Monday, 22 February 2021
Australian Local Power Agency (Consequential Amendments) Bill 2021; Second Reading
That this bill be now read a second time.
The Australian Local Power Agency (Consequential Amendments) Bill 2021 makes a suite of amendments to existing clean energy legislation to enable ALPA to function effectively. In sum, it establishes ALPA as a sister agency to ARENA and the CEFC, allowing them to work as a trinity not only to drive investment in renewable energy but also to make sure that regional communities truly benefit from that investment. I commend the bill to the House and give my remaining time to the member for Warringah.
I second the bill and thank the member for Indi for these important bills, and I wholeheartedly welcome the opportunity to speak on them. We are in the middle of an unprecedented energy transition. Over 15 gigawatts of coal-fired power is retiring in the next two decades. The market has made it clear that the cheapest replacement is renewables and storage; it is not gas. This could be wind or solar, with pumped hydro, solar arrays on roofs and virtual powerpoints. As a result, distributed energy generation is flooding the national electricity market, opening up opportunities for new entrants.
But more can be done to ensure that the benefits and opportunities of this transition are spread to everyday Australians in towns throughout our regions. These bills will make sure that communities are at the heart of the energy transition, and it is so important. I know this because it is very much a focus in Warringah as well—not as regional an area as that of the member for Indi, but we still have a common focus. Community energy projects are energy projects that are initiated, developed, owned and operated by community members. In Warringah we've had the benefit of these kinds of projects. ClearSky Solar Investments are an award winning not-for-profit. They established an unlisted structure allowing private investors to finance solar installations across schools and businesses. ClearSky partnered with another not-for-profit, Pingala, to complete a community finance installation of rooftop solar for 4 Pines Brewing. They invited 4 Pines employees, friends and Northern Beaches locals to participate and make up an inclusive investor portfolio. They had so much interest that they had to draw names. The way it works is that 4 Pines pays for electricity consumed, with the proceeds returned to shareholders by a power purchase agreement of Smart Commercial Solar for a return of up to eight per cent on their investment.
In Warringah we're also supporting community energy projects in the regions. Solar Choice, a renewable energy developer based in Warringah, secured planning approval for a one-megawatt community solar farm in the Majura Valley in the ACT. This is in fact the largest community owned solar farm in Australia. It will have over 5,000 solar modules, will power approximately 250 homes and will abate 1,600 tonnes of CO2 every year. The benefits are obvious.
So, how do we get more of these projects going? We need to look overseas. Some jurisdictions are far ahead of us. We can see a community energy renewables boom occurring. We know it's possible with the right policy settings. We only have to look at examples like Denmark and Germany to see it working in practice in the field. Denmark has promoted community energy since the 1970s. As a result, 70 to 80 per cent of wind turbines are owned by the community. Since 2009 the Danish Renewable Energy Act has required new wind projects to be owned at least 20 per cent by local people. We could emulate that here with these bills. In Germany, 50 per cent of renewable energy generation is community owned. This is supported by generous feed-in tariffs, connection enablers and rules. They're remarkable figures and a testament to what is possible, and it is disappointing to see where Australia is at after 10 years of dysfunction and lack of real coherent policy around energy.
The Australian Local Power Agency Bill 2021 will establish a new Commonwealth agency dedicated to these kinds of community energy projects in regional Australia. It will build on the successful model of ARENA, and people in the regions will be assured that the current renewables boom will deliver to them. This bill is key to regional development which aims to encourage economically disadvantaged communities to improve their economic, social, cultural and environmental wellbeing. ALPA, the Australian Local Power Agency, will provide technical and financial resources to communities through local community energy hubs, 50 of which will be established around Australia. Large concessional and underwriting schemes will also be available for eligible mid-scale projects, bringing down the cost of projects and the risks. So there are clear benefits. Unfortunately, in Australia, with traditional energy projects there's been a lack of emphasis on local jobs and procurement. The profits of renewable developments have been going to energy companies and not always enough to the communities. So we need to change that and ensure there is local skill development, and these proposals go to the heart of this problem.
The policy costs just $50 million to the budget bottom line per annum, but that figure does not reflect the huge economic benefits that will spread through the regions. In Victoria, we've seen similar projects deliver a 13-fold return on investment. The local jobs, energy independence, financial security through lower power bills, and engineering ingenuity are an opportunity multiplier in these communities. On jobs in particular—and we hear a lot of that in this place—we know that, for every $1.5 million invested in renewables, almost eight jobs are created, compared to only 2.6 jobs in old energy production like coal or gas. There is no doubt that the future for these communities is in renewables.
The beauty of these kinds of projects is that the business model can be tailored to suit the needs of the community. Multiple types of models can be implemented. For example, a community investment model, a co-investment model and a philanthropic model all are possible. The community could decide that they would like a portion of the profits to go towards a local charitable cause or provide power to a homeless shelter for free. The opportunities are endless. The community could, alternatively, choose to provide important grid-balancing services like frequency and voltage control and system inertia to the grid. It is entirely flexible.
I presented the climate change bills to the parliament last November, and they've been widely endorsed across all sectors of our society. The bills seek to make regional development a core consideration of any emissions reductions and adaptation plans prepared by the government, and that will ensure the regions are included in any transition. I see the climate change bills working harmoniously with the Australian Local Power Agency in developing the regions. I see the agency enacting core parts of the plans required by the climate change bills. Alongside the CEFC and ARENA, ALPA will finance the future of our regional communities.
These bills put community at the heart of energy transition. They contain important provisions that will bring energy security and low-emissions, job-rich energy projects to the regions. The member for Indi and her community have shown remarkable vision and community spiritedness in bringing these bills to this place, and that's the note I would like to finish on. We hear many in this place talk about delivering opportunities for their communities, especially members of parliament who represent regional communities. But, if one really looks at it, there's always little that can really be said that actually gets delivered to the communities. Private members' bills like this show how it can be done. These are the solutions the government needs to pay attention to and enact into legislation. We have the solutions. We have the know-how. We now need the political will to be about putting in place solutions. I think the time for personal ambition is over when it comes to using energy policy, and a dysfunctional debate about the need to reduce emissions, for personal gain as opposed to focusing on the absolute national good of needing to embrace this transition. We need to be at the forefront and not behind it. It is happening. There is no debate over the fact that the world is transitioning to renewable energy, and there is a big question that must be asked of the Morrison government: are you going to be at the forefront of it and make sure that you are taking the opportunity and that Australians benefit and prosper for years and generations to come, or will we be playing catch-up because for too long personal ambition has stood in the way of good legislation? I commend these bills to the House.