Tuesday, 16 February 2021
Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020; Second Reading
I wish to make a final point in respect of this bill on financial integrity. The Clean Energy Finance Corporation's investment mandate is to engage in investments that generate a positive return to the government, and that's common sense. You would expect that if taxpayers' dollars are being invested in private projects that there would reasonably be a return to the taxpayer for that investment. But this government want to change that investment mandate such that the government and the Clean Energy Finance Corporation could invest in projects that do not generate positive returns to the government. How stupid would it be for the government to actively put dollars into a project that it knows is going to fail? But those opposite want us to amend this bill exactly so that can happen.
What sorts of projects would they be that the Clean Energy Finance Corporation would have its investment mandate changed to invest in?
Let me guess. Could it be a coal-fired power station? The private sector is certainly not going to invest in a coal-fired power station. They know that that's nuts, that that is crazy. But those opposite expect this parliament to agree to amending the Clean Energy Finance Corporation's investment mandate so that taxpayers' dollars, Australian workers' hard-earned money, can be thrown up against a wall in an investment in a coal-fired power station. Why? To placate the six or seven nut jobs on that side of the parliament who don't believe in climate change. That is why this government is asking this parliament to do that.
And get this: they want to use taxpayers' funds, Australian workers' hard-earned money, to invest in projects that they know will not generate a positive return to the government, that will potentially increase carbon emissions in Australia, and that they know will lose money—and they have the hide to say they're better at managing government finances. Can you believe it? It is unbelievable. But that is exactly what this government expects this parliament to agree to through this change to the Grid Reliability Fund. And they say they are better at managing money. What a joke!
This government has done immeasurable damage to Australia's reputation when it comes to taking stronger action on climate change—not to mention the higher electricity prices that have resulted from their inaction on climate change; the investments that have gone overseas because there is no certainty here in Australia for businesses to invest in clean energy projects because of this government's lack of a road map; the jobs that have been lost in new technologies, in research and development and in renewable energy projects because of this government's scepticism about climate change; and, worse still, the increases in emissions that have occurred in Australia because that mob got rid of an emissions trading scheme and tried to get rid of commonsense objectives like the Clean Energy Finance Corporation. It paints a very bleak future for our children. Unless the government agrees with the sensible amendment that has been moved by the member for McMahon, we will vote this bill down because it is not in Australia's interest for the Clean Energy Finance Corporation to be investing in projects that increase carbon emissions in this economy and don't return anything to the Australian taxpayer. I urge members of this parliament to vote that amendment up or vote this bill down if the amendment is not successful.
I would say to those opposite, to the member for Kingsford Smith and to the Australian public that this government is taking action on climate change and continues to meet and beat our international targets as we move forward. Businesses and families on the Gold Coast expect our government to deliver results—practical outcomes that make their lives better. That is exactly what the Morrison government has done and continues to do—delivering record support for the economy through jobs so families can cope with this pandemic; ensuring we have a reliable supply of vaccines, which arrived yesterday and are being approved today, to protect Australians; and delivering new joint strike fighters for our sovereignty now and in the decades ahead.
We on the Gold Coast understand that our energy and emissions challenges also need practical outcomes. Our energy mix must be reliable and affordable and must reduce emissions. The good people of Moncrieff expect the government to deliver realistic energy policy and execute well for demonstrable positive outcomes. The Minister for Energy and Emissions Reduction is doing just that—delivering results, just as the government is doing across all portfolios.
Former prime ministers Paul Keating and John Howard both believed that, if you change the government, you change the country. Of course, whether a particular change of government was in the national interest is something they most certainly would have differed on. There is great wisdom in the warnings of our former prime ministers that the choices we make at the ballot box matter. After all, living in a well-functioning democracy like Australia, it's easy to give in to the notion that there's a certain inevitable momentum in our national direction—indeed, that our prosperity is inevitable.
The shock of the impact of the pandemic globally has reminded us all that there is no confident autopilot for government. Despite our highly competent and dedicated public servants, good political leadership matters. To paraphrase Menzies on the art and science of politics: expertise is insufficient in any area of government responsibility, just as confident but ill-informed leadership will also fall short. The pandemic has reminded us that both scientific expertise and artful political leadership are, indeed, vital. If the majority of Australians expect outcomes from the government that make their lives better, as we in Moncrieff certainly do, and if we accept that the parties of government change the trajectory of our nation and our lives, then Australians must choose the party of practical solutions. Otherwise, we are led down a very dark road paved by the good intentions of either scientists or politicians.
Mostly, Australians know that reliable, affordable energy has underwritten our national prosperity. Mostly, they also take climate change very seriously. Meeting our energy needs whilst addressing the emissions challenge of our time creates an imperative for practical solutions. One of the things that I like about the member for Hume is that he understands that his ministerial title, Minister for Energy and Emissions Reduction, encompasses both the essence of what Australians expect him to deliver and the combination of outcomes that Labor refuses to deliver and that the Greens are incapable of delivering—that is, to be for energy and for emissions reduction. Some Greens are so enamoured by the science of climate change that they forget about the science of human energy needs. Other Greens are so absorbed in left-wing politics that their virtue signalling ways are, at best, pointless and, at their worst, lacking in compassion for the very diverse circumstances of Australians. The zealotry of the Greens makes them incapable of delivering any practical solutions.
Labor is capable of delivering sensible reform and practical solutions. The case in point is those reforms of the Hawke-Keating government that were supported by John Howard in opposition. But it seems that, currently, Labor refuses to move to the sensible centre on energy and emissions, despite the best efforts of the member for Hunter. Of course, some in Labor have been infected by the same thinking as the Greens. Others just lack the political leadership to move past either the fear of losing preference that prop up many, many Labor members or the fear of losing inner city seats directly to the Greens. Labor refuses to contribute to the sensible policy in the centre that working Australians prefer because, as the member for Hunter has revealed, the Labor Party has abandoned its traditional base of workers in order to chase green ideology for political expediency.
By contrast, the Morrison government is listening to experts and leading with practical solutions that are pro energy for our economy and that lower emissions for our environment. The approach is very clear. We're investing in technology to create the future that we seek—not trying to tax our way out of incumbent technologies of the past. Those incumbent technologies are, in fact, required for energy to manufacture the hardware for renewables. The government's Technology Investment Roadmap will contribute enormously to Australia's transformation to a low-emissions economy. Sadly, Labor's high-taxing instincts, unimaginative policy doldrums and the political problems I described earlier mean that a big fat carbon tax on Australian families and businesses would be implemented if Labor were trusted to govern. We know from recent history that you can't trust what Labor says about its carbon tax. So let's talk about practical policy solutions and their delivery.
This amendment relates to the Clean Energy Finance Corporation, or the CEFC. For those not familiar with the CEFC, consider the CEFC's own description of its role:
The CEFC has a unique role to increase investment in Australia's transition to lower emissions. With the backing of the Australian Government, we invest to lead the market, operating with commercial rigour to address some of Australia's toughest emissions challenges – in agriculture, energy generation and storage, infrastructure, property, transport and waste. We're also proud to back Australia's cleantech entrepreneurs through the Clean Energy Innovation Fund, and invest in the development of Australia's hydrogen potential through the Advancing Hydrogen Fund.
That description makes obvious the connection between the CEFC and the government's Technology Investment Roadmap. I will delve into this point further. It is important not only for understanding this bill but because those opposite face a choice between virtue-signalling rhetoric and substantive action.
This bill supports the government's long-term emissions reduction strategy by contributing to the achievement of the objectives of the Technology Investment Roadmap. The road map is about driving down the cost of energy, not the Labor-Greens approach of raising energy prices to drive industries and jobs out of existence. It's pro energy, pro emissions reduction and pro jobs. Investment is a key action to drive the achievement of the road map objectives. Ideologues and the naive will back a narrow range of technologies, but more balance is required to lower emissions whilst creating jobs and driving investment.
The CEFC will be pivotal in leveraging private sector investment in priority technologies identified in the road map and the forthcoming low emissions technology statements. The Morrison government is investing in technology to maintain Australia's energy security as we achieve our emissions-reduction targets. That is what the good people of Moncrieff rightly expect. They don't want extra taxes on their businesses and families, and they certainly can't afford it right now. The members opposite, therefore, face a very real test. If they really support jobs for Australian workers then they should support this bill. If they really support lower emissions then they should support this bill. If they support a more reliable and secure energy market then they should support this bill. If they support lower energy prices for Australian families then they should support this bill. The Minister for Energy and Emissions Reduction is delivering what the nation needs and what Moncrieff needs. I urge all members to focus on the needs of their constituents, uncontaminated by green ideology. Hopefully, they will then decide that, like me, they are for energy, for emissions reductions and for this bill.
To reassure Australians and those in my electorate, allow me to outline more about this pro-energy, pro-emissions-reduction and pro-jobs bill. The Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020 will deliver on these key points. It will support more renewable energy by improving our electricity network via the $1 billion Grid Reliability Fund, the GRF. It will improve reliability. It's not enough to just talk about solar panels and wind farms. You have to make the electricity grid reliable and ready for the significant increase in the level of renewables we are already progressing to. The hair dryer has to turn on. The electric toothbrush has to work. Our world-leading deployment of renewable energy sources in Australia needs to be integrated and backed up.
I would like to ask why the opposition leader still prefers policy influence from the member for Melbourne rather than the member for Hunter. It's no mystery why Queenslanders don't want federal Labor in power. If this bill is passed, real climate change action will be powered through the GRF. The CEFC has identified a pipeline of seven projects that could be supported through the GRF. Given the CEFC model, the value of the project pipeline is estimated at up to $4.5 billion and would create at least 1,075 jobs, mainly in construction. One thousand and seventy-five jobs! That's significant. The GRF will support private investment in storage and transmission infrastructure as well as new reliable energy generation, including gas and pumped hydro.
In Moncrieff, business leaders tell me that affordable, reliable power will be critical to our recovery from the pandemic, to grow the economy and create new jobs. Manufacturing on the Gold Coast is worth about $7 billion and 14,000 direct jobs. Those manufacturers need to keep the lights on and the machinery going. Whether you're powering those manufacturers, theme parks, event venues or hotels, energy costs matter to the bottom line for business and to their ability to employ Gold Coasters. Australia has a tendency to rapidly adopt new technologies. We're a world leader, in fact. We're a country full of early adopters. GRF investment can accelerate new technologies to reach the point where they become economically competitive, as households and businesses rapidly adopt them.
That fast adoption trend and its benefits are observable, right now, in the adoption of renewables. On an energy-only basis, costs have fallen rapidly and we have seen $30 billion invested in renewable energy since 2017. Australia is now deploying new wind and solar 10 times faster per person than the global average and four times faster per person than Europe, China, Japan or the US. Just like we were the quickest adopters of video, CD and now streaming technologies, we are too of renewables. About two million, or nearly one in four, Australian households now have solar panels. It wasn't that long ago that it was only 20 per cent. Now it's 25 per cent.
In 2019, the share of wind and solar in Australia's electricity grids was more than double the global average and projected to rise rapidly in coming years. But there's no autopilot for the situation. If you believe in free-market principles, as I do and those on this side of the chamber do, you recognise that there could be market failures. The pollution that leads to climate change is a market failure. Proponents of an emissions trading scheme, an ETS, will sometimes claim that a commitment to free market principles requires you to support a market mechanism like an ETS. In other policy areas, like defence, health and education, governments often do and should reach for a range of options to address market failures. Energy and emissions reduction policies should be selected for their efficacy.
Currently, there's no shortage of investment in clean energy, but the government has identified a lack of investment in the dispatchable generation needed to support the increase of intermittent generation. To balance and integrate high shares of renewable energy, we need more flexible backup generation and storage, gas, pumped hydro and batteries. Again, the importance of technology investment becomes crystal clear. Driving down the cost of new technologies won't raise the cost of incumbent technologies, like coal and gas, that continue to play an important role in our energy mix. Raising the cost of incumbent technologies through an ETS or Labor's carbon tax could be disastrous.
Practical solutions of the Morrison government won't risk our recovery from the pandemic. We will not risk our recovery from the pandemic! We must have affordability and reliability. The GRF will complement the government's Technology Investment Roadmap to ensure affordable, reliable energy for Moncrieff, the Gold Coast and all Australians, reducing emissions at the same time. GRF eligible investments will include energy storage projects, including pumped hydro and batteries, transmission and distribution infrastructure, grid-stabilising technologies and eligible projects identified in the government's Underwriting New Generation Investments, UNGI, program.
To understand the GRF, it helps to put it in the context of projects that it could support. Some examples in Queensland are new transition projects, like CopperString 2.0, dispatchable generation, like— (Time expired)
Grid reliability is a big issue. We know that. In fact, Labor went to the last election with a $5 billion energy security and modernisation fund, based on the CEFC model, to support network investment and to complement the continued growth of renewable energy, including investing in transmission, storage, firming and reliability assets, such as synchronous condensers. Labor has known it for a while. The industry has known it for a while. The government is now acting, in part—in part, they're acting. Some parts of this bill, the extra billion dollars for grid reliability, are not a bad thing in its pure form. But, as usual with this government, it's the detail. It's what they sneak in behind the announcement that you have to worry about.
Labor's concern—and my concern—is the way this bill changes the nature of one of our incredibly successful institutions and the way the government have inserted their ideological fixation with gas into a Renewable Energy Agency. Secondly, it's the way they've managed to take away the independence of the Clean Energy Finance Corporation and give far more power to the minister to decide how the money is spent. We know what happens when ministers in this government make decisions. We've been seeing it for months, the rorting, when ministers get control of how money is spent.
The third part of it is the basic change to the Clean Energy Finance Corporation from a government institution that invests and generates a return for the Australian taxpayer to one that will effectively be allowed, with ministerial intervention, to fund projects that run at a loss. This is a profound change for the organisation—and a change in its skill base as well. This is an organisation built, designed, to invest for a return. It is not an expert at all in the provision of grants. And they are two completely separate things. I have actually worked in both fields, and they are completely different. The expertise that you have around you to make the decisions are different in both those kinds of organisations.
Let's start with a bit of background about the Clean Energy Finance Corporation in the first place, because it is an extraordinary achievement. It was set up by the Gillard government, many years ago now. The corporation seeks to mobilise capital investment in renewable energy, energy efficiency and low emissions technologies, where low emissions are defined by the independent board guidelines. The Gillard government did not define what the guidelines were; an expert board did, because this is an incredibly complex area that is changing every day. There are a small number of people in the world who can actually project where the future of this industry will go. Ministers do not have that expertise. Ministerial departments do not necessarily have that expertise. So we set up an expert board, independent of government, and they set the guidelines. They made contract investments of $900 million in the CEFC's first year. It's a very significant success. It is viewed around the world as the world's best practice green bank. Even Prime Minister Morrison called it, in 2019, 'the world's most successful green bank'. It is very successful. It has leveraged $27.3 billion in private investment. It has deployed $6 billion of CEFC funds to achieve that. It has helped finance around 18,000 small-scale projects and is responsible for around one million tonnes of CO2 abatement annually. This is a success story.
You don't see a lot of ministers or local members running around announcing CEFC grants, but, when you actually look at what's funded—everything from electric scooters to low emissions fertiliser production—it's incredibly broad and it's scattered all around the country. But it happens the way grants should happen: expert people set the guidelines; expert people make the decisions; expert people announce them. Politics is essentially not in this institution at the moment. And this bill will change that.
The member for Moncrieff belled the cat on that, by the way, when she said that the CEFC, through this new fund, will drive investment in the government's priorities in the new technology road map—'in the government's priorities'. The government, not the experts, will set the priorities for this fund. The government—the minister, for that matter—will set the priorities. And I guess those will change from one minister to the next.
Again, one of the greatest advantages of the Clean Energy Finance Corporation for Australia is that it has consistent guidelines that can drive investment. Consistency and certainty matter if you are talking about investment. We've all read the stories and we've all heard the economists talk about—we have heard even the Reserve Bank of Australia talk about—the lack of certainty in energy policy in Australia which has driven investment out the door. Major investments do not take place when policy certainty does not exist. Yet once again we've got a government taking something that does provide certainty and applying to it all of its strange ideas about climate change and its focus on the past. Now here we are again, having all of that uncertainty inserted into one of our great institutions which has been a real success story. It's really quite worrying.
The government has history in this. If you listen to both sides here—if anyone out there is actually listening, and you're listening to both sides, to the government position and the opposition position—we're saying: 'Don't trust the government on this,' and the government are saying: 'No, no; this is really great; we're going to do a great job,' I just want you to focus for a minute on what the government has tried to do to this institution over the years. If the government had been supporting this institution, working with it, really trying to grow it and talking about how fabulous it is for the last seven years, maybe we'd listen with a more open mind. But consider what they've done.
In 2013, Prime Minister Abbott introduced legislation to abolish the carbon pricing mechanism, the Climate Change Authority and the Clean Energy Finance Corporation—abolish them. That was in November 2013. They didn't get it done, by the way. In 2014, the Liberal government made two more attempts to abolish it as part of the package to abolish the carbon pricing mechanism. Both were blocked by the Senate. So in 2013 and 2014 they tried three times. In 2015, the next year, Prime Minister Abbott tried to limit the CEFC's remit to support renewable energy by issuing a draft directive to prevent them from investing in wind and rooftop solar. So, despite all this bragging we've heard today from the government backbenchers about how great Australia's performance in rooftop solar is, Prime Minister Abbott tried to remove it from the investment stream. Treasurer Joe Hockey and finance minister Mathias Cormann wrote to the CEFC stating that, in addition to wind farms, household and small-scale solar should be excluded from the fund in future. An updated investment mandate added four to five per cent to the required yearly average bond rate. In other words, they required at that stage that the CEFC increase its return. Now they're saying it doesn't have to have a return and that it can actually invest in projects which they don't believe will generate a return at all. They've changed their minds on that, but back then that's where they were. In 2016, they decreased the required portfolio benchmark return to the five-year average bond rate, where it has remained since, so there's been a bit of backwards and forwards. Between February 2017 and 2020, they sought to amend the legislation to enable the corporation to invest in carbon capture and storage, and that legislation lapsed. Other federal government announcements have had the effect of reallocating large sections of the total $10 billion funding to specific technology focused funds.
So they have a history of interfering—first attempting to abolish it altogether and then interfering. This is not a government that has been behind this great institution since the beginning. When you look at what they're trying to do today—to move its focus to include gas, which is not a renewable; to change its focus from renewables altogether; and to take away the certainty that investors have by allowing the minister to decide that certain things should be funded or not and by no longer requiring that projects actually make a profit—you can see that they are substantially acting to reduce the effectiveness of this extraordinary institution.
The Clean Energy Council shows that, because of the lack of certainty for renewables in the investment market, just three new projects reached financial closure in the last quarter. That's the lowest quarterly investment in dollar terms since the index started in 2017. Investment is down more than 50 per cent below the quarterly average for the 2019 calendar year. So again we're hearing members of the government talk about how fabulously everything is going but, when you look at the actual figures, investment is down more than 50 per cent below the quarterly average for the 2019 calendar year. That is entirely about a lack of certainty.
I'm going to say it again, and I've said it a couple of times now already: you will not get commercial investment in renewables while the government keeps changing its policy from one thing to another. We know how many policies they've had: direct action in 2013, the EIS in 2016, the CET in 2017—they all have acronyms—the NEG on 15 August 2018, NEG version 2 on 17 August 2018 and NEG version 3 on 20 August 2018. Then there was no policy, as the minister said it wasn't the government's job, a few days later. Then there was a default price and then a big stick version 1, big stick version 2, coal underwriting et cetera. Every month it seems there's another policy. Without that certainty, you do not get investment, and once again they are taking the certainty in this great institution away with this bill. So we cannot support that.
Let's look at some of the detail here. If this bill goes through, it will expand the remit of the Clean Energy Finance Corporation to support the implementation of the government's Underwriting New Generation Investments fund, known as the UNGI program. So it's going to expand the remit to include the UNGI. Let's look at what was funded under the UNGI. So far: Alinta Energy, gas; Australian Industrial Energy, gas; Sunset Power, pumped hydro; Rise Renewables, pumped hydro; UPC Renewables, pumped hydro; BE Power, pumped hydro; Hydro Tasmania, pumped hydro; ZEN Energy, pumped hydro; and Delta, coal. Pumped hydro—good—gas and coal are what have been funded under UNGI. Now, if this bill goes through, the remit of the Clean Energy Finance Corporation will expand to support the government's Underwriting New Generation Investments program, which has been gas and coal up until now. Again, it reflects the member for Moncrieff's statement that the CEFC will drive investment in the priorities in the government's new technology road map. The government's priorities—not the board of experts' priorities but the government's priorities. It creates a new category of investment which is funded from the GRF account, and it will include the kinds of things that are currently funded by UNGI. This is causing quite a bit of concern out there.
Another thing that's causing a lot of concern is the ministerial power. The bill includes a provision which will allow the minister to directly determine an investment is eligible for CEFC support through a non-disallowable regulation—really quite unusual. The new power will allow the minister unprecedented powers in shaping CEFC investments, including on an ad hoc basis. You can imagine the extra workload for an organisation that says, 'No, that's not in our guidelines.' It will be if the minister says it can be. Just imagine that. Just imagine the chaos that will come. Imagine people walking into the minister's office for their investment rather than going directly to the CEFC. That's what will happen. I come from business, and I can tell you right now that, if there's a loophole that says the minister can do whatever he damn well wants, businesses will go to the minister. They won't go to the CEFC; they will go to the minister. We will have a person with no real expertise in the future—he seems to have some expertise in past methods of generating power, but not the future ones—as the person that people go to.
It's quite extraordinary. We have this extraordinary institution, the world's best practice green bank, and in a minute it's going to be the minister's bank. It's going to be exactly the same story as with the sports rorts and what we heard today about the Minister for Foreign Affairs. It will be the minister with this massive fund at his discretion, with all of his mates wandering into his office and asking, 'Can we have some money for this?' Just watch it. The history of this government, when you give a minister the authority to actually spend money, is appalling. That's what we're going to see. There's some good stuff in this bill—more money for grid reliability is good—but the detail is a disaster.
It's my pleasure to rise to support the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020. I feel as a South Australian that I'm particularly qualified to talk about grid reliability and grid sustainability, frankly, given the unbelievable circumstance that unfolded in South Australia back in September 2016, where, in a First World nation like Australia, an entire state's electricity system literally collapsed. That's exactly what happened in September 2016. A weather event that put significant pressure on wind farms in the mid-north saw them exit the grid. The subsequent impact of that was, of course, a dramatic collapse in the load; the natural requirement of the Victorian interconnector to shut off from South Australia; and therefore the state blacking out for four hours—absolutely disgraceful. How did we get into that position? Because we didn't have reliability in South Australia. We saw the Northern Power Station close months earlier. We had an enormous amount of intermittent, unreliable generation in South Australia, and when that came offline the entire state collapsed.
had to be dropped out of the system, again because there was no reliability in the system. What was the state Labor government's response to that? They went out and purchased 300 megawatts of diesel generation to install in South Australia—that's right, dirty diesel was purchased by Labor to patch up the disastrous circumstance that they had created in the South Australian electricity grid. Labor were proud of the fact that they were putting gas generation into the South Australian grid. Gas generation in South Australia was the proud policy that Labor took to the 2018 state election. Diesel and gas were invested in by the taxpayer in South Australia because it had been Labor's policy and Labor's position that diesel and gas were required to support the intermittent wind and solar generation installed in South Australia. I'm a supporter of wind, I'm a supporter of solar and I'm a supporter of transitioning away from fossil fuels. We need to have a plan to transition. If we don't have a plan, what happened in South Australia in 2016 and 2017 will happen in all the other electricity markets across this country. That's what underpins the policy principle of what we are achieving through the bill that is before us right now.
We have an enormous amount of intermittent electricity in South Australia, and we have had to rely very regularly on importing electricity from Victoria. We have plans to build an interconnector into New South Wales to almost double the capacity of energy that can be imported and, hopefully in the future—more importantly—also exported. Interconnectors have the ability to do both. But the reason we needed to pursue the policy of a New South Wales interconnector was to ensure that we never again got into the situation we were in five years ago in South Australia. This allows us to chart a sensible, safe, stable, reliable pathway to emissions reduction in this country, not just in my home state of South Australia but everywhere across the country. As we expand our installed intermittent renewable technology, it needs to be firmed up. We need reliability. In the future that will absolutely come through zero-emissions base-load technologies, and we have some of them already operating in this country—pumped hydro, other hydroelectric sources and so on and so forth. But it's simply not possible to embrace renewable intermittent generation, as we should, without having the ability to firm it up. No Australian would accept putting anywhere else in the nation in the same position that South Australia was in in 2016 and 2017.
There are a few excellent things that the CEFC has been doing in South Australia that I'm really proud of. One is the Home Battery Scheme, which is a partnership between the Morrison government and the Marshall government. This is allowing us to support households to purchase and install batteries, where they have household solar. In fact, if they don't yet have household solar, they can install both the solar panel system and the battery system. That obviously creates the ability for households to generate electricity and use electricity at different times. With solar, much like wind, this is absolutely vital. There's no point generating electricity that can't be used, while the sun is shining and we're not at home. Equally, it's a waste if we're not able to access any of that unstored energy in the evening, when we turn on the television, the oven, the dishwasher and the washing machine. Home-scale battery storage means that you can generate electricity, store it and use it when you need it. In fact, in an even more sophisticated way than that, you can actually sell it back into the grid, if you want to, or you can use it to charge your electric vehicle overnight while it's sitting in your garage. This partnership between the CEFC and the South Australian government is allowing so many people to reduce their electricity bills and reduce their emissions. That's probably the perfect example of exactly what a partnership between something like the CEFC and consumers can achieve. We want to see a lot more of that, but it is absolutely vital that we are remembering that, whilst renewable energy technologies are being embraced and invested in—and the private sector is leading that—in South Australia there are times now where we consume the entirety of our electricity demand from renewable energy, and that's a really good thing. We have the installed capacity across wind, in particular, but wind and solar together provide for the electricity needs of South Australian consumption on a regular basis. But of course that is completely underpinned and supported by the peaking gas generation that we have available to us in South Australia and the ability to bring energy in from Victoria and in the future, hopefully, New South Wales. So, although we can generate all the electricity requirements from renewables at times, there are equally other times when we can't generate any at all. It's not the position of the average South Australian that they're happy to have no electricity if the sun isn't shining and the wind isn't blowing. That's patently ridiculous.
As other technologies are developed into the future, particularly from a storage point of view, and storage technology expands, we, of course, hope to be able to store a lot more of that intermittent energy not just at the household level, as I outlined before with programs like the home battery one. Of course we've got the Tesla facility at Hornsdale in South Australia. That's the biggest battery in the world and yet it doesn't have the capacity to provide significant grid contribution. It's excellent for frequency support and it's good to have as part of the mix; however, the technology needs to develop much more than currently exists from batteries of that type to be able to have a significant capacity to store and inject into the market the type of voltage and wattage that could possibly replace something such as peaking gas capability.
In South Australia, gas has replaced coal. We don't have any coal generation in South Australia anymore, and people can argue as to whether the way in which we transitioned away from sovereign coal generation capability in South Australia could have been managed better—and I alluded to the worst example of the mismanagement of that. I am quite comfortable with the fact that we don't have coal generation in South Australia anymore, and I wouldn't support in any way proposals to build any new coal generation in South Australia. But what has replaced that coal generation has been a combination of renewable energy, particularly from wind farms, as I've said, which at times can provide almost the entirety of South Australia's consumption needs. However, it is supported by peaking gas capability that is effectively key start and can be turned on when needed to fill gaps that might occur because, for example, weather patterns might change and the wind that was providing the fuel source to the turbines that are generating that wind electricity is no longer available. In South Australia we have this from natural gas. I hope that the interconnector that will be built between South Australia and New South Wales can change that dynamic significantly. It will mean that we won't need as much peaking gas capability in South Australia if we can potentially import, when needed, an extra 750 megawatts of electricity from the New South Wales market much like we can bring in around 800 or up to 850 megawatts from the Victorian market through that interconnection. That will allow us in South Australia to export much more renewable energy than we can simply consume to use domestically in South Australia.
Until 25 years ago, South Australia was always a net exporter of electricity generated in South Australia to other states. We want to get back to being an energy exporter, and in South Australia we can because there's enormous capability for more installed renewable energy capacity across the state in wind and solar. There are other technologies, obviously, that we are developing and we equally hope in South Australia to be a major producer and exporter of green hydrogen. We hope to produce and export green steel from the Whyalla plant steelworks. All these opportunities will only come if we have a transition in place.
If we thought in South Australia we could switch off all of our gas capability and operate off only intermittent renewable energy sources like wind and solar at the moment whilst technologies are still developing then those industries and those opportunities would collapse and there wouldn't be the investment appetite whatsoever for people to do what I know they will do if we have a proper plan to transition, which is invest more in wind, in grid-scale solar and in other grid-scale renewable zero emissions technologies, with the opportunity not just to sell in South Australia but to export into other states and through the National Energy Market. But that is only going to be possible if we've got stability and reliability in the grid.
That's exactly what this bill will deliver. It will give us the ability to bring industry certainty and investment certainty to the energy market across the country. That is going to benefit not just my home state of South Australia but all the participants in the National Energy Market and, of course, the others that are not in that grid in Western Australia and the Northern Territory. That investment certainty extends to industries that obviously must rely on reliable electricity. In my home state of South Australia, we have three major smelters—the steelworks at Whyalla, the lead smelter at Port Pirie and up at Olympic Dam the copper uranium mine has a significant smelter as well. They all need reliable electricity and they need a reliable grid without the risk of what happened in South Australia significantly in 2016 but also more regularly with load-shedding events because we didn't have that firmness underpinning that intermittent generation.
This is what the Morrison government is delivering through this legislation. This is giving the CEFC the ability to make sure that, whilst they're supporting clean energy projects in this country, they're also supporting the transition so that we don't have unintended consequences from an overinstallation of intermittent renewable energy that drives base-load providers out of the market because they can't compete against renewable energy at certain points in time and are selling into the market at nothing or negative and therefore get driven out of the market and, when we need them, because the reliability isn't there through intermittent energy they're not there because there was no transition in place to make sure that intermittent electricity was underpinned by the stability that you get from base-load generation. That obviously needs to include technologies beyond renewable technologies.
It would be great if we could do everything with pumped hydro. That's just not possible. No credible person suggests that that can be done. We need to do it through the sorts of technologies that this legislation is going to support. And, of course, the great thing about having a clear plan for transition is that that is going to drive more investment in renewables. If we know we've got a stable and reliable grid then we're going to have more investment in renewable technology because they are going to know that the market is going to be strong and protected from the risks that occur if you don't have stability and reliability. So it is the place for the government to be doing exactly this, and I commend the bill to the House.
The Clean Energy Finance Corporation is a great Labor achievement. Established by the Gillard government, it seeks to mobilise capital investments in renewable energy, energy efficiency and low-emissions technologies where low-emissions technologies are defined by an independent board and guidelines. In its first year it made nearly a billion dollars of investments and, to date, has deployed $6 billion of Clean Energy Finance Corporation funds and leveraged $27 billion in private investment. It's helped finance around 18,000 small-scale projects and every year is responsible for about a million tonnes of carbon abatement. Since it began, it has returned to the Australian taxpayer some $718 million. It's an extraordinary record. It's an organisation which has improved energy technologies in Australia, which has boosted investment and created jobs in Australia, which has contributed to carbon abatement and which has returned money to the budget.
Who could be against that? The answer is the Liberal and National parties. In November 2013, Tony Abbott introduced legislation to abolish the carbon pricing mechanism, the Climate Change Authority and the Clean Energy Finance Corporation. In 2014, the Liberals made two attempts to abolish the Clean Energy Finance Corporation. Both attempts were blocked by the Senate. Then, after they couldn't kill it, they decided they'd try and kneecap it. Tony Abbott tried to limit the Clean Energy Finance Corporation's remit to support renewable energy, by issuing a draft directive to prevent it from investing in wind and rooftop solar—because why would you invest in wind and rooftop solar if you're about climate change? The coalition then changed its investment mandate, increasing its benchmark, which limited the degree to which the Clean Energy Finance Corporation could support new technology development. The coalition has sought to amend the Clean Energy Finance Corporation's legislation to enable the corporation to invest in carbon capture and storage technologies, changes which lapsed in the Senate.
So it has been a great success—and it has been greatly opposed by those opposite, who tried to kill it and, when they couldn't kill it, did their best to try and limit its mandate. Why is that? Because fundamentally there are some on the coalition back bench who either don't believe in climate change or don't believe Australia should do anything about it.
Australia is now in the extraordinary situation of potentially facing European carbon tariffs. In the discussions that Australia has had with Europe, it's quite clear that, if we do nothing about climate change, we could face what RepuTex has referred to in a research note as a 'carbon border adjustment mechanism' as early as 2023. That would require Australian exporters to pay a cost equivalent to the carbon price in the European carbon market, which is currently trading at around $60 per tonne of CO2. That EU price could rise, and Australian exporters could be subject to it. That is a direct potential impact of this government's failure to act on dangerous climate change. They could well be exposing Australian exporters to carbon tariffs.
Yet it's very clear that, if we did act on climate change, it would benefit our economy. A Deloitte report suggests that adopting net zero emissions by 2050 and taking decisive climate action would create almost a million new jobs and add some $3 trillion to GDP. Failing to do so could cost 880,000 jobs and slash some $3.4 trillion from GDP by 2070. Acting on net zero, according to the Deloitte report, would create 250,000 new jobs and deliver an additional $680 billion in GDP by 2070. Deloitte warns that the Morrison government's approach of not adopting net zero emissions could cost the mining, manufacturing, services, trade and tourism sectors. There would be an impact right across Australia—particularly on the Queensland economy, which relies heavily on tourism.
So you'd think that moving Australia to net zero emissions by 2050 would be the smart approach, and that's of course why our largest bank, our largest miner, our largest airline and every state and territory have signed up to it. It's why more than 60 per cent of our trade is now with countries that have adopted a target of net zero by 2050. The Biden administration has locked in that target, with an earlier target for the US electricity sector. And China has said that they are aiming for net zero by 2060. Every state and territory in Australia has signed on to a target of net zero emissions by 2050. It is only the federal government that's a hold-out.
You can get a sense as to why they're holding out when you listen to the cavorting from the tin hat brigade that sit on the coalition back benches. The Prime Minister hasn't committed to net zero, but when he began kicking tyres or musing or market testing, as the ad man in charge so enjoys doing, there were outraged cries from the National Party. There was a call that agriculture should be omitted. I'll quote a terrific piece by Katharine Murphy in The Guardian:
This begs obvious questions. Agriculture should be exempted from … what exactly? Exempted from the technology roadmap the Nationals welcomed? Exempted from a nominal, highly caveated, possible mid-century target that Morrison hasn't committed to adopting, and hasn't even begun to talk about legislating?
She says people are talking about crossing the floor against net zero and as she notes, that would be the first time in which people were crossing the floor against a 'prime ministerial feeling'.
The Clean Energy Finance Corporation has done extraordinarily important work. At the last election, Labor sought to build on its successful model, taking a $5 billion energy security and modernisation fund to the people in the 2019 election which was aimed at complimenting the continued growth of renewable energy by investing in transmission, storage, firming and reliability assets such as synchronous condensers. I commend to the House the Leader of the Opposition's budget reply speech in which he talked about the importance of investing in modernising the grid in order to support the growth of renewables.
The coalition, however, is seeking to create a faux debate over gas. It is quite clear that gas is not a clean energy. There are carbon equivalent emissions associated with gas and it therefore doesn't meet the Clean Energy Finance Corporation's 'low-emission power generation' definition of being an emissions intensity which is less than half the emissions intensity of the relevant energy system. Gas also is a well-established electricity generation technology that doesn't face financial or technological barriers to investment that need to be addressed by public financial support. There aren't big decisions being made around the investment in major gas projects and there aren't long gas lines in Australia which are facing approval processes. And for those who are touting gas as being the great solution to Australia's woes, it is worth noting that the gas price has approximately halved over recent years, yet many of the benefits that were forecast to flow from a lower gas price don't appear to have materialised. So this idea that Australia's salvation lies in gas is belied by the evidence that we see from the recent significant fall in the Australian gas price. It's a bit like people saying it would transform transport if the petrol price at the pump were to go from $1.20 down to 60c. Then a year later the price is at 60c and people are still talking about the great benefits of doing it. We've had that experience of a lower gas price and it doesn't appear to have had the transformative impact that the gas boosters would have you believe.
The bill also includes a provision which allows the minister to directly determine an investment is eligible for support from the Clean Energy Finance Corporation through a non-disallowable regulation. Former Clean Energy Finance Corporation CEO Oliver Yates has warned that that power fundamentally undermines the integrity and independence of the Clean Energy Finance Corporation. A letter from former CEFC and ARENA board members says:
We do not support changes to the CEFC's legislation that undermine its independence, low emissions remit, commitment to profitability, or its avoidance of fossil fuels as part of a clear commitment to assist in the reduction of Australia's climate emissions.
You particularly wouldn't trust the current minister with additional latitude. This is, after all, the minister who was embroiled in the grasslands scandal where he failed to declare a private interest in a company being investigated by his own department and admitted on radio that he was advocating for his own interests, not the public interests. The minister was also behind the 'Clovergate' scandal in which he used doctored figures in official ministerial correspondence to attack the Sydney lord mayor, Clover Moore, and then failed to ever admit that he had done the doctoring. He's the man behind the 'watergate' scandal in which the company, Eastern Australia Agriculture, of which the minister used to be a director and which was a Liberal Party donor, was allowed to undertake a water transaction valued at $80 million, which appears to have been a significant overvaluation.
Under the coalition, we have had renewable energy investment smashed. New figures from the Clean Energy Council show that just three new projects reached financial closure in the last quarter—the lowest quarterly investment in dollar terms since the index started in 2017. Investments were down more than 50 per cent below the quarterly average for 2019. We should be seeing investment and jobs in renewable energy soaring at the moment. But, as a result of the chaos and the many energy policies that have been pursued under the coalition, we don't have those jobs and we don't have that investment. There are fewer jobs in clean energy today as a result of the coalition's hopeless mismanagement of the climate and energy portfolios.
Australian emissions are too high. The government has no plans to reach their inadequate emissions reduction targets. They are relying on low targets and dodgy tricks in order to even have a hope of getting to those targets. Yet they're soon going to have to face up to the world. They are soon going to be in a position in which they will have to account for Australia's appalling record on climate policy.
It doesn't have to be this way. If you look to Britain or New Zealand, you can see Conservatives that have accepted that they need to do something about climate change. They've accepted the science, they've accepted the good economics and they've gotten on and done it. Those countries will not be facing carbon tariffs from their trading partners. But, as a result of the coalition's bungling of this policy and as a result of the fact that they are in the thrall of people like the member for Hughes—who, when he's not peddling misinformation on vaccines is peddling misinformation on climate change—there are still those in the coalition backbench who think that the Bureau of Meteorology is engaged in some sort of conspiracy or cover-up over climate change. There are still those on the coalition backbench who would like to see taxpayer dollars funding new coal-fired power stations that the market won't touch. These people on the other side want to say that they are the party of the market, but, when it comes to coal investments, they want public dollars to go where the market isn't willing to invest: in new coal-fired power stations.
I commend the previous speaker from the coalition for saying that he didn't think that taxpayer dollars should go behind new coal-fired power stations. I look forward to such statements from every coalition member on the other side.
One of the most common issues raised by my constituents in Reid is the need to secure affordable and reliable energy while addressing climate change. Time and time again, these two issues are raised in community surveys, mobile offices and, simply, when locals in my area pick up the phone to call my office. These two issues are not in competition with one another. In fact, securing affordable energy and lowering emissions go hand in hand. Our government recognises this. Our policies on energy and emissions reduction work hand in hand, driven by innovation and new technologies.
The Morrison government is improving Australia's electricity network to support more renewable energy through the $1 billion Grid Reliability Fund. The Grid Reliability Fund will ensure that Australia's world-leading deployment of renewables is integrated and backed up. The fund will support private investment in storage and transmission infrastructure, and new reliable energy generation, including gas and pumped hydro. It's not enough to simply back renewables; we need to ensure that they are a supported and sustainable source of energy as we transition away from fossil fuels. This is what the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020 will achieve.
The Clean Energy Finance Corporation has already identified a pipeline of seven projects that could be supported through the fund once the legislation has passed through the parliament. The investment value of the project pipeline is estimated at up to $4.5 billion and would create at least 1,075 jobs, mainly in construction. This is a huge win for Australia, especially right now as Australia recovers from COVID-19. Affordable, reliable power will be critical to grow the economy and create new jobs.
Australia's experience has been that, when new energy technologies become economically competitive, households and businesses adopt them. We're seeing that firsthand with renewables right now. On an energy-only basis, costs have fallen rapidly, and we've seen a $30 billion investment in renewable energy since 2017. Australia is now deploying new wind and solar 10 times faster per person than the global average and four times faster per person than Europe, China, Japan or the United States. About two million, or nearly one in four, Australian households now have solar panels. In fact, in my electorate of Reid, the Morrison government has delivered over $81,000 for solar panels to be installed in local schools, childcare services and community groups. It's meant that schools like Strathfield North Public School or childcare centres like Abbotsford Long Day Care Centre can cut their emissions, cut their electricity costs and support greater awareness of environmental responsibility for the whole community.
While the uptake of renewable energy is promising, it brings challenges as well. While there is no shortage of investment in clean energy, the government has identified a lack of investment in the dispatchable generation needed to balance intermittent generation. In other words, we need sources of reliable energy stored or ready to dispatch to balance our supply-and-demand needs. Wind and solar power are great renewable sources, but they rely on unpredictable factors—namely, our weather—to produce the energy, and this is why we are investing in flexible backup generation and storage, gas, pumped hydro, and batteries to balance and integrate high shares of renewable energies. That's why our technology focused approach is so practical. By focusing on getting the costs of new technologies down, we won't raise the cost of the incumbent technologies like coal and gas that continue to play an important role in our energy mix as we transition to a low-emissions economy.
If passed, this bill will help drive our transition to a low-emissions economy, it will secure reliable energy and it will create jobs for Australians. Through the Grid Reliability Fund, the government will invest in the new energy generation, storage and transmission infrastructure that's necessary to ensure the future reliability of our electricity systems. By pursuing a technology-not-taxes approach, we will achieve our emissions reduction targets cost-effectively whilst maintaining our energy security. But Labor have said they will oppose this bill. They will oppose affordable, reliable power. They will oppose new jobs across the sectors. They will oppose our transition to a low-emissions economy. The modern Labor Party is so busy fighting over its green ideology that it cannot agree on any practical solutions for Australia's energy needs. Labor's position on the bill will show whether it is on the side of technologies or on the side of taxes. Right now, Australians do not want further taxes. They do not want to be burdened by higher electricity costs. What Australia needs right now is support for a diversified energy sector, greater job creation and a technology-led transition to a low-emissions economy. The sustainability of our energy grid and our environment relies on what this bill will deliver: a practical, technology-led plan for affordable energy and emissions reduction.
I rise to speak on the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020. Labor established Australia's CEFC, the nation's first clean energy bank, in 2012 to facilitate increased finance into the clean energy sector. Under Labor, the CEFC sought to drive capital investment into renewable energy, energy efficiency and low-emissions technologies. But, as we know, the Abbott-Turnbull-Morrison government has a track record of attempting to undermine the CEFC and ARENA, the Australian Renewable Energy Agency, whilst claiming credit for these agencies at the same time. My constituents and all those who care about our environment and renewable energy know better. They fear, and Labor fears, this legislation will open the back door to secretly shovelling cash onto the balance sheets of the government's big polluter mates. So Labor will not support this bill. We will not support a Grid Reliability Fund which is a means of funding fossil fuel projects via the public purse.
The people of Corangamite care deeply about their local and our global environment. The health of our planet and getting well-paid, secure jobs for Corangamite are two of the most important priorities for my constituents. They will not stand for the misuse of the CEFC to undermine the health of our region or the planet, or the many clean energy jobs that will be created as a result of this clean energy investment.
The Clean Energy Finance Corporation is a bank, led by clever finance experts who, under the Gillard government, were given $10 billion to invest. If they weren't working for the CEFC, lots of these employees would be working for places like Macquarie Bank, Lloyds, Westpac or UBS; however, they do work for the CEFC. They work for the CEFC in Melbourne, Sydney, Brisbane and Perth, and every day these clever employees ensure that these taxpayer funded investments into renewable energy projects are performing well. They also look for opportunities to invest more and better. The employees of the CEFC are exceptionally good at what they do. Even the Prime Minister has recognised their leading practice, calling the CEFC the world's most successful green bank.
Here are some of the facts that have been mentioned already in this debate but are worthy of repeating: the CEFC has returned $718 million to Australian government coffers since its formation in 2012; it has deployed $8.2 billion and leveraged private sector investment of $27.8 billion over the same period; and it has fully or partly funded around 18,000 projects. These projects have a lifetime reduction impact equivalent to 220 metric tonnes of carbon dioxide.
The difference between what these people do now and what they would do if they worked at any other financial institution is very simple. It is about our nation making a valuable contribution to the reduction of global emissions, to taking on climate change, to taking our net zero emissions target to 2050 and to reducing our impact on biodiversity loss, on the decimation of native species, on coastal erosion and on sea level rise. The work of the CEFC creates new, secure jobs. So that's it: that's the fundamental difference between the way the Commonwealth clean energy bank behaves and the way commercial banks behave. Finance is complex. The energy sector is complex. But the principle behind the CEFC is not rocket science. It's in the name: the Clean Energy Finance Corporation.
While the CEFC has performed very well over the last seven years, it is despite the fact that the Morrison government has had 21 failed energy policies in that time, soon to be 22. The kind of uncertainty the Morrison government trades in for its own political gain has crippled the market and decimated trust. In 2013 the coalition government tried to abolish the CEFC. In 2014 the government tried to abolish the CEFC twice. In 2015 the government tried to exclude wind and rooftop solar from the CEFC's permitted investments and, from 2017 to 2020, the government expended considerable effort on failing to transfer the CEFC's focus to capture renewable technologies.
The Morrison government has no plan to reach their emissions reduction targets. They are playing accounting games and have played dodgy tricks with carryover credits. Official projections from the government show Australia will fall well short of targets that were too low to begin with. Did you know that new figures from the Clean Energy Council show that just three new projects have reached financial closure in the last quarter? Now we're told they are looking to strengthen the CEFC and improve the bank's capacity to enhance reliability of the grid. To those opposite I say: 'I don't believe you. The members on my side don't believe you. The people I proudly represent don't believe you.' This is the issue before this House today.
The Morrison government wants to change the way the CEFC works, but can it be trusted? Its track record shows otherwise. It doesn't want to change the way the CEFC works because it says there's something wrong with how the CEFC works or because it says the CEFC needs to be able to do something it can't. The good in this bill doesn't require this bill. If the government wants to put another billion dollars into the CEFC, let's do it. If the government wants the CEFC to be able to invest in grid reliability projects, then—good news—it already can. Those are the reasons we've been given, but they simply don't make sense, which is why we have an illustrious group of former senior executive and board members from both the CEFC and the Australian Renewable Energy Agency writing to reject the government's changes. This letter simply states that none of the amendments in this bill would improve the CEFC's clean energy outcomes, contribution to grid reliability, commercial success or contribution to emissions reduction, and they see no compelling reason to support the bill. Instead, we're left to speculate about what this government actually wants. Here's one possibility: the government is changing the CEFC because it wants to use financial complexity to conceal a time-honoured Liberal-National practice of investing taxpayer money into fossil fuels. That seems very possible, given this government's history and the fact that the explanatory memorandum notes certain types of gas-fired electricity generation will now fall under this new definition. This is the concern of my constituents and this is the concern I bring to this House. If the government wants to spend taxpayer money to pad the balance sheets of its commercial polluter mates then, at the absolute least, one would hope they would have the guts to look the Australian people in the eye when they do it.
Because the Morrison government has given us reason to be suspicious, Labor will not support this legislation. We will not support it until it has the kind of restrictions in place that ensure the CEFC only invests in commercially viable renewable energy projects—restrictions that ensure the CEFC isn't used to redirect money to projects that exclusively benefit the Liberal Party and its donors and restrictions that demand that the CEFC isn't used to invest in fossil fuels. Getting this right is important. It's important because of the invaluable work the CEFC does in reducing our carbon footprint, reducing our impact on climate change, reducing our impact on the environment and creating new and rewarding jobs.
People in my community are proud of our environment. They're proud of our magnificent coastline, our waterways and our iconic surf beaches. They want to look after our environment, and, like me, they are passionate about preserving Australia's environment for future generations. They also want to see well-paying green-collar jobs driving prosperity in Geelong, in Leopold, across the Bellarine, in the Golden Plains and down to the Surf Coast. There is frustration at the current energy crisis, frustration with a federal government that has been dragged kicking and screaming to act and frustration with the many missed opportunities we've had over the past seven years—seven years of the Abbott-Turnbull-Morrison government's failure to turn our green energy demand into good jobs and good opportunities for regions like mine. Embracing renewable investment makes absolute sense. A well-funded and well-functioning CEFC makes absolute sense. It's good for jobs, it's good for our economy and it's good for our environment.
We support net zero emissions by 2050, and so does every state and territory across Australia. It is only the federal government that will not make this commitment. The Labor Party won't stand by and watch as this government undermines the institution that Labor created and what it stands for: reducing our emissions. The Clean Energy Finance Corporation stands for clean energy. Let's ensure that we keep it that way and that the CEFC continues to do its job: supporting industries that support renewable energy and the reduction of our emissions. Our future generations depend on it.
I rise to speak on the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020. The bill will assist in improving Australia's electricity network so it can support more renewable energy through the $1 billion Grid Reliability Fund. This fund is part of the Morrison government's plan for a technology approach—not a taxes approach—to the energy market, ensuring Australian households and businesses can access affordable, reliable energy. The Clean Energy Finance Corporation has already identified that the fund could support seven projects with an investment value of up to $4.5 billion and the ability to create over a thousand jobs.
As Australia emerges from the COVID-19 pandemic, these jobs will be crucial in growing the economy and assisting in our nation's recovery. The fund could support investments in energy storage projects such as pumped hydro and batteries, transmission and distribution infrastructure, and grid-stabilising technologies. In New South Wales, the Grid Reliability Fund could support projects such as the creation of renewable energy zones and dispatchable generation projects. Importantly, the new fund will not divert the Clean Energy Finance Corporation's existing $10 billion allocation away from clean energy projects, and the bill has no impact on the Clean Energy Finance Corporation's ability to use this existing allocation. The bill also has no impact on the independence of the Clean Energy Finance Corporation or the capacity of its board to independently determine which investments it should make.
Australia's experience has been that, when new technologies become economically competitive, households and businesses rapidly adopt them. We've got a record that all Australians can be proud of. One in four Australian homes now have solar on their roof. That's the highest uptake of household solar in the world. And last year, Australia invested $7.7 billion, or $299 per person, in renewable energy. On a per-person basis, this places us ahead of countries like Canada, Germany, Japan, Korea, New Zealand and the United States.
This creates opportunities but also several challenges, including the need for more flexible backup generation and storage to balance and integrate high levels of renewable energy. We need to ensure that the lights stay on when the sun isn't shining and the wind isn't blowing. That's exactly the type of investment that this bill is designed to support. It's also why the Morrison government has a technology-centric approach, focused on bringing the cost of new technologies down rather than raising the cost of traditional sources such as coal and gas, which continue to play such an important role in our energy mix. It's an approach focused on delivering affordable, reliable energy that Australians rely on, whilst also reducing emissions.
There are many innovative renewable energy projects across Australia, and I'd like to briefly touch on three important projects in my own electorate and across the Central Coast. One such example is Star Scientific. It's a hydrogen research and development company in Berkeley Vale—north of my electorate—dedicated to creating safe, reliable and affordable energy with zero emissions. Matthew Hingerty, the company's chief of communications, said that he was proud of the innovative technologies developed by the company. These include a unique catalyst called HERO that instantly converts hydrogen into heat without combustion—an example of the world-leading research being conducted into energy generation right here in Australia.
ReCarbon is a multinational company with operations on the Central Coast. The company is committed to developing manufacturing and marketing systems using microwave energy to re-form greenhouse gases like carbon dioxide and methane into hydrogen and other products. Philip Sohn, the head of global business development at ReCarbon, said the business had established a first-of-its-kind biohydrogen technology cluster. He said the project aims to take organic waste and convert it into biogas, which is then placed into the carbon system to make hydrogen. This is another example of an initiative helping to reduce waste and generate clean energy at the same time.
Licella and its pilot plant in Somersby use catalytic hydrothermal reactors to rapidly and economically transform biomass, waste plastic and residues into a synthetic oil or biocrude to produce more sustainable fuels, chemicals, waxes and plastics. Licella's co-founder and CEO, Dr Len Humphreys, said the business was 'a great example of Australian innovation tackling one of the world's major issues'. These are just some of the exceptional businesses across my local region that are dedicated to delivering a cleaner, more sustainable future.
The Morrison government also has a strong focus on the cost of energy, and it continues to deliver cheaper power. There have been consistent CPI reductions in retail prices for seven consecutive quarters, and wholesale electricity prices have fallen for 16 months in a row. They are now at their lowest level in six years. This bill will further assist in supporting energy projects to drive cost reductions. It will also support the objectives of the Technology Investment Roadmap as part of the Morrison government's emissions reduction strategy. The key to our plan is to balance the technologies that will bring down emissions, whilst also creating jobs and driving investment. The Clean Energy Finance Corporation will play a key role in leveraging private sector investment in priority technologies identified in the road map. Through a 'technology not taxes' approach, we'll achieve our emissions reduction targets cost-effectively while maintaining our energy security. The Morrison government will continue to work very hard to deliver affordable, reliable energy for hardworking households and businesses across Australia. This is an issue that is very important to my electorate of Robertson, on the New South Wales Central Coast. I commend the bill to the house.
Labor, of course, established the Clean Energy Finance Corporation, and we're very proud of it. We did it to drive private investment in clean energy, and the fact is that it's been a huge success. The idea of creating something must sound alien to a government whose repertoire mainly alternates between undoing things and, most of the time, doing nothing at all. I say to those opposite that it is worth the effort and they should give it a crack some time. Try and create something. Try and make a positive difference rather than just tearing things down. As the shadow climate change and energy minister said in here yesterday, the CEFC has become one of the world's leading green banks. Even the Prime Minister, from time to time, has described it in those terms.
The Clean Energy Finance Corporation is independent, it funds low-emissions technology and it must make a positive return. It has succeeded in all three. The CEFC has a proven record of leveraging private investment. It has helped drive more than $27 billion in additional private sector investments and returned more than $718 million to taxpayers since its creation. Here you have a vehicle doing exactly what Labor said it would do when we created it. It's created jobs, stimulated private sector investment and produced a return to taxpayers. Good policy! It has helped 18,000 projects, and those 18,000 projects have all created jobs. It is responsible for reducing emissions by around one million tonnes of CO2 a year. But what's the Liberals' response to this? They opposed it from the beginning and they tried to attack it since they came to power in 2013. They have repeatedly tried to abolish it and they have continued to undermine its focus on clean and renewable energy. They've changed leaders a few times but what hasn't changed is the hostility towards the Clean Energy Finance Corporation. We will protect the financial integrity of the CEFC to retain the strict safeguards that ensure it only invests in economically viable projects that continue to provide a return to taxpayers.
But the government's bill undermines that. This bill would undermine the independence of the CEFC. It would hand unprecedented powers to the minister and allow him to undermine the financial integrity of the CEFC's investment decisions. This would be bad for any minister, if you chose them at random, but when that minister is the member for Hume the alarm bells are really ringing. This is a minister who failed to declare a private interest in a company being investigated by his own department. This is a minister who admitted on radio to advocating for his own interests rather than the public interest. This is the minister who used doctored figures in his bizarre war against the Sydney lord mayor, Clover Moore. This is the minister caught up in his own Watergate. As energy minister, he habitually misleads and fails. He says that the country is on target to meet its commitments that they made under the Paris accord. We know that that isn't true. This is the minister who stands in this chamber and tries to take credit for the reductions that we saw in emissions during the period of the Rudd and Gillard governments and, indeed, tried to use the Kyoto credits in order to disguise this government's failure since it came to office. This is a minister who thinks it's a good idea to use taxpayer money for the proponent of a new coal-fired power station in North Queensland—to give them money to do a study on whether their project is going to stack up—and then has the hide to speak about taxpayer funds not being used and how it's 'all about technology'. This is a minister obsessed by slogans and lacking in substance. This is a minister who, frankly, we don't trust with public funds. It is that simple. The record shows that that is very wise indeed.
But this bill allows the minister to choose investments and also removes the requirement for those investments to make a return. Think about this. The party of markets—they would have you believe—wants to remove the criteria in this legislation which requires a positive return for investments. Marry that up with their rhetoric! In his written submission, the former CEO of the CEFC, Oliver Yates, stated, 'The fundamental concern with this bill is that it will threaten the CEFC's successful business model by undermining its commerciality, independence, culture, staffing and highly specialised skills'—an extraordinary indictment.
Labor supports the expansion of the CEFC to help deliver a modern electricity grid, but not for gas generation investments that are neither new technology nor meet the definition of low-emissions technology. Gas power is a well-established technology that does not face financial or technological barriers to investment, which can be addressed by public financial support. Where they have stacked up, environmentally, Labor has been supportive of new gas projects. That's on the basis that it is then a commercial decision, once environmental protections are put in place, over whether they proceed or not. But we know that the largest barriers to further generation are the energy policy uncertainty created by this government and the issue of carbon risk that is being factored in. Grid-firming energy sources, like gas, certainly have a role to play in our energy mix. There's no question that's the case. But that doesn't mean we should pretend it's something that it's not—that it's eligible for the Clean Energy Finance Corporation processes.
The CEFC has demonstrated how successful we can be in leveraging private investment to modernise our energy systems and, in doing so, our economy. It has shown us how we can succeed in the future, but this bill takes us back to the past. It will hold us back from what our future should be as a renewable energy superpower, a renewable energy superpower that is creating jobs, that's creating sustainable jobs and that's exporting renewable energy, such as the project, in the Northern Territory, to export renewable energy to the Northern Territory. There are enormous prospects. There are people, like Mike Cannon-Brookes, who have adopted a vision about our potential to export energy to our north, in particular, to the growing middle class that we see in Indonesia and other countries to our north. We have this enormous potential. But we don't achieve it by this constant undermining.
We don't achieve it either by the sort of energy vision they have of oil and gas exploration off the coast of the member for Robertson's electorate—I note the member for Robertson has just spoken—or the member for Dobell's electorate. I was up at Terrigal Beach with local constituents and community organisations opposing this proposal. The member for Robertson said she's opposed to it. Indeed, the members for Mackellar and other seats on the north side of Sydney say they're opposed to it too. But the government doesn't say that. The government, led by Minister Pitt, think, 'Let it rip!' They think it's a good idea to have potential drilling just five kilometres off the coast—off Manly, off Narrabeen, off Terrigal, off the beautiful beaches right up to Newcastle and Port Stephens. Whenever this government goes anywhere near energy policy, they get it wrong.
There are some aspects of the bill that Labor does support. They are those parts that allow for the CEFC to more easily invest in storage and transmission assets, to support the continued decarbonisation of the electricity sector. The expanded remit to modernise the electricity grid is a step towards Labor's own policy that I announced, in the budget reply, last year to rewire the nation. What we said in October was that we would invest $20 billion to rebuild and modernise the grid, in line with a blueprint that's already completed. The blueprint's there. It's not a blueprint from the Labor Party or the Liberal Party; it's a blueprint from the Australian Energy Market Operator, signed off by all governments, Labor and coalition, throughout the country.
Modernising the grid will provide thousands of new construction jobs for Australians, with many of those in our regions. Importantly, it will revitalise traditional industries, including steel and aluminium, and allow growth in new sectors, like hydrogen and battery production. Fixing transmission allows the market to drive least cost, reliable, new energy production. It is technology neutral in the truest sense. This should be something that is supported by those opposite. Well, we doubt whether they'll do anything more than they've done in the last seven years, which is fumble about, held back by the ball and chain that is the member for Dawson, the member for New England and others, including the minister there.
By establishing the Rewiring the Nation Corporation and keeping it in public hands as a government owned entity, Labor will ensure the grid is rebuilt at the best possible price. The Rewiring the Nation Corporation will partner with industry and provide low-cost finance to build the Integrated System Plan. The result will be cheaper electricity prices for homes, cheaper electricity prices for manufacturing, cheaper electricity prices for businesses and more reliability. Labor will ensure Australia's modern energy grid will be built by Australian workers using Australian suppliers by mandating local supply and local labour, with local apprentices being trained at the same time. We will build an electricity network designed for this century—one which accounts for the rise of renewables as the cheapest new energy source and links them up to the grid. Cheap, clean energy will be our competitive advantage as a nation. That should be our future. Our amendments to this bill are a step towards that future.
I'm pleased to rise today to speak on the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020. I'm glad of the opportunity for a number of reasons. I think there is a misconception among some circles of the government that regional Australia does not want to see the types of projects the Clean Energy Finance Corporation funds, but nothing could be further from the truth. I want to talk a bit about the various ways small businesses and community organisations in my electorate are taking the lead on renewables, filling the space the Morrison government has clearly vacated. Firstly, though, I just want to touch on some aspects of this bill which spark my interest.
Labor is the one that created the Clean Energy Finance Corporation under the Gillard government. It was a great time for investment in this emerging industry under the previous Labor government because Labor saw and understood the opportunities that it could create. Not only that but Labor actively worked to encourage and support growth in this industry. That's because we understood that this could lead to more jobs—something my electorate, which has traditionally had one of the highest unemployment rates in the country, could do with. Labor understood that encouraging private investment in renewables could pay dividends to the taxpayer, and it did, not only through returns to the green bank but to everyday Australians' hip pockets through lowered power bills. Again, in my electorate, where the average income is low, this is critical. There is flow-on benefit to flow-on benefit. That is without even looking at the environmental benefits from investing in and growing the renewable energy sector. To put it plainly, this just made sense, and it still does.
Unfortunately this bill is just another attempt by the Liberal-National government to undermine the key functions of the CEFC and continue to plunge the renewable energy sector into uncertainty. There are some parts of this bill that I do support because certain aspects will make it easier for the CEFC to achieve the goals that Labor originally had in mind. Some aspects of this bill will modernise the electricity grid, which will support the further uptake of renewable generation. That is absolutely something we want to see. We want to make it easier to decarbonise the electricity sector, and Labor supports moves to do so. In short, we support the parts of this bill that stay true to the original purpose Labor gave to the CEFC. If it's consistent with that view and helps make that goal easier to achieve, we support it. What I won't support, however, is any move to undermine those goals and to fundamentally change the CEFC's purpose to support renewable energy generation.
Sadly, that is largely what this bill is seeking to do and why Labor is proposing such substantial amendments. The bill is seeking to use a fund designed to encourage renewable energy projects to pay for gas generation projects. Gas generation is not a new technology and pretty clearly does not meet the definition of a low-emissions technology. Not only this but the bill wants to give the minister, Angus Taylor, the power to decide what would be an eligible investment and it removes the requirement that CEFC investments make a positive return. So it takes a highly successful, world-renowned green bank and turns it into support for fossil fuel projects the minister wants to progress, with no guaranteed financial benefit for the taxpayer. Why? It makes absolutely no sense at all. Not only that but it completely contradicts what the CEFC was created to do and it is completely and utterly unnecessary. That is why Labor are moving the amendments we are today—to make sure that the CEFC can maintain its remit.
The Clean Energy Finance Corporation has been a roaring success. It is now viewed as the world's best-practice green bank, the most well designed and successful of its kind. It has a proven record of leveraging private investment, helping to drive more than $27 billion in additional private sector investments. This in turn has seen more than $718 million returned to taxpayers. That is no small feat. It is truly remarkable. Even more remarkable, it has done so under a Liberal-National government that has continually sought to undermine and even abolish it. Imagine what we could have achieved if this industry had continued to receive certainty, encouragement, investment and support under a Labor government. We have proven that that is exactly what we would have provided.
At the last election, I was proud to announce that a Shorten Labor government would establish a community power hub on the New South Wales South Coast, a hub that would have helped renters and social housing residents benefit from cheaper and cleaner renewable energy. It would have supported local projects and local jobs. It would have helped us reach our Renewable Energy Target, because Labor has always been the leader when it comes to cheaper, cleaner renewable energy. You know what I hear when we talk about renewables? Jobs, jobs, jobs. The New South Wales South Coast needs job creation, but the Morrison government is leaving us behind. If the government is trying to say there is no demand for renewable energy projects to be funded under the CEFC then I invite the Prime Minister to visit the South Coast to learn a thing or two about this.
The Morrison government's complete misunderstanding—let's call it that—of what people in regional areas like ours want when it comes to action on climate change was perhaps proven only last week when the Deputy Prime Minister tried to 'rescue' the agricultural sector from clean energy targets. The agricultural sector in my electorate don't want to be rescued; they want to be part of it, and many of them already are. The group Farmers for Climate Action, which I know sports members from my electorate, was quick to call this out. Even the National Farmers Federation couldn't let that one go. The reality is that, in the gaping black hole that has been this government's energy policy, local industry, including farmers, and the community sector have been working to fill the space.
I want to spend some time talking about some of the evidence from my electorate which I think supports this and demonstrates why we simply do not need to be opening up the CEFC to fossil fuels—apart from the obvious, of course. Let's just explore where the government can and should be investing. I want to start with one new, exciting project set to get off the ground in Nowra which I am pleased to say has received support under the government's microgrid energy initiative. It's definitely a positive step to see a grant going towards this great project, but I think it truly highlights what innovation is out there just waiting for some investment because this project is being driven by local dairy farmers and by industry. A new large-scale renewable energy biogas power generation plant is being built in Nowra and will receive manure from a small group of local dairy farms. The methane will be extracted and used to produce clean green energy which in turn will be given back to 18 local dairy farms. Why? Because these farmers want to be a part of the renewable energy future. They can see the value; they can see the difference this will make to their businesses and to the environment and they don't want to be left behind. A far cry from what the Deputy Prime Minister is saying and a far cry from what this bill is trying to do by shifting to fossil fuels. That's just one example, but there are many more.
Repower Shoalhaven is a community-run organisation that helps to deliver community solar projects for businesses and individuals. It has a strong volunteer base and wants to help locals be a part of the clean energy future. Repower Shoalhaven has worked with Flow Power to co-develop a solar farm in Nowra. It's a community initiated scheme and it will sell solar power to businesses near and far. Even the City of Sydney council wants in, committing to buy its electricity from Repower Shoalhaven along with two other regional renewable energy farms. Again, what do I hear when we talk about a project like this? Jobs, jobs, jobs. Local jobs for local people to help reduce power bills for people across New South Wales. It is truly remarkable and it is all being driven by our local community.
Just last week I met with the Jervis Bay and Districts Meals on Wheels, a fantastic local organisation working to support elderly people and those with a disability in our community. What was one of the things they wanted to talk with me about? Their dream of putting solar on their roof to help lower their power bills. Community organisations all across the South Coast could be benefiting from this. In the grants programs I have run since being elected, I have had so many requests for funding to support renewable energy projects. The Yulunga Public Hall in Manyana, the Durras Community Association, Bay & Basin Community Resources and the All Saints Anglican Church have all told me that they want solar power to help them. Broulee Surfers Surf Life Saving Club also wants to purchase Tesla batteries to help it prepare for future emergencies. We know community organisations run off the smell of an oily rag and solar could make all the difference if only they could afford to fund it.
Under the last round of the Stronger Communities Program, I was delighted to help the Southcoast Health and Sustainability Alliance, or SHASA as it is known locally, install a solar system with backup batteries at the Red Door Hall. This is a Moruya institution which provides a weekly free meal to people feeling isolated or financially disadvantaged, and SHASA is one of the many local organisations that are driving support for renewables in the Eurobodalla. Under that same funding program, SHASA was looking for funding for two electric vehicle charging points which, unfortunately, I was unable to fund. Still they are looking for innovative ways of driving investment. They are also partnering with Micro Energy Systems Australia and the Australian National University to conduct a feasibility study into eight microgrids across the Eurobodalla. The three-year study will work with the community to make sure that the microgrids will meet the needs of locals with the aim of making sure people don't lose power in an emergency, something many of us unfortunately experienced during the bushfires, and something we all want to avoid happening again.
It is clear that local people want to make our electricity network more reliable and more resilient. Our councils are also driving this. Shoalhaven City Council adopted a sustainable energy policy in May 2019 to achieve net zero emissions by 2050. The Eurobodalla Shire Council has an emissions reduction plan which aims to source 100 per cent of the council's electricity from renewable energy by 2030. We also have a range of community and business funded electric vehicle charging stations across the South Coast that aim to encourage the uptake of electric vehicles. I could go on and on, but I think the point is clear: people in my electorate of Gilmore on the New South Wales South Coast want to see investment in renewables. We want to engage in the opportunities that renewables provide and we want to be a part of the renewable energy future. Without government investment and support, we will get there but it will be slower and it will cost more.
If the government were serious about meeting our obligations under the Paris climate change agreement and about achieving net zero emissions by 2050, then it simply would not be putting up bills like this one. We would be investing in these types of projects as an absolute priority. We would be helping our farmers do what they can to reduce emissions because they are the ones at the forefront, bearing the brunt of this government's inaction. Drought, bushfires, flood—they don't happen in isolation; they are happening for a reason. And farmers want something done to reduce the impact of climate related disasters before it's too late.
Bills like this hurt the job creation market. Because of the Morrison government's chaotic and abysmal policies, we have seen a collapse in new large-scale renewable energy projects. Investment and jobs in renewables should be taking off. Place like the South Coast should be reaping the rewards that this industry has to offer. Instead, the University of Technology Sydney and the Clean Energy Council have projected that 11,000 renewable energy jobs will be lost in the next two years because of this government's policy failures.
The people of the South Coast cannot afford to see those jobs lost. We need a government that is focused on grabbing the opportunities that renewables can provide. That's what I want to do and that's what I will continue to push for as the member for Gilmore. So I support the amendments Labor has proposed today and I hope the government will see sense and allow the CEFC to continue doing what it was created to do: support and encourage renewables.
As I begin, I should take the opportunity to inform the member for Gilmore that it was no less than Greg Combet, the minister, that introduced the Clean Energy Finance Corporation in 2012. In his second reading speech he said 'conventional gas … may technically be eligible for funding as a low-emissions technology'. The CEFC can already invest in gas projects meeting the existing definition and the investments were approved under the previous Labor government, so it's not monumental news. The member for Gilmore says it should do what it was intended to do, and it's quite clear from Greg Combet's comments that it was intended to target low-emissions generation.
There a number of things about this bill that make sense. There's the billion dollars supporting the government's push to keep moving down the path of renewable energy. I come from South Australia. I see the member for Hindmarsh sitting there, and he will be aware that South Australia is more than 50 per cent powered now in our electricity grid by renewable energy. And it's an interesting thing. It has put downward pressure on our prices. We were in a world of pain three or four years ago with a wholesale price that was tipping over $100 a megawatt on a regular basis. We've now come down to roughly half that, and those savings are trickling through to the consumer and, as the old contracts expire, I expect those consumer costs to come down lower.
The reason that has happened is that we've had a major extra build of renewable energy in South Australia and it comes at a time when the LRET has expired for new projects. If you're putting in a new solar or wind project at the moment, you cannot expect any taxpayer subsidy. So, it's interesting that, despite what the member for Gilmore said, projects are under construction in my electorate at the moment. There are another 700 megawatts actually under construction and probably that much again which has already been approved. It's showing that the market has decided that this is the way to generate electricity.
But of course when renewable energy is built, there is an enabler, and the enablement to go to renewable energy is that you have continuity of supply, that you can provide backup, that you can confirm that generation. That can come from a number of sources. In the eastern states a lot of it comes from coal-fired power stations. In South Australia, that inertia and ability to back up comes from gas. But the further we go along the slide of producing more renewable energy, more intermittent energy—let's say, predominantly from wind and solar—the more you need the capacity to provide electricity when they are not generating.
There's been some investment in batteries. There's going to be an expansion of the Hornsdale battery, which was supported by the Clean Energy Finance Corporation. But those who understand electricity know that batteries are excellent when it comes to frequency modulation but completely unviable if you want to store a whole bus load of energy, when you need to run a power grid for five, six or eight hours because your generators are not working. They're probably 10 times the competitive price. We are looking at pumped hydro projects in South Australia. There were three proposals. The one that I think probably has the inside running at the moment is at the Beetaloo reservoir, up near Port Pirie. But the most important thing we have at the moment to backfill those dead spots is gas.
There are two types of gas-fired power stations. There is combined cycle. That is the most efficient, but it takes a while to crank up. Then there are peaking stations. Basically they're jet motors, and you can flick them on in about a minute. If you are to build more renewable energy you need more of something to fill the gaps, and at this stage in Australia the most obvious thing to fill those gaps is gas. It can sit there as long as necessary, until it's needed, and then be switched on almost instantly. As for those people who think that somehow we're going to magically move to a 100 per cent renewable world, unless they've got some amazing, cheap storage technology tucked in their portfolio that they're not telling the whole world about, gas is going to play that part for a long, long time into the future. And if we are to expand wind generation and solar generation then gas will play an even more important part. It may not consume more gas overall, but there will need to be more plants built to provide that bolt of electricity when it is needed.
In South Australia we now have over 2,000 megawatts of wind energy nameplate capacity—that probably produces energy at about 35 per cent efficiency—and 1,681 megawatts of that is in Grey. I make the point just to demonstrate the facts that I've been giving to you about the ability to back up. AEMO regulates South Australian wind energy to a maximum of 1,200 megawatts. There's 2,038 megawatts installed, but it is regulated to a maximum of 1,200 megawatts. At an emergency level, the companies can request to go to 1,300. So when we get a windy day I can drive around my electorate and see wind generators that are actually turned off. The reason AEMO stipulate that is that they know that, after that point, the grid lacks inertia and it becomes unstable. That is why you need the gas backup—to firm up that renewable energy. As I said, it could be pumped hydro or it could be a number of things, but it is interesting that AEMO have already recognised the problem. In an economical sense, it surprises me a little that the generation building continues in South Australia. I can only assume it's on the back of a South Australian government commitment to build a new interconnector through to New South Wales and they anticipate selling energy into that market in the not-too-distant future.
Much is made of Australia's commitment to lowering the CO2 levels in the world—to climate change, if you like. I grow very weary of the criticism, because it doesn't stack up. In the year to March 2020, a total of 528 megatonnes of CO2 was emitted in Australia. That's down 1.4 per cent on the previous year, or 7.7 million tonnes. That is a decline that has continued over some years. It's primarily coming from renewable electricity, as I've been talking about—7.6 million tonnes—and four million tonnes comes from agriculture. Interestingly enough, there is a rise in the amount of CO2 emissions which are attributed to Australia through our energy export industries.
That is something that I wish to get on to now, but, just before I do, I will make this point. Per capita, we in Australia are now down by 42.9 per cent on our 1990 levels, and in emissions intensity we are down 64.2 per cent on our 1990 levels. I raise that point with interest because, as I read only the other day, when China says, 'Our emissions intensity is down by a considerable amount,' the world applauds. But, when we are down by 64.2 per cent, those on the other side of the chamber say that we're not doing anything! It's a preposterous argument.
Having said that, I really want to get on to the international accounting mechanisms that apply to carbon emissions. I make the point here that, in my electorate of Grey, I have the biggest uranium mine in the world. When we mine uranium—when BHP mines uranium and converts it into yellowcake and sends it to other countries in the world, because of course we don't use it for electrical generation—those emissions incurred in extracting and refining it are actually sitting on Australia's debit sheet. So, when we burn diesel or use electricity to mine and create yellowcake and send it to Japan or to India—well, let's hope more to India—or to other countries around the world to use for generation, they get perfectly clean, no-CO2-emissions energy out of that deal and we wear the CO2 cost.
Likewise, with gas, it's even more interesting. We are the world's biggest gas exporter. But when we turn natural gas into LNG it requires us to use 30 per cent of the energy of the gas to do so, and that 30 per cent of energy that we use is an Australian debit when it comes to CO2 emissions. But the country that receives it is actually given great credit, because they are reducing their CO2 emissions because they're no longer burning coal.
That is an accounting mechanism which is clearly not honest. If an accounting mechanism were to be properly honest, it would work as the GST works. The CO2 emissions would be embedded in the product to the point where it comes to the consumer. This is a very important point. As long as Australia is a major energy exporter and wears the emissions for other countries, it is distorting policy right around the world. It is the kind of policy that will encourage other countries to keep using gas and keep using coal because the emissions are partially hidden—they're hidden on Australia's balance sheet. It is a complete error. If we were to wash out those emissions emitted on other people's behalf, Australia would not be in that top echelon of emissions per capita. And that's quite an important point.
I say, about this accounting mechanism, that it was designed by Europeans for Europeans. It's dishonest. They have used it to export their manufacturing industry to China and to hide their emissions under that mechanism. It is completely dishonest. It is nothing like sophisticated. It is penalising countries around the world that provide energy for others. And there can be nothing more obvious on that than the uranium industry, where we get absolutely no benefit in terms of energy but we wear the debit side, or the gas industry, where we get no benefit out of that gas we export in terms of energy. We get a financial benefit, but we get no benefit in terms of energy. But we wear the debits on behalf of the other countries. Until that is fixed, we are not likely to get sensible policy around the world, as these other countries hide their emissions on other people's balance sheets. Much of it, at the moment, is hidden in China, where of course they don't recognise the fact that they will meet global emissions; they are talking about intensity. I told you about intensity before. Our intensity levels dropped by 64 per cent, but no-one pats us on the back; they just say we're sitters. It's a crazy place. It needs reform.
But this bill that we are speaking about today is an obvious step for Australia. It will increase the amount of clean energy available to Australia. It's right that it should expand and include those enabling technologies that will enable us to get to an even higher rate of renewable energy.
I rise to speak on the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020. The CEFC is a statutory body administering a fund dedicated to investing in clean energy, and it has been so vitally important to date in the small amount of reductions we have managed to achieve.
I can't commence today without being a little astounded by some of the allegations that are made in this chamber, and it does reinforce for me the need for a fact check body on allegations that get made, especially in terms of statistics. There are very clear facts about where our emissions are going, and they are not going sufficiently in the right direction.
The CEFC is very important in supporting the objectives and supporting our emissions reduction and our transition to clean energy—in particular the Renewable Energy Target, which sadly has not been updated or renewed. It has driven a huge amount of the investment we've seen in renewables in Australia. The CEFC has been helpful in catalysing and leveraging investment in commercialisation and deployment of renewable energy and the low-emissions and energy-efficiency technologies necessary for Australia to transition to a low-carbon economy. The CEFC has been incredibly successful in its mission. It has leveraged over $27.3 billion in private capital, financed over 18,000 small-scale projects and abated emissions by almost 260 megatonnes of carbon dioxide.
Project developers in Warringah have been supported by the CEFC. Manly's Solar Beach is a collective of renewable energy developers based in Manly, in Warringah. Solar Choice, Edify Energy and Wirsol were in a consortium that variously originated, financed and developed the 57-megawatt Whitsunday Solar Farm, north of Collinsville; the 57-megawatt Hamilton Solar Farm, also north of Collinsville; and the Gannawarra Solar Farm, in Victoria. All three received finance from the CEFC, totalling $77 million, and the CEFC committed to a debt facility to support the projects.
It is such an important body and must be maintained and not impacted by this legislation. I support the CEFC. It will continue to play an essential role in our transition to net zero by 2050, if we are going to achieve net zero—and we absolutely must achieve it; the alternative doesn't bear considering. We heard in Senate inquiries that the BOM, the Bureau of Meteorology, has us on track for over 3.4 degrees of warming in the world and up to 4.3 in Australia. That should be the element of concern to members of this place: what their legacy will be and what environment their children and grandchildren will live in. Most members of this place are of an age that means they won't have to bear the consequences. If we are going to reduce emissions, we need to make sure bodies like the CEFC have the full capacity to do so. So I support the injection of more funds into the CEFC.
However, there are very clear concerns about the provisions in this bill. This bill amends the CEFC Act to establish the Grid Reliability Fund. The fund will be administered by the CEFC to support investments in new energy generation, storage and transmission infrastructure, including eligible projects short-listed under the Underwriting New Generation Investments, or UNGI, program. I note that UNGI is currently under audit by the Auditor-General. This bill establishes the Grid Reliability Fund Special Account. It appropriates about $1 billion and allows for appropriations to be increased through regulation. The GRF will enable the CEFC to invest in additional energy generation, storage, transmission and distribution infrastructure and grid-stabilising technologies where it has had limited ability to do so in the past. So the government stresses that the GRF, the Grid Reliability Fund, is separate from the existing funding of the CEFC and that this new fund is needed because of the current CEFC funding; the corporation cannot invest in supporting infrastructure such as transmission or condensers. In general, there would be sense behind this, except that there is clearly an attempt to dilute the focus on clean energy and expand the mandate of the CEFC through this Grid Reliability Fund to support gas and fossil fuels. There are serious issues when it comes to expanding the mandate of the CEFC—transmission and synchronous condensers are one thing, but then there's clearly the extension of gas.
The GRF is purportedly to fund the Underwriting New Generation Investments, or the UNGI, program. Many will say, 'What exactly is that?' According to the government, the UNGI was established to support firm generation capacity and increase competition. We know six renewable pumped hydro projects, five gas projects and one coal upgrade project have been short listed under the UNGI. In December 2019, the government announced that key initial support terms had been agreed to underwrite two projects: APA Group's proposal for a 220-megawatt gas generator in Dandenong, Victoria; and Quinbrook's proposed 132-megawatt gas generator in Gatton, Queensland—noting I'm only hearing of gas projects.
The UNGI program has had problems from the beginning. It has no guidelines—it had none and still doesn't—and no criteria for assessment of support. The program's development and implementation followed no clear process and had a flawed selection process. Despite these issues, the government short-listed projects, made initial agreements, advanced detailed negotiations with proponents and entered into memorandums of understanding with the New South Wales government to support projects under the UNGI, all whilst there was no actual clear underlying legislation. In June, I wrote to the Auditor-General on these issues, and it was accepted for an audit in this year's work program. In the current structure of this bill, it is unclear how exactly the UNGI will be supported by the CEFC.
Under the CEFC Act the minister can set a broad investment mandate in the regulations but cannot tell the CEFC's board to invest in this suite of projects. It's important to emphasise that the CEFC board is independent of the minister. So how will the projects be funded? Will the minister provide the short list of projects to the board? This is not in line with the section of the CEFC Act which states that the responsible minister must not give a direction 'that has the purpose or has or is likely to have the effect of directly or indirectly requiring the board to or not to make a particular investment'. So there are really big questions here as to what exactly the government and the minister are seeking to do through this Grid Reliability Fund, in particular in relation to the UNGI program.
But there are greater problems with this bill. By changing the definition of low emissions, the government is unnecessarily changing the CEFC's original mandate to allow for investment in gas generation. Gas features heavily in the explanatory memorandum, and I've only had to sit in this place to listen to the members of the government all talk about the purpose being gas. Why? The Morrison government is pressing on with its fiction that more gas is needed, despite the urgent need for Australia and the world to transition away from fossil fuels. There is no reason for this. We do not need more gas or new gas. The Australian Energy Market Operator, the forecaster and planner of the grid, the actual expert in the field, was clear in this year's integrated system plan—and I hope all members in this place have read the integrated system plan—that only existing gas generation would be required this decade and that any new storage required would be met by batteries and hydrogen. It does beg the question: what is the evidence being relied upon to support this idea that vast amounts of new gas are required?
Even the Petroleum Economist publication has come out against an expansion in the use of gas, saying that new gas-fired generation is unlikely to be economically viable compared with alternative options such as battery storage and pumped hydro, further stating that: 'Increasing Australia's gas consumption may create future import dependence in the east of the country. Renewable power projects offer the clearest route to elevating the risk of greater exposure to international gas market volatility.' So new gas is also not consistent with Australia's commitment to limiting warming, and we should be very clear that gas is a fossil fuel and rebuff any assertions by this government that it has a place in this transition or is somehow playing a part in meeting our obligation to reduce emissions to ensure we arrest the global warming that is happening.
I am concerned that the government is choosing ad hoc interventions over a cohesive national climate and energy framework. The bill is just an extension of the government's fragmented approach to climate and energy policy. It was made clear in the inquiry into the climate change bills that the desire from all sectors—from the private sector, the Business Council, industry, manufacturers, health, planners, builders, architects, the unions—is a cohesive framework that spans all sectors of Australian society and addresses all the gaps we have in the system. Interventions like the one-gigawatt gas generator to replace Liddell, or the threat of it, or the six gas projects listed for funding under UNGI are not warranted and will do nothing but disrupt the market. There will be no shortfall of generation; the only shortfall could possibly be caused by this government's anti-market rhetoric.
If we set the rules through a national climate and energy policy, the market will drive any new generation required. Whilst this government is talking about a gas fired recovery, states like New South Wales have passed legislation enacting an energy transition framework to move from coal to renewables and pumped hydro. They are attracting millions in capital hungry for a jurisdiction with a sensible policy. The inquiry into the climate change bills has made it very clear: we risk losing billions in investment if we continue down this path.
Just a couple of weeks ago, a $2.4 billion, 1,200-megawatt battery was announced by CEP Energy for Kurri Kurri, in the Hunter Valley. This would be the world's largest—and conspicuously close to the proposed one-gigawatt gas fired generation Liddell replacement the government talks of. The proponent said the New South Wales clean energy road map that passed the state's parliament last year had given the market confidence—I repeat that: had given the market confidence—because it was legislated in the New South Wales government to invest in renewable generation supported by large battery storage, without subsidies. New South Wales is getting on with the transition with sensible policy frameworks. It is long past time that the Commonwealth government did so too.
Really, what this government should be doing is providing investment certainty with a national climate and energy policy rather than interfering with these ad hoc policy-on-the-run interventions. It needs to set the rules, and the market will drive any new generation required. I urge the government to remain consistent with their free-market principles and actually apply them.
One final point: Australia's heading for a carbon crunch, whether we like it or not. It's time to get serious. Seventy per cent of our two-way trade is now under net zero goals. The European Union and the UK are both putting emissions at the centre of their free trade agreement negotiations; even the United States is contemplating carbon border tariffs on recalcitrant nations. If we are to avoid the worst of these trade penalties, we need to get serious about reducing emissions—no more incrementalising and no more delays.
The government must sign up to net zero with no qualifiers or carve-outs. In that light, the government must commit to no further expansion in fossil fuel generation and make serious attempts to decarbonise not just the energy sector but transport, industry and agriculture. My support for this bill—well, I have many issues, as I've outlined, but there are amendments that I intend to make which will remove the prohibition in this bill against the CEFC making payments to ARENA. This will also make the Grid Reliability Fund consistent with the rest of the portfolio. Of course we need to ensure that any investment is made consistent with the overall goal of reaching net zero as fast as possible—the Prime Minister's own words—and I would say no later than 2050. If the government is serious about getting there as soon as possible, then the actions of the government agencies—including the CEFC—must be concentrated on that goal.
I'm all for increasing funding to the CEFC, provided these are not changes to facilitate investments in fossil fuels. If the government needs to seriously think about where it is heading with this policy, let's be very clear: we have to get to net zero as soon as possible. The consequences don't bear thinking about. We need to pull all available levers to reduce emissions, and that means we cannot be supporting the expansion of fossil fuels.
I appreciate the opportunity to speak on the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020 and to listen to my colleagues and their contributions. I rise today in support of the $1 billion Grid Reliability Fund. I've often spoken in this place about the importance of lowering electricity prices for Australians. In that regard, it was a long time ago that I indicated that my attitude was one of complete technological agnosticism. It's not the nature of the technology I'm worried about but the outcome, measured in price. Lower priced electricity should be the goal for everyone in this place, no matter what side of politics they represent: affordable, reliable electricity.
Lower energy prices not only lower the cost of living for everyday Australians but make a range of industries that are poised for growth competitive. Our government understands that the benefits of lower electricity prices are shared across the whole economy. For individual homeowners, lower prices allow them to purchase more goods and services. For businesses, they decrease the cost of doing business. That encourages investment, investment encourages expansion, and expansion leads to more Australians in employment.
Whether it's irrigators in the Riverland, winemakers in the Barossa, timber millers in the south-east or anyone working at the myriad of abattoirs throughout my electorate, low energy prices are good for them, good for their bosses and good for our communities. This bill is about employees and employers and making sure that all of them can keep more of the money they earn to improve the standards of living they enjoy. To do this, the $1 billion Grid Reliability Fund provides funding to support private investment in storage and transmission infrastructure to ensure that the large deployment of renewable energy is integrated and backed up.
Since 2017, $30 billion has been invested in renewable energy, with new wind and solar being deployed 10 times faster per person than the global average and four times faster per person than in Europe, China, Japan and the US. It's worth repeating: 10 times faster per person than the global average and four times faster per person than in comparable economies in Europe, China, Japan and the US. With one in four Australian households utilising solar panels to meet part of their energy needs, it's apparent there's no shortage of renewable investment, and it is tipped to only continue in the future, with Australia's share of wind and solar in electricity grids being double the global average. These high levels of renewable energy sources need to be supported by investment in dispatchable energy generation to support the increased intermittent generation.
I need to emphasise that this Grid Reliability Fund does not hinder renewables or other intermittent power sources but supports flexible backup generation and storage—including gas, pumped hydro and batteries—to stabilise the grid. Eligible investments include energy storage such as pumped hydro, batteries, transmission and distribution infrastructure, grid-stabilising technologies and many other projects identified in the government's Underwriting New Generation Investments program.
In South Australia, this could help fund projects to improve transmission of renewables, such as the SA to New South Wales interconnector. This project would save South Australians around $100 a year, not to mention the hundreds of Australian jobs that will be supported during its creation. This interconnector will help to prevent the blackouts that previously plagued South Australia's ability to operate. Our government has already had much success. It has a proven track record in reducing energy prices, with seven consecutive quarters of energy price reductions—seven successive quarters! The wholesale electricity price has fallen for 13 months now and is at its lowest level in six years. The wholesale price makes up a third of residential electricity bills, and, with this grid, we expect prices to drop further.
Our practical approach to reducing emissions and energy prices will support our economic recovery from COVID-19. It will work in conjunction with other government programs, such as the government's Technology Investment Roadmap. The Technology Investment Roadmap is about reducing emissions and the cost of energy through investment, not taxes. It's about creating more industries, not destroying the ones we have, as some opposite might suggest. Our plan will achieve emissions and price reductions, and, with the benefit of the Grid Reliability Fund, it will shore up energy security.
Energy prices affect almost every enterprise in our country. Manufacturing is one industry that is particularly affected by price increases. In my electorate of Barker we have a proud history of value-adding to our already exceptional produce. Instead of outsourcing our premium produce, we keep much of the process local, particularly fruit processing. This includes the many wineries in the Barossa, Coonawarra and the Riverland regions; the dairy producers in the south-east; and the meat processors—which I've mentioned already—including the Thomas Foods facility at Murray Bridge, which suffered catastrophic loss some three years ago, JBS at Bordertown and, of course, Teys in Naracoorte. This value-adding must be supported, and one key factor in that is reliable and affordable energy prices. Manufacturers can't sustain blackouts or internationally uncompetitive energy price spikes, which can see a weakening of our domestic economy and more fragility around jobs. In a time when we're recovering from COVID-19, that simply can't be the case. That's why we're investing in our Manufacturing Modernisation Fund. Combined with lower energy costs and improved stability, this will allow the scaling up of successful manufacturing operations to support our ability to build on our way out of this pandemic.
All too often people bemoan the loss of manufacturing jobs. I'm here to indicate that Barker enjoys the title of the food manufacturing capital of Australia. In terms of food and grocery FTEs, there are more per capita in the electorate of Barker than in any other division in this place. As we enter into free trade agreements with other nations around the world and as more nations around the world look to our clean and green premium products, we can only see that accelerate. It's something I'd certainly like to see.
Having spoken about the positives, let me talk about one of the negatives we've experienced in South Australia. As a South Australian, I experienced firsthand the effects of the blackout. On Wednesday 28 September 2016, I was one of 1.7 million South Australians who were thrust into darkness. I happened to be at the Murray Bridge Hotel, sitting at the front bar and talking to a constituent after a day on the hustings. We just laughed and continued to drink our beer, thinking that it was a short-term blackout. But then I began getting the rolling news via Facebook and other places. Who knew that we were looking at a blackout that would run for more than 24 hours? I received countless calls from constituents who were upset and angry. It then moved to fear and real concern. I remember thinking about all of the consequences I hadn't thought about, in terms of electricity reliability. It was a fair way into the blackout—it might have been 18 hours or so—when I got a phone call from a dairy farmer who said, 'Tony, we've got an animal health crisis on our hands.' I hadn't thought about dairy farmers up to that point, but of course they had a crisis! They had to milk their cows, and, if they couldn't, there would have been an animal health issue. They scrambled as quickly as they could to get generators. But I've got dairy farms in my electorate that milk 4,000 cows three times a day. That's a pretty big genset. That was incredibly difficult.
I just provide that anecdotal example of one of the challenges when you're up against the uncertainty of an unreliable electricity grid. Those opposite say it was a storm. I've heard that claim a number of times. Anyone would think that was the first storm we've ever had in this nation. We're a broad continent, a nation with a long history. We have transmission lines that traverse this continent of ours. Those opposite would have you believe this was the very first storm ever to occur, because this was the very first blackout of this nature. That's not true. Yes, there was an issue with extreme weather, no doubt. But the grid was so fragile it didn't have the ability to reboot, because it was overly reliant on intermittent energy. The member for Hindmarsh is leaving the chamber. I was hoping he would stay. I wanted to congratulate him on his time as shadow minister in this portfolio and wish him well with his future one, but I haven't been given that opportunity.
The blackouts affected everyone—businesses big and small. We have dealt with crises much more significant since then, but, at the time, I remember thinking it was about as bad as it can get. How can we lose power for 24 hours? How can I have constituents ringing me scared because they were driving through Adelaide in unfamiliar suburbs and the state had been plunged into darkness?
The Grid Reliability Fund will support our continued efforts to improve the reliability of the electricity market. It's about ensuring that not only do we not experience those blackouts again but businesses can plan for the future without it being an active consideration in their risk profile. I was speaking to executives at BHP after that blackout experience. They were discussing the likelihood of further blackouts, the measures they'd need to take and the cost of those blackouts. To be honest, it was affecting the forward projections of investment decisions. People were saying, 'Why would you invest in South Australia when it has the least reliable electricity grid in the country?'
In the time I've got left I want to give a shout-out to my good friend and colleague the federal minister for energy, Angus Taylor, who's done an exceptional job at taking this debate where it needs to go—practical, sensible solutions for a future where, inevitably, we will live in a low-carbon environment but in which we need affordable and reliable energy that doesn't see us effectively throw the jobs of Australian workers on the altar of ideology. We understand what's required from the basic utilities that power our nation—affordable, reliable energy.
I've said a bit about South Australia. I'm a proud South Australian. Of course, we experienced that horrible blackout caused by the fragility of the energy grid in South Australia and the overly heavy reliance on intermittent energy generators. But I want to reflect finally on the longest-serving South Australian Premier, Sir Thomas Playford. Sir Thomas was a man of great stature. He held the premiership for a very long time, aided, I think we can concede, by a gerrymander. He not only wired up regional South Australia; he built an economy on affordable—in that case, cheap—electricity. It turned communities like Millicent, in the south-east, from rural towns into rural cities, attracting investment on the back of that. I mention it only for this reason: if Sir Thomas Playford, in the forties and fifties, knew the importance of affordable electricity and if he could build a state on the back of it then my message to everyone in this place is: please don't throw that away. Don't dismiss how important that is. Affordable electricity is one of our competitive advantages; never give it up. (Time expired)
It's a pleasure to follow the member for Barker and reflect on his contribution and his generous farewell to the member for Hindmarsh's portfolio. I'll just concentrate on a point that is well known: the member for Barker told his preselectors in 2013 he'd be a minister within a year. So far I think he's still on the back bench. So for him—
I will. I note you didn't ask that of the member for Barker when he talked about the member for Hindmarsh, but I'll move to the substance of the bill.
The substance of the bill is the coalition yet again trying to make the Clean Energy Finance Corporation a political tool for their political effort and their ideological wars. Let's reflect: for the first three years of the government their official policy was to abolish the Clean Energy Finance Corporation. Through their first Prime Minister and a half, their goal was to abolish the Clean Energy Finance Corporation. So the hide of the coalition government now to claim credit for the achievements of the CEFC and claim they are improving it through this bill is remarkable. It shows the utter hypocrisy of the government. They've lost that battle because they've realised they don't have the political support in the parliament or, quite frankly, the public support to abolish a very important national institution. They are now trying to play wedge politics with it. They're trying to play wedge politics with the CEFC through many of the amendments that this bill seeks to make.
I'll first touch on the amendments that we support and the endeavours that are worthy in this bill. We support expanding the ability of the CEFC to invest in storage. We support the increase in the ability of the CEFC to invest in transmission. Both of those initiatives are worthy and necessary as we modernise the grid, a grid that so far is stuck in the 20th century. We support them because they're our policy. I know the Leader of the Opposition, in his remarks, talked about our visionary $20 billion Rewiring the Nation initiative, announced in the budget response last year. This is an initiative that will modernise the grid, increase reliability and allow further investment in low-emissions technology in this country. It will also lower power prices and increase demand for Australian exports like steel, and it will mandate the use of Australian workers. So it's a worthy initiative that is really important.
However, the element of this amendment legislation that we can't support is the opening up of the CEFC to investment in gas-fired generation. Firstly, the minister is wrong. The minister is being misleading when he claims that the current mandate for the CEFC allows investment in gas. My response is twofold. If it allows investment in gas, why did he put out media releases saying this amendment will allow for investment in gas? So the minister has contradicted himself, firstly. Secondly, the facts are these. The investment mandate of the CEFC says it can only support investment in new generation that is at an emissions intensity of no more than 50 per cent of the grid. The emissions intensity of the National Electricity Market at the moment is 0.72—that is, for every megawatt of power, 720 kilograms of carbon dioxide equivalent are produced. The emissions intensity of combined cycle gas is about 0.4—so 400 kilos of CO2 per megawatt hours—and for open cycle, at best, it's 600 kilos of CO2. Clearly for anyone who has any mathematical ability, which doesn't include the minister for energy, half of 0.72 is 0.36. So no conventional gas technology is eligible for investment under the CEFC right now.
This amendment that they're proposing, which would have the effect of removing that 50 per cent mandate and saying that the CEFC can invest in new generation that underpins grid reliability and low emissions, is clearly opening up the Clean Energy Finance Corporation to support gas-fired power. I'll talk about the role of gas in a minute; it does have an important role. But the implications of this amendment are that, for example, the minister could direct the CEFC to invest in a new gas-fired power station that has the emissions intensity of, say, the Hallett Power Station in South Australia, which has an emissions intensity of 1.17, meaning that it emits 1,200 kilograms of carbon dioxide per megawatt hour, or the Dry Creek gas turbine station in South Australia, which emits 1,342 kilograms of CO2 per megawatt hour. I should note that the emissions intensity of the Dry Creek gas turbine station is actually greater than that of the most emissions-intensive brown coal power station in this country, which is Yallourn Power Station. Let me repeat that. If this amendment by the government to open up gas in the way they've configured it is successful, we could have the Clean Energy Finance Corporation, whose goal is to support the deployment of new clean energy technologies, supporting a gas-fired power station that emits more carbon dioxide per megawatt hour than Yallourn Power Station. Is that really the point of the Clean Energy Finance Corporation? Is that really what we should be aspiring to?
The truth is that this bill is all about wedge politics by the government. They've failed on their wedge politics about coal, and I'll return to that in anticipation of the contribution of the member for New England, who will speak after me. They've moved on from coal because they've got huge divisions in their party room between the dinosaurs in the National Party and people like the member for Hughes versus the so-called modern Liberals or moderate Liberals. I forget what they're called. I think the member for Brisbane might be associated with them in a loose way. They've got huge divisions there, and they know that they're on a loser because the vast majority of Australian people support investment in clean energy. So they've moved from wedge politics on coal to wedge politics on gas.
Gas has a huge role in the current NEM. Gas plays a vital role in firming the grid. I'm proud that, in my electorate, I've got Colongra Power Station, the largest gas-fired power station in New South Wales. It plays a vital role as a peaker. It plays a vital role in firming the grid when it's under stress because some of our ageing coal-fired power stations have gone out due to heat or other mechanical breakdowns or when renewable energy is intermittent. But, last year, Colongra Power Station operated for 54 hours all year. It was a critical 54 hours. It was an essential 54 hours, but it operated for 54 hours. And gas generation in the NEM last year constituted seven per cent of total NEM output, so it plays a vital role in firming, and it will play that role for the foreseeable future, complemented by other firming technologies, whether that's pumped hydro—Snowy Hydro 2.0 or the other forms—or batteries which are coming in and becoming more competitive. And ignore all this rubbish that says the Hornsdale battery can only power Tomago Power Station for 12 minutes. Batteries are getting larger, and they're complementing pumped hydro for short-term firming, and they're coming down in price significantly. For example, the Australian Energy Market Operator has said that, in the near future, for gas-fired peakers to be competitive with batteries, we would need a gas price in this country of $4 a gigajoule. It's at $10 a gigajoule at the moment, and I'm not seeing anyone suggesting we'll get back to $4. So gas can't compete with batteries for firming. Batteries are increasing in capacity, so they will be able to run longer to plug the gaps, supported by pumped hydro.
So this comes back to the Prime Minister's ultimate wedge politics. He went up to Kurri in my neck of the woods and announced that the government would support a 1,000 megawatt gas-fired power station. This was, I think, energy policy No. 24 or 25 of this government—and that's 24 or 25 over seven years—but things changed very quickly. We got the next energy policy within, I think, two days. It then became clear that it wasn't going to be a 1,000 megawatt gas-fired power station; it was going to be a 200 megawatt gas-fired power station. Meanwhile, all of these interventions were actually turning off private sector investors who were actually making investment plans. AGL has a plan for a new gas-fired power station at Tomago which they obviously put on hold when they saw the 25th energy policy announcement by the Prime Minister. This is just wedge politics that is actually destabilising energy policy in this country, because what we need is a plan. We need a plan because renewable energy is coming more and more into the grid; we need a plan around transmission; we need a plan around storage and we need a plan around generation, not just ad hoc announcements by a government addicted to wedge politics.
That brings me to the master of wedge politics in this place, the member for New England, and his new announcement. The thing I love about the member for New England is: as often as he loves to wedge Labor, he likes to wedge his own side; he's an equal opportunity wedger. I'm very confident that he's going to give me a free character assessment after my contribution, and that's fine, but I'll just say this. I'm grounded in reality. I face my electors every day and I talk to them about what's true. I don't live in an alternative reality—'Joyceland' or whatever it's called—which is a return to the 1950s and which is not grounded in economics at all.
Let's refer to the member for New England's amendment to allow so-called 'high-efficiency low-emissions coal-fired power' into the grid. The problem with his amendment—and there are multiple problems—is that it's just completely impractical. It argues that we should support HELE in this country if it has an emissions intensity of 80 per cent or lower of NEM intensity. The problem with that is that the least emissions-intensive HELE plant in the world runs at 670 kilograms of CO2 per megawatt hour. To hit his 80 per cent goal, he would need to find a HELE plant at 576 kilograms of CO2 per megawatt hour. His amendment is already contradicted by the physical reality of the NEM. We might talk about carbon capture and storage accompanying the HELE, and that's the way of the future, but the truth is: this government cut funding for CCS. This government abolished the CCS flagship fund that Labor put in place that was there to develop the technology of CCS which is still a long way off and is still not economical. So for this party or the coalition to talk about CCS as the future when they abolished a CCS flagship is utter hypocrisy.
The truth is: they'll talk about power prices and the need to lower power prices—and we do need to do that in this country because this government has presided over record power price increases—but what they're arguing for is a recipe for higher power prices. The market has spoken and the truth is: the cheapest form of new power in this country is renewable energy—wind and solar made completely reliable, 100 per cent reliable, through a combination of pumped hydro and batteries. The price of that combination, which firms up renewable energy, is around $75 a megawatt hour—completely reliable at $75 a megawatt hour. New coal at best will cost $120 to $150 a megawatt hour. New coal with CCS, if it actually exists, is north of $300 a megawatt hour. If the member for New England's bizarre fifties utopia were ever to be adopted in this country, he would be responsible for doubling power prices—not reducing but doubling power prices.
In my last two minutes I'm going to reflect on my view about coal, because I'm guessing it's going to get touched on very shortly. I'm proud to represent a coalmining region. I'm proud to represent a region that was built on the wealth of coal—the coal that industrialised this country, the coal that's still being dug up by miners who fight every day against companies intent on slashing their wages. They're miners who need reform to labour hire to give them decent wages—something the member for New England goes missing about. When it's talking about the beauty of coal, he's there; when it's talking about improving the wages of coalminers, he's nowhere to be seen. I've never heard him talk about the return of black lung to the industry—no, of course not, because he doesn't care about workers; he cares about headlines and being mates with Yancoal and Whitehaven.
The truth is: coal-fired power generation in this country has lost the economic race. It's not about the environment; it has lost the economic race. We should keep exporting it while there's demand. My strong view is that the last tonne of coal consumed in this world should be Australian coal, and we should continue to export it as long as there's global demand for it.
I'm proud of the industry. I'm proud of the contribution miners make every day in my area. My neighbour's a coalminer. My kids go to school with coalminers' kids. I go to the footy with coalminers. I'm proud of their contribution. I want the last tonne of coal mined on this planet to be Australian coal. And, while that's being mined, I will defend the industrial rights of workers. I will argue for equal wages for equal work. I will argue for better health and safety to make sure that we abolish black lung. But I won't argue for higher power prices in this country, which is what the member for New England and the government are arguing for, through their ideological obsession with coal-fired generation and gas-fired generation. I stand with coalminers. I stand with the export industry. I stand for a strong future for them. But I also stand with my consumers, my households, who want lower power prices and cleaning up of the grid.
I will stand by to enjoy the normal incoherence from the member for New England, but I can guarantee you it won't be grounded in economic reality.
You heard it, didn't you, in Shortland? Your member talked about the last part of coal because he's talking about the last part of your jobs. So I say to the people of Warners Bay: the member for Shortland is a fake. I say to the people of Valentine: the member for Shortland is a fake. I say to the people of Cardiff: the member for Shortland wants to put you out of a job. And they know that too. That's why there was a 10 per cent swing against him and that's why the most recent polling says he's gone. It's all over for him. He doesn't even support Newcastle; he supports Parramatta. He's not even from the area. He was transported to the area.
What we are doing on behalf of the people of Shortland is showing, in this amendment, that we are unambiguous about their jobs, that we stand up for coalminers, that we stand up for coal-fired power, that we are willing to put our name to the paper and stand behind their jobs and their future, because the biggest issue for our nation—I hate to say it, but it's not climate change—is the pre-eminence of China as a growing superpower and our need to make this nation as strong as it possibly can be. Our biggest issue is to understand that, in the future, if we get a slide of American influence out from our region we have to make this nation as strong as it can possibly be.
We have to be very mindful of our situation compared to the situation in Europe or the situation in the Americas, because we live in a different part of the world. Anything we can do to make this nation stronger, to bring back its manufacturing, to bring back its capacity to be resilient enough to stand with the problems that may eventuate—if the course of events in the past is to be any sort of guide—means that we must have the capacity to have the cheapest and most reliable power we can possibly get. Australia had the cheapest power when it was coal-fired power, and now we have the dearest power in the OECD. I acknowledge that some of my colleagues will take umbrage at what I do, but the difference is, Member for Shortland, I'm prepared to do it. You're not. That is the precise difference. People out there want to see you stand behind their jobs.
We've got to make sure that we are prepared to sell this product to the rest of the world—and we are. Our nation's largest export is fossil fuels. It is not computers. It is not motor cars. It is not kitchen renovations. It is not agriculture. Our biggest export is fossil fuels. If we are going to say that we believe it is right and just export this to the rest of the world—as I do—surely it is logical that you would also produce the best and most efficient technology to use it and stand behind that product by saying: 'We will build it in Australia. We will show you how to use it best.' If it's not the advent of China's expanding power and pre-eminence, it's our debt. And we've got to have a strong economy to be able to repay it. We've got to make sure that we take every advantage we possibly can.
Look at what's happening now in our nation. The Altona fuel refinery's closing down. That leaves us with about two fuel refineries. Vales Point is no longer going into expansion. That is an issue. Liddell is closing down. We've had blackouts in Manly. We've had blackouts in Hunters Hill. Our power system is at an edge, and we have to break away from this quasi-religion that has possessed the place where you are not even allowed to talk. You're not even allowed to mention the word 'coal' in many instances. I have to say the member for Shortland's fallen into that trap, and his own people know it. Why do they know it? Because they have to live with the experience of power prices that are driven in many instances by a section of the community which has a lot more spare cash than the people in Kurri do, which has a lot more spare cash than the people in so many areas of the member for Shortland's electorate. They probably have a lot more spare cash than the people of Caves Beach.
These people want to make sure that we do the right thing by them, which is cheap and affordable power. In the past they had it, and now they don't. If we keep driving this agenda where we can't even discuss high-intensity low-emission coal-fired power but in the same breath out of the other side of your mouth say, 'But I believe in the coal industry', it looks like complete and utter hypocrisy. It looks like you're completely and utterly dodgy, and you're not philosophically correct. You can't say you support the coal industry but you don't support the usage of coal.
And when they say, 'Oh, well, other parts of the world aren't using it,' might I remind you that in the so-called transition by Japan, they're not transitioning out of coal; they're transitioning from old coal-fired power stations into high-intensity low-emission new coal-fired power stations as part of their plan in 30 years to transition. Even in China, where we export coal to, they're building right now in excess of 160 new coal-fired power stations.
We had a German delegation in our office. We're always told the Germans don't use it anymore. I asked the question—it's in the Hansardare you using coal-fired power? They said, 'We are refurbishing our brown coal-fired power stations.' So there are a lot of facts that are lost, and to comply with the tenets of a religion but to absolve yourself of the facts we have got to make sure that in a path to cleaner energy—which I have no problem with; it's logical—we put all the opportunities that are before us and we represent that in the bills that we vote for. I will be moving an amendment for high-intensity low-emission coal-fired power.
An opposition member interjecting—
And to take the interjection about the market: if the market decides they don't want to build one, well, they don't want to build one. That's their choice. If the market decides they don't want to build one they don't want to build one, but they've got to have that opportunity. And the member for Shortland is saying within this bill they can't. So that is the issue and it is still good to be able to stand at the very back of the chamber, like I did at the front, and stir these people up. The reason you get under your skin is because they know full well that it hurts at their home base. The people in their hometowns are saying, 'Why are you not standing behind my industry? Why are you not standing behind my house payments? Why are you not standing behind my job? Why are you not standing behind the cost of putting my kids through school? Why are you not standing behind my capacity to have the boat, the car, of my choice? Why are you forcing me into a lower paid job? Why is your religion driven by the inner suburbs of the major capitals when you used to be the labour party? When you lost the 'u', you lost me.' You no longer believe in the people who put you there, in the reason your party was created. You have stepped away from it.
Might I say that, of the more wily politicians who exist in this place, there is one who has smelt the breeze and he sits over there now. He used to sit down there. The member for Hunter. And the member for Hunter went home and realised that he probably wouldn't have a job unless he changed what he was saying. I'll say to you, Member for Shortland: you're going to lose your job. You're gone. We've done the polling on you. You're dead. You're gone. You're finished.
Mr Conroy interjecting—
Yes, we have. And I'll tell you: it's your own people. They don't want to vote against you but they feel they have to vote against you.