Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

Like Senator McEwen, I have great pleasure in rising to speak on the Renewable Energy Amendment (Feed-in-Tariff for Electricity) Bill 2008. The world of course is very much dependent on fossil fuels for its energy production, and it is indeed urgent that we support the development of non-renewable sources of energy and support their use around the world. The feed-in tariff system has proved useful in many countries around the world and in many states in Australia. It is a system whereby electricity from renewable energy sources is paid for at a higher rate than that from fossil fuel sources. The payment is spread across all energy users and therefore there is only a small increase in cost for each energy user. It is a very reasonable way in which to spread the extra cost of energy from renewable sources across the whole of the electricity-using system, thereby encouraging the use of renewable energy.

Why do we need to pay special attention to the cost of renewable energy? Because it is a new technology. Some renewable energy sources are well tried and have been operating successfully for a long time, but we need to encourage wider use of those renewable energy sources and the expansion of different kinds of energy sources as well. In any area, new technologies, new ways of doing things are expensive to implement. A lot of money has to be spent on research and development, and on testing to make sure that the new technologies work. In many cases pilot plants have to be set up for testing and monitoring to make sure that the new system works well in practice. Once the research and development and testing are finished, there is the building and installation of any new system and the start-up and training costs required for that.

Any new technology is expensive. Indeed, we have just been dealing with the removal of the excise exemption on condensate, which is a case in point. The industry had to build up more or less from scratch a new facility and get things going. The government recognised this and gave assistance to that industry to start up. It is a similar case with renewable energy: government assistance is required to kick-start this new system, and it is entirely appropriate that ways be found to subsidise it and to assist the industry to get going.

Apart from the start-up costs, there are the costs of continuing operation. People investing in renewable energy need certainty that the projects are going to continue for some time, that they will get to a period where they can amortise their start-up costs and that they will have an ongoing rate of return that will justify their initial investment. Many companies, including companies involved in fossil fuel energy production, are very keen to start working in renewable energy supply. In my own state in South Australia I had quite a bit to do with Origin Energy, which is, and has been for many years, responsible for developing renewable energy sources. It and many other companies in that area are very keen to prove that they can produce renewable energy efficiently and well to replace the fossil fuels, the non-sustainable energy source, that we have been using.

When I started work in the mid-80s at a company called Australian Mineral Development Laboratories, the tail end of solar photovoltaic research and development was still occurring in its laboratories. Australia, and South Australia in particular, was leading the way in solar energy research some decades ago. It is a matter of great shame that we lost the advantage we had. It is a great pity that that was allowed to happen over successive decades because we would have been well-placed if the kind of government support that went into that research, and also private industry support, had been continued. That is not to say that R&D in other areas has not continued. Coming from South Australia, I am very keen about geothermal energy, into which a lot of work and money has been poured by private sources, with public assistance and encouragement. A pilot plant is already working on geothermal energy, and we have great hopes for it. But that is incidental to this debate.

I support the government’s position that there should be a COAG-agreed position on feed-in tariffs. Although I understand the support of Senator Milne and the Greens for a national feed-in tariff system and can see the efficiency that it might generate, I know that the states have already embarked on this path. In 2007 and again in 2008 the South Australian government passed legislation relating to feed-in tariffs. The South Australian government has a great commitment to that system and to renewable energy generally. It has put solar panels in many public buildings, around Adelaide in particular, and has been very keen to assist wind farm development in that state. The South Australia government has a very strong commitment to renewable energy and feed-in tariffs. I am confident that it will work with the other states, within the COAG process, to achieve a good system that suits individual states. As has been pointed out by previous speakers, the federal government is working on its own initiatives in regard to greenhouse gas emissions and renewable energy, above and alongside what the states are doing on feed-in tariffs.

It has been pointed out previously that the government has set the national renewable energy target at 20 per cent by 2020 and expects the Carbon Pollution Reduction Scheme to be operating very effectively at that time. The Carbon Pollution Reduction Scheme, with its cap and trade model, is clearly going to be a very efficient and effective way to encourage the use of renewable energy and to effect a reduction of greenhouse gases. We do not have the final model, but it is clear by the way that the Minister for Climate Change, Senator Penny Wong, and the government are proceeding that that system will be comprehensively thought out, that it will have had wide consultation with a range of groups and that it will have an immediate impact and work very effectively on a national level. I think it is very appropriate that the federal government continues to concentrate its energy in that area, that it continues to work in the sphere of reducing greenhouse gases and encouraging renewable energy while the states continue down the path to which they have been committed for some years now and work within the COAG process, with the encouragement of course of the federal government, to ensure that there is a system that works well nationally but that is administered by the various state and territory jurisdictions.

On the government side, we are impatient and keen to see these things happening, as indeed are the Australian Greens, clearly. I look forward to seeing some results soon, after a period of inaction. Indeed, we are well behind many other countries in Europe in this regard and, in some respects, the United States as well. When I was looking at this issue of feed-in tariffs, my usual source Wikipedia said that Jimmy Carter, the former President of the United States, first brought in this kind of system back in 1978 in the United States in response to an energy crisis. I will not swear by that source, but many other countries have got the jump on us and, if that is so, it is a pity that President Carter’s work was not continued with. The world would be in a much better position now to deal with the effects of pollution and greenhouse gases if that had been the case.

The Australian community has a lot of catching up to do of work that could have started much earlier. I am confident about the government’s many-layered plan of action to deal with the increase in renewable energy sources and with greenhouse gases. Although I commend the Greens for the work that they have put into this bill, I have to support the government’s position in continuing down the path it committed to during the election and subsequently.