn't shining. At those times, running the steelworks can cost $34,000 an hour in losses. This is not a pathway to investment certainty; it is a pathway to closure, and batteries will not change that fact.

Energy is a global marketplace. Our high power prices mean that we are losing opportunities that we should be winning, not just in heavy industry but in emerging sectors like artificial intelligence and advanced computing. Global companies are voting with their feet and investing elsewhere because energy in Australia is simply too expensive. When there is no wind or solar power, we import coal from Victoria. This problem will only worsen as Victoria's coal fired generation closes. South Australia, in particular, faces a stark future. Additionally, South Australia is the driest state on the driest continent. We will rely increasingly less on water from the Murray River and therefore increasingly more on desalinated water. But desalination plants, too, cannot run on intermittent power. They require baseload energy—continuous affordable and reliable. Without it we risk not only our industries but our very capacity to secure water for our regions.

The government's motion talks about sovereign capability, but true sovereignty in energy means building a system that can support both households and industry, that can attract local industry rather than repel it and that can provide water security to the communities that need it most.

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