House debates

Monday, 30 November 2020



7:44 pm

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

We all want to make Australia make again. We want manufacturing back. One thing that COVID has identified is that we as a nation are vulnerable because we've lost our industrial base and our manufacturing sector is a shadow of its former self. We have developed smarter, niche manufacturing, but that doesn't keep an economy going when you're isolated in a crisis, such as what's happened in COVID. Why did so much of our manufacturing go overseas? Why did our manufacturing job numbers in 1990 amount to 1.17 million as opposed to 855,000 in 2020? The answer has a lot to do with the cost of electricity. We have a high-wage economy in Australia, which everyone loves. It gives us a good standard of living. But we have given away our competitive advantage in reliable, cheap electricity, which was some of the cheapest in the world and is now the most expensive.

For manufacturing—whether it's processing raw materials, metals, food or fibres into semiprocessed goods or extensively processed goods—you need bundles of energy. Manufacturing without cheap electricity is like an irrigation farm without cheap water. If you have expensive water, you can't afford to make money out of growing crops. It is the same with manufacturing: you can't make money unless your electricity cost, which is usually your greatest cost, is reasonable.

Why have our costs for electricity gone up? Because of many reasons. We have destroyed our competitive advantage. In the rush to a decarbonised economy, we have put regulations in the energy markets favouring renewables. We've had regulatory subsidies in the form of the Renewable Energy Target, which has generated the existence of renewable energy certificates. We have, as we know, gold plated some of the poles and wires. With some of the state regulations, there's a guaranteed return on gold plating and putting in expensive grid infrastructure. But the main reason we have expensive electricity is that the so-called cheap renewably generated electricity is only available between 20 and 30 per cent of the time, and that is destroying the efficiency of the baseload system.

We have in New South Wales some of the best coal in the world in terms of energy density. The only thing that's better than it is uranium, which is very energy dense, but using that for electricity in Australia is banned. So we rely on coal. But our power stations are very old. In New South Wales, they are all subcritical power stations—1970s and even 1960s technology that are using up their designed lifespans. There are some ultrasupercritical ones in Queensland, and many countries in Asia are switching to using our black energy-dense coal to produce cheap electricity.

Our black coal in the Hunter Valley, which I visited on the weekend, compared to Indonesian coal produces 30 per cent less CO2. Compared to Indian coal, it's 70 per cent less. That's an amazing difference. By India burning our black coal, they're reducing their carbon footprint by 70 per cent. By Indonesia burning our black coal, they're reducing their footprint by 30 per cent. We're exporting our greatest competitive advantage. It's our biggest earner at the moment along with iron ore. What I'm saying is that we could get both outcomes. We could get the environmental outcome we're all seeking if we utilised our black energy-dense coal in ultrasupercritical, highly efficient, low-emissions power stations, which need to be built for us to meet our targets. If we did that and we built them in Victoria, you'd get a 43 per cent reduction, because they use brown coal, which is a lot moister and has a lot more CO2 and things like that in it. But if we built a modern power station, we'd get a 43 per cent reduction. If you use carbon capture and storage, you could reduce it by 90 per cent, but we would be getting cheap energy around the clock.

On the weekend, we had a heatwave. In New South Wales, 80 per cent of the energy during that heatwave came from four old power stations. If we don't replace them, the lights will go out. It's also the case that in the morning and in the night, the lights won't go on. (Time expired)