Colin Boyce (Flynn, Liberal National Party) Share this | Hansard source

Don't you just love it when the whip's office rings you up as says, ' Can you do an adjournment speech and gives you five minutes notice'? Anyway, it's called running the political ball up, and I'm quite prepared to do that. The subject I'm thinking about, that I'd like to make some comment on, is the recent announcements in respect of Tomago Aluminium smelter at Newcastle and how that might affect the alumina sector in Gladstone.

As you know, I represent the Flynn electorate in Central Queensland, which is Gladstone and the wider Central Queensland area. Gladstone is obviously the big port there—the largest multicommodity shipping port in Australia. We have the CSG industry at Curtis Island, the two alumina refineries and the aluminium smelter, Rio Tinto. We have the Gladstone NRG power station, two other coal fired power stations and the largest cement kiln in Australia, Cement Australia. These announcements recently in respect of the closure of Tomago—that will also wash through and possibly affect the goings on of the alumina sector in Gladstone.

Rio Tinto, as you know, has recently flagged the possible closure of NRG Gladstone Power Station. Under the AEMO guidelines, they have to flag this 3½ years out from the possible closure. The big question is: what does that mean for all of this heavy industry that goes on in Central Queensland? We know AGL has got a 42 per cent stake in that power station. They have had that advertised for sale for some time. We also know that they wrote off their assets to the tune of $1.4 billion couple of years ago. That all points to the question: how will the aluminium sector, and particularly the smelter in Gladstone, survive given the fact they have now flagged the closure of Tomago in New South Wales?

This all revolves around the whole renewable energy argument, the whole net zero argument and the cost of energy. It is the cost of energy that is the principal driver behind the closure of these huge industrial precincts and the loss of thousands of jobs, particularly in Newcastle with the forecast closure of Tomago. I ask the question: is the same thing going to happen in Queensland at Gladstone with the alumina sector and all of the other heavy industries that rely on reliable energy and affordable energy?

One of the problems with all of this is the whole push to renewable energy. In the Flynn electorate, I'm dealing with 96 renewable energy projects of various kinds. They are in various stages of getting their approvals and so forth. The biggest problem they have is that many of the projects do not have financial closure. The reason that they don't have financial closure is that the proponents cannot guarantee these investors a minimum return for their investment. Many of the proponents I've spoken to are looking at a 10 to 15 per cent minimum net return on their investment. For example, if it is a billion-dollar project and they're looking for 10 per cent return—$100 million a year. The proponents are busily trying to get the investors to sign up and commit the money, but the investors won't do that because they're not guaranteed that return. That is why the government has invented the Capacity Investment Scheme, where the Australian taxpayer will be asked to underwrite a minimum profitability for these projects. The problem I have is that we don't know what that will cost. If you go to the forward estimates in the budget, it's restricted information. I think Australians deserve to know exactly what they're signing up for in respect of the Capacity Investment Scheme.

The other issue is that many of these renewable energy projects, if and when they are built, are predicated on offtake agreements. The offtake agreements involve the big energy users, particularly places like Rio Tinto's smelter in Gladstone. With the closure or possible flag closure of Gladstone Power Station, how can the renewable energy sector, and the AEMO for that matter, guarantee a reliable source of energy for that smelter? There are thousands of jobs at stake here, and we need someone to answer these questions and guarantee their jobs.

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