Senate debates

Tuesday, 8 November 2011

Bills

Clean Energy Bill 2011, Clean Energy (Consequential Amendments) Bill 2011, Clean Energy (Income Tax Rates Amendments) Bill 2011, Clean Energy (Household Assistance Amendments) Bill 2011, Clean Energy (Tax Laws Amendments) Bill 2011, Clean Energy (Fuel Tax Legislation Amendment) Bill 2011, Clean Energy (Customs Tariff Amendment) Bill 2011, Clean Energy (Excise Tariff Legislation Amendment) Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2011, Clean Energy (Unit Shortfall Charge — General) Bill 2011, Clean Energy (Unit Issue Charge — Auctions) Bill 2011, Clean Energy (Unit Issue Charge — Fixed Charge) Bill 2011, Clean Energy (International Unit Surrender Charge) Bill 2011, Clean Energy (Charges — Customs) Bill 2011, Clean Energy (Charges — Excise) Bill 2011, Clean Energy Regulator Bill 2011, Climate Change Authority Bill 2011; In Committee

10:23 am

Photo of Kate LundyKate Lundy (ACT, Australian Labor Party, Parliamentary Secretary to the Prime Minister) Share this | Hansard source

The government opposes these amendments. In general, the government's Energy Security Fund, given effect to by part 8 of this bill, will mitigate energy security risks as Australia transitions from high-emissions-intensive sources of electricity generation to more renewable and low-intensity sources. The assistance has been designed and carefully targeted to address the most severe impacts of the carbon price on coal fired generators. It has also been designed in a way to ensure incentives to abate are maintained and complement support for the transition to low-emissions and renewable generation.

The effect of these specific amendments would be that all coal fired generators, both black and brown coal, would qualify for assistance, and this assistance, combined with part A, would effectively mean that the generators had no carbon cost at all until 1 July 2017. This would mean that inefficient coal fired electricity generators would face no incentive to reduce emissions at all and that the comparative advantage of lower emissions generators, such as natural gas and renewable generation, would be significantly reduced. Our indicative estimates suggest that these amendments would increase the cost of assistance to generators by about one-third, or $1.5 billion, over the four years of free permit allocations. This is in addition to the over-$80 billion in assistance that would already be provided to all electricity generators to 2030 under the Senator's related amendments that we were discussing previously.

These amendments would add to the administrative complexity of the scheme by requiring generators to adhere to more onerous reporting requirements, including providing financial information such as revenue and value added data. These amendments would result in even weaker incentives for consumers to improve their energy efficiency, in contrast to the stated intention of the amendments tabled by Senator Xenophon to establish a white certificate scheme.

I think it is important to note that the amendment establishing part 8A does not define the emissions-intensive baseline referred to in the amendment to clause 167(2). So, in opposing these amendments, we consider that clause 168, which the next amendment, amendment (28), actually goes to, should stand as printed.

Comments

Mark Duffett
Posted on 9 Nov 2011 11:55 am

"more renewable and low-intensity sources" equals low reliability, high land use and high expense. Without nuclear, they do not "mitigate energy security risks", quite the opposite in fact.