Cathy McGowan (Indi, Independent) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) there is electorate wide support for renewable energy;

(b) in March 2017, the Australia Institute reported that in a national poll 67 per cent think that Australia is moving into renewable energy too slowly and 73 per cent supported setting a new renewable energy target for 2030;

(c) the Government has committed to ensuring that 23.5 per cent of Australia's electricity generation in 2020 will be from renewable sources;

(d) the transition to a renewable energy future will require high levels of social consensus and engagement;

(e) international best practice has demonstrated that community ownership has become a well established mechanism to build consensus and assist the transition to increased renewable energy sources;

(f) Australian households are amongst the highest adopters in the world of photovoltaics solar, driven primarily to help control their own energy costs;

(g) community owned renewable energy projects that allow communities to reduce their energy costs, or even make income from power production, would enable these benefits to be felt across the broader community, addressing the Government's energy policy priority of security, reliability and affordability;

(h) the absence of clarity in Government policy has led to many communities 'going it alone' to secure their energy future; and

(i) continued investment and innovation in the sector requires a clear message of support from the Government; and

(2) calls on the Government to:

(a) recognise that the community energy sector can play a significant role in the Government achieving its policy trifecta of secure, affordable and reliable energy; and

(b) demonstrate this recognition with a dedicated funding program for community energy projects to support the design and implementation and management of their own community specific integrated energy plans and projects.

In moving this motion, I call on the government to recognise the community energy sector and the role it can play in achieving the government's policy trifecta of secure, affordable and reliable energy, and to demonstrate this recognition with a dedicated funding program for community energy projects that support the design, implementation and management of community-specific energy plans and projects.

The community energy sector is in its infancy and faces significant regulatory and cultural barriers. However, its strong growth from two or three groups in 2010 to more than 60 groups today is a clear indication that the sector will play a significant role in the development of future energy policy. Australians, particularly in regional Australia, are saying loudly and clearly, 'We want to invest in renewable energy and we want to invest in our own communities.' This will mean jobs and this will mean that investment stays local and communities have ownership of their own power. Despite political uncertainty, the community energy sector has continued to grow. It's going from strength to strength. But, in order to play a more significant and solution-focused role in the national debate, the sector needs certainty. I am speaking on the sector's behalf today and I am calling on the government to provide the leadership, the policies and the investment to build this capacity for the future. Certainty in policy and program delivery is needed for this sector to continue to play its role in the debate and to be an active contributor to the government's agenda of secure, affordable and reliable energy.

This is not a call for a specific or second set of rules. It is a call to ensure that the rules that currently apply apply to all players and it is a call for sustainability over the electoral cycle. One example is ARENA funding. Currently, it is very difficult for community energy activity to get funding out of ARENA. We are asking ARENA to directly support local community activity. In September, I will be moving legislation that will put greater emphasis on support for community energy projects, particularly in the work of ARENA and the Clean Energy Finance Corporation. With this legislation, I will call on the government to establish dedicated funding programs for community energy projects that support the design, implementation and management of community-specific programs. For example, in my electorate we have an enormous amount of activity. The local government is leading the way. I would particularly like to acknowledge Indigo, Wodonga and Benalla councils, the Winton Wetlands, Renewable Albury Wodonga, Totally Renewable Yackandandah, the Benalla Sustainable Future Group, the Up2Us Landcare group in Mansfield, the Wangaratta Sustainability Network, the Murrindindi Climate Network, North East Water, and Wodonga Albury Toward Climate Health. They are a few of the groups actively working in this area. I would also like to acknowledge some of my constituents here today. Welcome. It's lovely to have you here. I know that you too are committed to renewable energy and are doing your bit to make it happen.

Today is about calling on the government to do their bit. As we do this bit, we're creating jobs, we're creating opportunities for people to come and live in the country and we're really growing our economy, but, most importantly, we are supporting our communities to be self-reliant and self-sufficient in their own energy use. The decisions made here in Canberra directly impact on regional communities and how we build resilience and how we create more vibrant and sustainable communities. The government have told us that they care about regional Australia. You've heard it regularly. Today I'm asking them to put their money and their leadership where their mouth is—to actually come out to the floor, support communities, support the wonderful initiatives that are taking place right across the country and make decisions that say: 'Not only do we care about renewable energy; we care about communities, we care about resilience and we see how communities can take their place when we're trying to resolve the problems that we, the government, are looking at when we talk about energy policy.' In our community we have seen what happens when government work closely with community. Particularly with this motion, I am asking that the government make a commitment to energy policy that is secure, affordable and reliable, and that the community energy sector has a central role in delivering that result.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

I thank the member. Is the motion seconded?

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

I cannot support this motion which I have no doubt is sincerely put by the member for Indi and reflects her belief in the need for reduced greenhouse gas emissions and for community engagement in the process. I have no doubt about that, and it is, of course, admirable. The climate is almost certainly changing, and we should do what we reasonably can to reduce emissions; however, the level of emphasis that has been placed on renewables in Australia and in other largely Western countries has been shown to be significantly and at times dangerously misplaced. Despite relentless campaigning to the contrary, often by the left media, renewables are no panacea, with the result of headlong rushes towards renewables typically delivering minimal environmental outcomes for sometimes catastrophic economic pain.

Not long ago, Australia had some of the cheapest power on the planet. We had that ranking because of our rich reserves of fossil fuels and because of the massive subsidisation of renewables in Europe, which had pushed their prices up and added considerably to a widening price gap in our favour. Now, after just a few years of a mad rush to mimic the European experiment with subsidised but unreliable renewables, we have caught up with Denmark, Germany and Spain and now we have some of the most expensive power in the world.

As the Prime Minister made clear to the member for Indi recently in question time when she made the same call as she makes in this motion for yet another form of subsidy for renewables, the big problem for this form of energy production is storage. Renewables are currently only intermittent sources of energy. They simply can't be relied upon. Windfarms generate around 30 per cent of the time, with no guarantee that the power they produce will be useful at the time when they are generated and, because it can't be effectively stored, it's often wasted. Solar generation is even less reliable and has the same storage problem. The situation for large hydro projects like Snowy 2.0 is certainly far better but viable locations are elusive. This means that renewables have to be backed by conventional fossil fuel-based generators if the lights are to stay on.

Another major, even pivotal, reason that Australia and, indeed, many of the countries that have invested heavily in renewables now face an energy crisis is the irrational, almost fanatical, thinking around renewables. The ideologues—and I'm not putting the member for Indi in this bucket—who seek emissions reductions at any cost have effectively, by their policies, created massive distortions in generating profiles. These distortions deepen the pre-existing intermittency problems of renewables, effectively magnifying a peripheral issue into a major systemic failure—a failure that directly threatens Australia's energy reliability and affordability and, with it, the future of our economy and standard of living.

Of further concern to me is that private sector investors aren't likely to build a coal-fired power station in Australia while the mad clamour for renewables continues, for they risk being left with a stranded asset long before banking a commensurate return on their investment. Gas, of course, is one potential answer. It is less emissions intensive than coal but, as the Prime Minister made clear in his response in question time to the member for Indi, it is now prohibitively expensive, thanks to decisions by former Labor governments that ensured world parity prices and a diminished domestic supply.

Australia does need a reliable, affordable and, as the member for Indi indicated, sustainable system of generating and distributing power to businesses and homes. That objective will not be achieved by further widening the subsidisation of renewables, at least not as technology now stands—not by a long shot. Secure affordable and reliable power can only come from a well-managed effective mix of baseload, intermediate and peak power generations, which, for the foreseeable future, if we continue to ignore the nuclear option, are going to be, substantially, fossil fuel— (Time expired)

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I was out meeting with some rather large manufacturers in Western Sydney recently, and we were talking about rising power prices and how many of them had gone to cogeneration some time ago; they had just moved away from the grid system altogether and gone independent. One of them said to me that they believed that the energy system was having a Kodak moment—that the way we did it and the way it could be done are now so different and the price differences so great that we're looking at a Kodak moment. They didn't mean a photo op; they meant a time of dramatic change.

We need a far more sophisticated debate about this than we're currently having, because we need a reliable grid and we need a guaranteed supply. Sticking your head in the sand and ignoring the tidal wave of new technologies and new options that are coming our way from across the world is foolish and risks the very grid that you're trying to protect. The world is in transition. We can follow—and we will, because the world will go that way—or we can let our businesses lead and become the owners of the technology and the patents that the world will use to make that transition. We need to do that and we need to do that now. Every month and every day we delay leaves us further behind.

The grid is looking at a perfect storm. It's ridiculously expensive now to connect to the grid. The wholesale price has doubled since this government was elected, and retail cost per unit is going up. That alone will bring other businesses into the field, because of supply and demand. At the same time, the cost of alternatives is going down, and that creates a perfect storm. The fix that we've seen so many retailers introduce, which is to increase the fixed element of the bill so that going solar on your home or your business provides less advantage, is a short-term fix. Ultimately, as the price of alternatives drops further, that will drive people off the grid. It won't protect the grid; it will drive people off it—and that is not good. It will mean, over time, that people who can afford to will go off the grid and those who can't will be left bearing the costs for the entire grid.

It is not a long-term solution, yet we can already see big developers deciding that their latest high-rise isn't going to connect to the grid, even in Western Sydney. Meriton is talking about taking whole high-rises off the grid. People in regional areas, where the cost of connection is very high, are going off the grid. Our own Prime Minister has battery storage and solar in his home. Manufacturers are openly talking about doing something else, forming their own power companies and literally walking away from the current system that we have.

Start-ups, including one accelerator in Sydney and quite a few companies in my electorate, are already trying to use technology to find ways around the way we currently do things. Random Hacks of Kindness at the University of Western Sydney has been working on BittWatt, which is a peer-to-peer power platform that will allow consumers in the suburbs to literally trade with each other. It's on its way. It is incredibly exciting. But it's also hugely problematic, because we need the grid and we need sustainable power. So we need a government that will enter into serious discussions about how we move from where we are now to where the world is going and how that disruption—and there will be disruption—will take place without disrupting the guarantee of supply. We need an incredibly sophisticated discussion.

There's another driver in all of this—that is, people want to move. The member for Indi's motion refers to the 67 per cent of people who think that we're moving to renewable energy too slowly and the 73 per cent who support setting a target. People want to go there. The price is coming down; the possibilities and the technologies are moving in. I want to mention two organisations in my electorate that are driving this change. ParraCAN, which has been around since 2007, has already got groups of customers together to get bulk deals on solar panels. There's no doubt they'll do the same with batteries. They've been meeting regularly and working to grow the renewable sector in Parramatta since 2007. They've now formed the Greater Western Sydney Energy Alliance, which works with business and consumers together to drive growth of renewables in Western Sydney. I would particularly like to congratulate Richard and Maria Maguire, who have worked so hard to put this process together. They meet regularly. They've got a major meeting coming up shortly. People like that and people right across our communities are driving this change. The government can go with it, or they can ignore it—but they ignore it at all of our peril.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I find myself in partial agreement with the member for Parramatta: we need to have a more sophisticated debate when it comes to renewable energy. We should start by being truthful about the actual cost to the Australian community of this transition. If renewable energy were this wonderful thing that was so much cheaper, we would not need any subsidies, we would not need the government coming in and having forced mandates and requiring compulsory things like the renewable energy target.

If we're going to have a sophisticated debate, let's start with how much the cost of subsidising renewable energy is adding to people's electricity bills at the moment. If we add up the cost of the feed-in tariffs for solar from the states and the cost of the large-scale renewable energy target, we come to a sum of $3 billion. That gets added directly to consumers' electricity bills to subsidise renewables. But that's only part of the additional cost; there are all the hidden subsidies that we don't see. There is the added cost to the network of hooking wind farms into the grid. This adds to the network costs and gets loaded into our electricity bills. This completely distorts the market and forces up the wholesale price, adding to consumers' bills.

If we're going to have a really sophisticated debate, we need to say what this cost is to our economy. What is the cost when we push the price of electricity higher and higher to subsidise renewables? How many jobs are being lost across the economy when businesses cannot afford to continue in Australia? What is the cost of our lack of competitiveness? What is the cost, when we have seen that South Australia now has the prize of the highest electricity prices in the world?

An opposition member: That's untrue. It's untrue.

How can South Australia manufacture anything competitively if they have the highest electricity prices in the world?

Opposition members interjecting—

We hear the members over there. They don't like to mention this fact. Do you know why, Madam Deputy Speaker? It is because their policy is to copy South Australia. You couldn't make this madness up. In South Australia we have seen the economic devastation that has been caused by pursuing these absurd renewable energy targets, and that is exactly what the Labor Party want to copy.

The other thing that we need to think about is the health effects on people who cannot afford their electricity bills. I know this is a controversial subject, but if we're going to have a sophisticated debate let's tell the truth about what's happening. We have excess winter mortality in this country. On an average winter day, you are 20 per cent more likely to die than you are on a summer day. It is cold weather that kills. Of that 20 per cent—those excess winter deaths—the World Health Organization estimates that 30 per cent are the result of people having inadequately heated homes. Because of the cost of subsidising renewables, we have seen more and more Australians having their electricity cut off.

An opposition member: No.

People in your electorate or in the member for Indi's electorate are having their electricity cut off. We have seen a doubling of the number of households having their electricity cut off over recent years simply because electricity prices have gone higher, and a substantial cause of that is this absurd nonsense of subsidising renewables when it's completely and utterly unnecessary. We hear about all these wonderful new technologies coming on stream, and that is fantastic, but why do we need to subsidise them? Why do we need to make it harder for the age pensioner or the hardworking family or the single mum to pay higher electricity prices just so they can subsidise renewables.

If we are going to have an honest or sophisticated debate, as the member for Parramatta talks about, we must start with the cost to our society. I respect the member for Indi; I understand she brings this motion to the House in good faith. But to bring it in here and talk about more subsidisation is completely and utterly the wrong direction to go in. Energy is the ultimate resource. It is what creates wealth. It is what transforms one substance to another. It affects households. It affects jobs. If we're going to have this debate, at least let's be honest about what the true cost of renewable energy is and the harm that it's doing to our business and our society.

Mike Kelly (Eden-Monaro, Australian Labor Party) Share this | Link to this | Hansard source

I'm very pleased to speak in support of the motion by my valued neighbour in the electorate of Indi. We share rural and regional interests, and one of the things I would recommend that the member do is actually read the Farmer Climate Survey, which indicated that 90 per cent of farmers are concerned about climate change, and for good reason. They're the ones who are going to bear the cost of inaction and the results of the devastation of climate change. In that survey, 88 per cent of those farmers wanted their representatives to do more on this issue, and 80 per cent wanted to move to 100 per cent renewable energy. Of course, we've seen the NSW Young Nationals urge the government to take on board a mechanism to generate the investment needed in this area, and the National Farmers' Federation has also called on the government to move forward on this.

I would urge the member, in the context of what he had to say, to read his own Finkel report. I have read all 212 pages of that report, and it really bells the cat on what the government's had to say on this issue. One quote where it highlights the key deficiency, from four years of drift and a lack of policy, is at page 88. It says:

… a mechanism is required to guide investment in the electricity sector that is compatible with Australia’s international emissions reduction commitments. The existing policies aimed at reducing emissions in the electricity sector are not consistent with Australia’s 2030 emissions reduction goals.

It also says:

The lack of a clear means by which the electricity sector is expected to contribute to this task is hampering investment in the NEM—

the National Electricity market. It went on to say:

The Panel emphasises the urgency of the need for a credible and enduring emissions reduction policy for the electricity sector to provide investor confidence

They couldn't be clearer about what the problem here is. We have seen an 88 per cent drop-off in investment under this government, and that is the issue—generation capacity that could have been there that isn't, because of this government.

Now, we heard talk about prices. The Finkel report said, at page 90, that prices would be higher under a business as usual scenario and, in coal-fired NSW, we have seen a doubling of the price and now another 20 per cent increase since July. The Finkel report said:

The modelling undertaken for this Review found that the CET and EIS policy scenarios both resulted in lower residential and industrial electricity prices than leaving policy settings unchanged under a business as usual (BAU) scenario.

So, they have really belled the cat on that one. They also said:

… consultation with stakeholders suggests that, currently, the uncertainty around emissions reduction policy is having an impact on investment decisions and financing costs for generators.

And that point was hammered home to the Prime Minister in the recent discussions he had with the electricity market companies.

We have heard comments about health—bizarre comments about renewable energy causing deaths of patrons. Look, if they were that concerned about the impact of electricity prices, then why are they trying to get rid of the electricity energy supplement? Around 400,000 pensioners and 138,000 single parents will be affected by that decision. If they are worried about that, they should address that issue. If they are worried about health issues, I have seen plenty of health surveys, some of which have suggested that fossil fuels cause about $6 billion worth of cost to our health bill in this nation and probably kill around 3,000 Australians a year. That is what some of those reports have suggested. So if we are worried about health, then we need to get off fossil fuels as soon as possible.

The biggest single issue that is highlighted in the Finkel report—and there are so many things I could go through, like the opportunities for rural communities, moving to distributed energy resources and the opportunities for saving on power bills—is the urgent need to make a decision on the clean energy target. It set out a time line for implementation of its recommendations, and included, at zero months, an urgent decision on the clean energy target. But what are we seeing from this government? More drift and more inaction. It is what I chose the year are This is what's holding back our ability to create the economic engine that will drive this country forward, particularly, in investment in rural and regional areas. In my own electorate of Eden-Monaro, we saw over a billion dollars come into our region during the previous government's policies. That all dried up. What we need is a decision on the CET now. We need community power networks, we need investment in rural and regional areas, and we need this government to get off its backside and get something done.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I'm very pleased to speak on the motion today. I think that renewables are all but certain to become the major supplier of electricity in Australia over the next two or three decades. It's just a matter of when and at what cost. It was interesting—I actually referred to the motion from the member where it quotes the Australia Institute's survey that said that 67 per cent of Australia is moving to renewable energy too slowly and that 73 per cent report the new renewable energy target for 2030.

I have spent a considerable amount of my time studying energy in Australia, particularly in South Australia, over the past five years or so. It is one of the most complex subjects you could possibly hope to cover. And I'm always wary of surveys like that because, of course, the people that are asked to make an answer are not in possession of many of those facts. Just how we transition, I think, is the big question for Australia.

South Australia is the perfect example of how we—and I say 'we' in a collective manner, being the state of South Australia—got it wrong. The consequences of getting it wrong are costing us jobs and investment on a daily basis. I've seen that effect in my electorate. Businesses that were planning to invest have delisted that investment, and others, in fact, have closed up and gone.

The South Australian government vigorously pursued the renewable energy target, which was originally set at 20 per cent by 2020. It became obvious that because of the mechanism used to set the target was a fixed number—which was no more than an estimate on the day—we were actually heading for around 28 per cent of our electricity market being renewable. After a long negotiation, the parliament finally, eventually, settled on a figure of around 23. The perfect example of how we got it wrong in South Australia was the 'when'. We—and I say 'we' being the state government—vigorously pursued the renewable energy target. As a result, we got close to 50 per cent of our energy now coming from renewable sources. On the face of it, that's a good thing. But what it did—because we got there prematurely and because the South Australian government chose to allow the Alinta Northern Power Station to shut 15 years early—was drive the economic case for baseload generation to the point of closure. That meant a virtual doubling of South Australia's wholesale electricity prices overnight. This has wreaked havoc through the state, it must be said.

Both levels of government—the federal and state levels—are desperately trying to do something about this in the remedial sense at the moment. The state is doing so, of course, with a very expensive battery. Once again, the devil lies in the detail. The possession of knowledge is very powerful. The Elon Musk battery will provide electricity for South Australia on a hot day for about 2.5 minutes at a cost of between $50 million and $100 million. If you were to extrapolate that across the electricity system, you would see that, at this stage, is not an economical way to provide backup. It may well come into its own in the near future—let's hope it does. But, at this stage, it is too expensive to entertain on a broad scale.

I have for some time been saying that South Australia should not authorise any new renewable intermittent power sources unless they have storage. The storage is the most important factor for South Australia now. That is for South Australia because we are so far in advance of the rest of Australia in this matter.

The federal government, for its effort, is investing in a pumped-hydro project in my electorate on the Cultana defence range at Port Augusta. We are doing a feasibility study on a pumped-hydro project with EnergyAustralia. I anticipate that this will come about. There are another two companies in the area, without government assistance, looking at the same thing—if you like, retrofitting storage to the system that has an over-preponderance of wind at this stage because it's become uneconomical. To the member that proposed this motion: we're also investing $110 million—through ARENA, interestingly—to build a solar thermal-concentrated power station with storage. And that is the most important thing: with storage. (Time expired)

Pat Conroy (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased to make a contribution to the member for Indi's excellent motion. I want to pick up a few of the myths peddled by the other side in this debate. To the member for Grey's contribution, every single wind farm built in South Australia was driven by a federal bipartisan policy of the renewable energy target. The federal government's policy—a bipartisan target—delivered almost 50 per cent renewable energy to South Australia in that period. I absolutely agree that more planning is needed, and that was at the heart of the Finkel review. But it would be a complete misnomer and a great disservice to the Australian public to blame the South Australian government for the actions of a federal policy mechanism supported by both sides of politics.

I'm also interested in the member for Grey applauding the investment in pumped hydro by the Australian Renewable Energy Agency, an agency this government has tried to abolish twice. It demonstrates the grave hypocrisy of the Liberal-National government. As for the ridiculous contribution from the member for Hughes, who is a serial offender in this context, the government's own stacked inquiry in 2014—the Warburton review, stacked with climate change deniers—found that the renewable energy target actually reduces prices. Let me repeat that: the pressure the renewable energy target exerts to suppress the wholesale energy price is much greater than the cost of the renewable energy certificates. The 23½ per cent RET reduces electricity prices, nothing else.

We are facing an investment strike in this country because of four years of policy paralysis by this government, a government riven by divisions, denial of climate change and denial of basic economic competency. That means the wholesale energy prices across the whole nation have doubled, and there is one way through it: a bipartisan commitment to a clean energy target that will reduce electricity prices by $175 per annum, compared to the business-as-usual case. When those on the other side talk about reducing electricity prices, if they're fair dinkum about it, they need to support a clean energy target and let industry get on with doing what they need to do—invest in new generation—because our power fleet is very old.

Returning to the substance of this excellent motion, it's all about empowering local communities to be masters of their own destiny with regard to energy generation and to make a contribution to fighting climate change, on the one hand, but also to have a level of independence and—quite frankly—to have some security against increasing electricity prices. Whenever I travel around the country as the shadow assistant minister for climate change and energy, I see communities passionate about embracing community renewable energy, something tried and proven overseas. Whether it's in California or Germany, countries and communities are embracing a community ownership of renewable energy—a community-led investment boom.

That's why I was so proud that, at the last election, Labor took a very strong policy to the people on community ownership. We allocated $98 million to a community power network that included funding for 10 community power hubs. We also put aside grants funding for projects such as solar gardens for renters; low-income energy efficiency investment; solar programs using innovative finance like council rates; community wind farms; piloting community solar projects with social housing providers; and rates financing of renewable energy for low-income pensioners. These were all concrete projects that would empower local communities—whether it's the member for Indi's community in regional Victoria, mine in regional New South Wales or the member for Lindsay's in Western Sydney—to invest in renewable energy, to make a contribution to fighting climate change and to make a contribution to reducing electricity prices for local communities, which is so important. That's why this motion is so important. That's why Labor is standing shoulder to shoulder in embracing community renewable energy.

If those on the other side use this as an excuse to attack renewable energy, they'll be doing a great disservice, because the facts are these. The renewable energy target reduces electricity prices, and the best way to reduce future prices is by embracing a clean energy target to stop the investment strike in the wholesale energy market. If those on the other side are serious about reducing electricity prices, they need to endorse a clean energy target right now.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

The time alloted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.