House debates

Tuesday, 27 October 2020

Regulations and Determinations

Industry Research and Development (Bankable Feasibility Study on High-Efficiency Low-Emissions Coal Plant in Collinsville Program) Instrument 2020; Disallowance

12:42 pm

Photo of Mark ButlerMark Butler (Hindmarsh, Australian Labor Party, Shadow Minister for Climate Change and Energy) Share this | | Hansard source

I thank the Minister for Veterans' Affairs for moving the suspension that would allow this motion to come on before the House. I move:

That the Industry Research and Development (Bankable Feasibility Study on High-Efficiency Low-Emissions Coal Plant in Collinsville Program) Instrument 2020 made under the Industry Research and Development Act 1986 on 18 June 2020 and presented to the House on 24 August 2020, be disallowed.

This instrument bears all the usual hallmarks of the energy minister's scandal ridden, ham-fisted handiwork. This is a rorted process to hand over taxpayer money to back a project that is entirely without merit. To call the grant a 'bankable feasibility study' particularly shows a sense of irony, perhaps even a sense of humour, on the part of whoever drafted it. What we all know, and what those on the other side will admit in their moments of honesty, is that no bank would touch this project with a barge pole. They won't touch it with a barge pole, which is why we are going through this farce of taxpayer funding for a feasibility study into a project that will never go ahead.

This project—let's be clear—was a cynical, transparent election ploy to sell false hope to the people of Queensland at the last election that there would be new jobs and that there would be cheaper power delivered by a new coal-fired power station at Collinsville. It will never happen, and it's a cynical election ploy that is going to be funded by yet more borrowed taxpayer money.

I'll return to the question of merit in this grant, but first I want to deal with the process that got us here. This grant was originally designed, as I said, as a cynical election ploy in Queensland at the last election. Unsurprisingly, given its complete lack of merit as a project, it fell into a very deep hole after the May election last year—a hole that I imagine the Prime Minister hoped would be permanent. But, in a very widely reported screaming match between the Prime Minister and the then resources minister, Senator Canavan, it was resurrected. It was resurrected in the Prime Minister's Office after a screaming match that was widely reported and apparently overheard by a number of the Prime Minister's colleagues and the Prime Minister's staff. To apparently keep Senator Canavan and his fellow travellers happy, an announcement was then rushed out by the minister for energy. It was rushed out so fast it happened before the project proponent, Shine Energy, had even submitted an application for funding for a feasibility study. They'd submitted no application for a feasibility study and no application for a business case. Indeed, it's been widely reported that the government had to ask the company to submit something two days after they'd already announced that money would be handed to the company. Unsurprisingly, having been told through the media that they would receive several million dollars to conduct their own feasibility study into their own project—lo and behold!—Shine Energy did finally submit an application. Even for this minister, this rorted process is beyond the pale.

An announcement of borrowed taxpayer funds for a company that had not even submitted an application and that were then invited to submit an application to conduct their own feasibility study into their own project is something that I have caused to be reported to the Auditor-General. I've written to the Auditor-General to conduct an inquiry into this process. Frankly unsurprisingly, the Auditor-General has agreed to conduct an inquiry into this. To add insult to injury, notwithstanding the fact that there has been a motion before this House now for several weeks and notwithstanding the fact that this has been referred to the Auditor-General, it's been reported through Senate estimates that the government has already handed several hundred thousand dollars of cash to this company, Shine Energy.

Not only is this a rorted process; this is a project entirely without merit. You don't need a feasibility study to convince you of that; you just need a rudimentary understanding of what's happening in the energy sector generally and particularly in the energy sector in Queensland. The department told Senate estimates that they have the first phase of a study that no-one has yet seen and apparently no-one is allowed to see that says that Central Queensland needs a 1,000-megawatt coal-fired power station for system security. That is complete rubbish, as any energy expert would advise. There was an existing coal plant operating in Collinsville that closed down in 2012 because of a lack of demand. Indeed, it's been very widely reported by all analysts that the only way in which some unmet demand might emerge in Central Queensland for a project like this to fill would be the early closure of the power plant already operating at Gladstone, and that's been openly acknowledged and widely reported through the media as being Shine Energy's strategy. Their understanding is that the only way you can create unmet demand in Central Queensland for a project like this to fill is to shut Gladstone power plant early. Although Shine Energy have said this widely through the media, I suspect that those opposite, including the minister for energy, have not gone up to Gladstone and told the existing coal-fired power station workers up there that this project is essentially predicated on the loss of their jobs earlier than was going to happen.

The project boosters will also promise that this is going to deliver cheaper power prices. You only need to read the words of the Prime Minister to know what a high-efficiency, low-emission coal-fired power station means for power prices. The Prime Minister said in 2017:

… let's not think that there's cheap new coal, there's not.

…   …   …

… new cheap coal is a bit of a myth.

The Prime Minister said that back in 2017.

There are different estimates about what the cost of a HELE power station would be in Australia given we don't currently have one, but it would be substantially north of existing wholesale power prices in Queensland, which in the 2019-20 financial year ran at less than $60 per megawatt hour. Alan Finkel, the Chief Scientist, said in a report that a HELE power station would deliver wholesale power prices well in excess of $80 per megawatt hour. The Queensland government's assessment was that it would be north of $100 a megawatt hour. In the last three months, Queensland's wholesale power prices have been running at less than $40 a megawatt hour. So let's not pretend there is any serious argument that this power station fantasy is going to deliver anything more than expensive power prices in Queensland, vastly more expensive than the world-leading solar power that is available in Queensland, particularly in that part of Queensland, including with firming added.

Also, let's not pretend that this is low emissions. It's a wonderful marketing slogan for this Prime Minister. We know, again, that this is rubbish. The International Energy Agency defines HELE power stations as power stations operating at somewhere between 740 and 800 kilograms of carbon dioxide per megawatt hour, which is already in excess of the system-wide average emissions intensity of the National Electricity Market, an emissions intensity that is dropping all the time because of the expansion of renewable energy. So let's not pretend this is going to do anything for emissions in the system.

I would say the economics of this project are hopeless, which is why this company has had to come to the government to get taxpayer funding for what would otherwise be a private investment. Even the company realise this, because they've admitted they have no hope of getting this power station up without also receiving a taxpayer indemnity against any risk of any policy in the future that might impact that asset, an asset that would be expected to have a life of 30, 40 or even 50 years, an indemnity that the Australian Industry Group has calculated as being as much as $17 billion just for one power station. This is not only an indemnity sought by the company; it is an indemnity that has been backed in by the local member, the member for Capricornia, who is happy to spend $17 billion in taxpayer dollars, and backed in by Senator Canavan for a project that otherwise is not going to be bankable. But, again, I'm not sure that they've gone to the Gladstone Power Station or any other power station in the country and said, 'We're going to give a taxpayer indemnity to this power station, but we're not going to—

Mr Chester interjecting

Well, I've got five power stations in my electorate—I will say that to the minister—all within about two kilometres of my office. But I bet they've not gone to any other power station and said, 'We're going to give this power station a taxpayer funded indemnity and protect them against future policy change, but we're not going to give it to anyone else. We're not going to give job security to any other of the thousands of power station workers that operate around the National Electricity Market. It is just for this favoured project to please the Queensland federal Nats.'

Remarkably, the Prime Minister, in February this year, wasn't even able to rule out this act of economic vandalism and clear preference given to one power station over every other power asset in the National Electricity Market. Let's be clear: this is a plaything for the Queensland National Party, and only for the Queensland federal National Party. A few months ago, the Gladstone Observer reported that the LNP state party was focused on renewable energy instead of this project. That article was titled, 'LNP divided on funding coal-fired power station construction'. At least the LNP state party knows that is this is a fantasy that will never deliver jobs or cheaper power prices to the people of Queensland and simply wastes millions of dollars. It's not only the federal LNP that is divided from the state LNP on this question; the coalition party room here in Canberra is also deeply divided on this point.

I'll go to some quotes from members opposite. They are not currently in this chamber; I suspect they might duck this debate. The member for North Sydney, Trent Zimmerman, was asked what he thought of this feasibility study being funded by taxpayers. TheGuardian Australia reports:

… Trent Zimmerman told Guardian Australia his view was the government should not be investing in coal-fired power stations.

I note the minister laughs when I read out quotes from the member for North Sydney. The Guardian Australia states:

Zimmerman said any "fair" feasibility study would demonstrate there were better alternatives than a new coal plant in north Queensland.

His view was echoed, apparently, by the member for Wentworth. The member for Wentworth is quoted as saying:

The Collinsville feasibility study into a high-efficiency low-emissions plant was an election commitment and we should honour it.

But my own view is that new coal-fired power generation, even of the HELE variety, does not stack up economically or environmentally.

The article in The Guardian Australia states that the member for Mackellar, another of the minister's colleagues in the coalition party room, said the feasibility study should proceed:

… because it was an election commitment, but it will not lead to a new coal-fired power station being built because there are more economically efficient and environmentally cleaner options for power generation in Australia.

Members of the coalition party room are belling the cat that this is simply a gross expenditure of taxpayer funds to satisfy Senator Canavan and a couple of other members of the coalition party room, when other members of the coalition party room recognise the realities of economics in the energy system; recognise what is happening in technology, including in Queensland; and know that they might spend several million dollars on this, but it's not actually going to change anything on the ground.

We will simply not support this waste of taxpayer funds. At a time when this government has racked up a trillion dollars of Liberal Party debt, the idea that taxpayers have to borrow yet more money to fund this fantasy, this cynical election ploy, for a few members of the Queensland LNP is not something we are going to support. We're not going to support false hope continuing to be sold to the people of Central Queensland that some new coal-fired power station is going to deliver jobs and cheaper power prices when every serious piece of analysis, some of which has been read and noted by members opposite who won't come in for this debate. But it has been read and, at least, bravely they're talking about that publicly. This is a rort. This is a project without merit and it won't be supported by this side of the House.

Photo of David GillespieDavid Gillespie (Lyne, National Party) Share this | | Hansard source

Is the motion seconded?

Photo of Pat ConroyPat Conroy (Shortland, Australian Labor Party, Shadow Minister for International Development and the Pacific) Share this | | Hansard source

I second the motion and I intend to make a contribution.

Photo of David GillespieDavid Gillespie (Lyne, National Party) Share this | | Hansard source

I appreciate your eagerness, but the minister has the call on rotation.

12:56 pm

Photo of Darren ChesterDarren Chester (Gippsland, National Party, Deputy Leader of the House) Share this | | Hansard source

I second the motion and I move:

That the question be now put.

A division having been called, the bells having been rung and the doors having been locked—

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The Manager of Opposition business has indicated he wishes to raise a point of order. Members! Could the back row of interjectors give us a bit of quiet so I can hear the Manager of Opposition Business. He is trying to take a point of order.

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Shadow Minister for the Arts) Share this | | Hansard source

My understanding of what happened, which led to this division, is that the minister at the table stood up and, when it was asked, 'Is the motion seconded?' said that he seconded it and then immediately moved that the question be put. If that's what happened, it means the question was never stated by the chair, in which case right now we are voting that the question be put when there is in fact no question before the House.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The Manager of Opposition Business might have noticed I was having some discussions. That is my understanding of what has happened, and I think it is clear-cut: the motion that the question be put can't be put until that question is before the House. So what I would suggest now is that the count not proceed, I state the question, and then, obviously, that motion can be put any time after I've stated the question. Are members happy with that course of action? I mean that's—

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Shadow Minister for the Arts) Share this | | Hansard source

A point of order: I presume, Mr Speaker, that means once you state the question the matter is open for debate and other speakers who sought to debate can seek the call?

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

Well, they can try; that's true.

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Shadow Minister for the Arts) Share this | | Hansard source

I'm working on the novel concept that we might have a debate on this.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

That's alright; I'm just working on precedent over the last few weeks! I'll just say to the tellers: we will not proceed with the division. There being no objection to that from the House, the doors can be opened. The motion has been seconded. I need to now state the question that is before the chair, and that is that the motion moved by the member for Hindmarsh be disagreed to. I call the minister.

1:03 pm

Photo of Darren ChesterDarren Chester (Gippsland, National Party, Deputy Leader of the House) Share this | | Hansard source

Thank you, Mr Speaker. I move:

That the question be now put.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The question is that the question be now put.

1:09 pm

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The question now is that the motion moved by the member for Hindmarsh be disagreed to. There being more than one voice calling for a division, in accordance with standing order 133 the division is deferred until after the discussion on the matter of public importance.

Debate adjourned.