Nick Xenophon (SA, Independent) Share this | Hansard source

At the outset, I indicate and express my support for the renewable energy target. I believe that it is an instrumental part of Australia's climate change policy and that it has been a driving force behind investment in renewable energy, but there have been a number of issues in respect of it which I will address shortly. I do believe in anthropogenic climate change. I believe that it does happen, that we need to address it and that, to quote Rupert Murdoch, we need to give the planet 'the benefit of the doubt'. I think we need to have a number of effective policies in place.

The nub of the issue is: how do you reduce greenhouse gases as effectively as possible and in the most cost effective way possible? I think that having an efficient emissions trading scheme is the best way. Having a market based mechanism is the best way in the longer term. That is not the policy of this government, but I have worked very hard in the context of the Direct Action legislation on the Emissions Reduction Fund, working constructively with Minister Hunt and his very capable advisers, to drive a number of amendments that I think make the Emissions Reduction Fund much more robust and much more effective, with a safeguard mechanism that has real teeth. The framework is there. The government need to honour their commitment to make sure that a practical effect of the legislation is a safeguard mechanism.

As I said, the issue is: how do you drive the best possible reduction in emissions as efficiently as possible? Back in 2009, when Hon. Malcolm Turnbull was opposition leader, Mr Turnbull and I jointly commissioned Frontier Economics to prepare an alternative emissions trading scheme that was based on energy intensity. It was considered. It was thoughtful. The predictions made by the Managing Director of Frontier Economics at that time, Danny Price, proved to be very much true: having a scheme involving a lot of revenue churn would be economically inefficient and not as effective as it could be in environmental terms. That is why I still maintain that what was proposed by Frontier Economics in the report, study and modelling commissioned by Malcolm Turnbull and me back then would have led to greater reductions in emissions at a more affordable price and that it was a better option. Sadly, politics got in the way. Malcolm Turnbull was no longer opposition leader. He lost his leadership essentially over the issue of the ETS—it has claimed a number of casualties over the years. As a consequence, we ended up with a policy that I thought was clunky and inefficient.

I think Direct Action will work and has worked, but there is more work to be done. What we are facing here in relation to the renewable energy target is a scheme that, in my view, has needed amendment, because when the scheme was designed a number of years ago, with bipartisan support, it was anticipated that renewable energy would make up about 20 per cent of overall energy consumption. There are a number of reasons it has not, including energy efficiency measures that have been effective; but also, sadly and tragically, the demise of the manufacturing industry in this country has meant that a number of major manufacturing facilities have closed down, which has reduced the demand for electricity, particularly amongst energy-intensive industries. It is important, however, that we have some certainty for this industry. Discussions around changes to the RET, the repeal of the carbon tax and the proposed abolition of the Clean Energy Finance Corporation, amongst others, have sent a message of uncertainty. I think certainty is important, but it must be with a robust framework that will deliver results in the most effective possible way, both for consumers and for taxpayers. That is why, despite the target being lower than I would like ideally, and despite there being no carve out for technologies that can provide baseload power, I will be supporting this legislation broadly. But I will focus on the issues of wood waste and biomass, and also the issue of wind energy, because I see them as inextricably linked in relation to this.

In relation to the issue of wood waste, an article on 5 June in the RenewEconomy publication gave a summary of some of the arguments. It mentions Ross Hampton, the CEO of the Australian Forest Products Association, who said on 15 May that biomass used for electricity would be a very small amount. He downplayed his own initial estimate to the Warburton review of the 3,000 to 5,000 gigawatts of power a year, admitting that AFTA had put the figure to the review panel, but saying that it was a very theoretical number. I have dealt with Mr Hampton and worked with him constructively in the past, and I hope to continue to work with him constructively in the future. Perhaps it was better that that very theoretical number was not put to the Warburton review, although I do have my serious doubts about the effectiveness of the Warburton review, its robustness and a whole range of other matters. I thought that it was not a very good exercise in having a robust, independent review. I do not think that it was anywhere near as credible as it needed to be. Perhaps some of my colleagues on the other side of the chamber will say that I am being too kind, and maybe I am.

In relation to the issue of biomass, in the pre-2011 regulations, according to the RenewEconomy publication, which I think gives a neat summary, 'there were certainly very few biomass projects to receive Renewable Energy Certificates'. The article goes on to say the:

… post Regional Forest Agreements decade was a period of almost boom conditions for the woodchipping industry. Both prices and export volumes increased to record levels and profits were high. It would have been impossible for the energy industry, with or without Renewable Energy Certificates to compete with the prices the industry was getting for woodchips for fibre.

Some commentators would make the point that things have now changed and that this could loom larger in terms of the issue of biomass, but let us put this into some perspective. Biomass can produce methane, which is 15 times more potent and more damaging to the environment than CO2. It needs to be dealt with. There is also the issue of fire hazards, and I think that is a real issue in terms of appropriate clearing. Mr Acting Deputy President Back, given your role with the Country Fire Association in WA, I think you know about the issues and risks with bushfires, and I hope you do not mind me mentioning that, given your expertise and your history in relation to that. I do not know whether the issue of biomass will be the saviour of the forestry industry, as the industry is saying, and I do not think it will have the uptake that some in the environment movement are fearing. But I think it is important that there must be some adequate safeguards, and that is something that, from my point of view, is still subject to negotiation. I understand there will be some further amendments in respect of this issue, and I am grateful to my colleagues in the Greens—Senator Waters and Senator Rice—who I have had discussions with and will continue to have discussions with about this.

I think it is important that in the committee stage there is a robust debate and discussion about this, and that questions are appropriately answered. I think people know that my view in relation to procedural matters is to bring on a debate. Sometimes it is appropriate to say that we need to have a set time for this, but when it comes to the committee stage of a bill there ought not to be a gag. If we have to spend all week here, if we have to spend the weekend here, or if we are here for the next month debating this, if it is the will of the chamber not to cut off debate then my view is that we need to thoroughly canvass these issues. That is why I say now, as I have previously when it comes to the substantive debate of a bill, that I will not support a gag. In regard to the issues relating to biomass, I think we need to see what further amendments there will be and what undertakings will be made by the government. I think the committee stage is the appropriate stage to deal with those amendments.

I want to refer to Frontier Economics, who, back in September 2014, issued the paper 'Can Australia still meet its emissions target with changes in the RET?' The people at Frontier Economics are pretty dispassionate. They made the point that the RET 'is a relatively high cost approach to reducing emissions because it focusses on specific forms of electricity generation', and that it has contributed to a large surplus of generation capacity. They are simply stating facts about how the national electricity market works. They make the point that:

The RET does not generate an increase in wealth in the economy, but leads to a transfer of wealth among participants in the electricity market.

In that respect, it is being critical not of the RET per se, but of the way that it is operated and particularly of the way that wind energy—and this is also my view and the view of others—has distorted the national electricity market because it is not baseload. It is intermittent and unreliable, and if you have a heavy reliance on wind, as there is in my home state of South Australia, it can, and does, have an impact on the market. Frontier Economics has made some good points about this, and their overall thrust is that there are better and more efficient ways of reducing greenhouse gases than simply using the RET by itself. It needs to be a whole package of measures. I see the advantage of the RET as one of driving technological change, in the sense that it drives efficiencies for solar panels; for solar-thermal generation, which is very exciting in terms of its potential for baseload power; and for other forms of renewables such as landfill gas. Soaking up that methane from landfill not only is essential from an environmental point of view, but does provide baseload power, which is very important. If you want to shut down thermal generators, coal fired generators, you need to have the backup of baseload renewable alternatives, and that is why solar thermal is important.

In that regard, given the announcement made last week by Alinta Energy concerning Port Augusta, in my home state of South Australia, the importance of the Solar Cities project and the importance of finding the funding and the financing for the solar thermal project in Port Augusta take on an added significance. It is something that I have raised with the Minister for the Environment on a number of occasions, it is something that has an added urgency to it and it is something that I have raised with the Clean Energy Finance Corporation in broad terms.

In the course of this debate, this cannot be simply seen as a silo about a renewable energy target and the issue of wood waste. It is also worth mentioning, most importantly, the issue of wind generation. I have serious concerns about the proliferation of wind turbines in Australia in terms of both their economic impact and their community impact. I know a position is taken by some, which I consider to be unfair, that there is a nocebo effect—that somehow this is some sort of psychosomatic illness of communities. Just last week, Mr Acting Deputy President Back—and you were there as well—at the hearing of the Select Committee on Wind Turbines we heard from two residents in South Australia who were hosts of wind farms. They are receiving something like $200,000 a year from the proponent for hosting the wind farm. They, basically, had their lives disrupted significantly because of the noise and the vibration of the wind turbines. The power company effectively had to spend a fortune on their home to block the noise as much as possible. Those people were brave enough to speak out that there is a real issue there.

I am calling for a commitment to some independent scientific assessment of this—objective science and objective measuring of the noise and other issues including infrasound. Even the levels of acoustic noise need to be dealt with, and that is why I was very pleased to support Senator John Madigan's bill in respect of wind turbines and excessive noise. That is what we need to revisit. We need to give those communities a sense of empowerment. If the current rules are being breached, they need to be enforced. The current rules need to adequately reflect the science and the genuine concerns of the communities around noise and sleep disturbance—if you do not sleep, it has health effects. These are the issues that need to be dealt with in the course of this debate.

I want to briefly mention, before we go to the adjournment debate, matters that have been raised with me by Susan Jeanes of Jeanes Holland and Associates. Susan Jeanes is a former coalition member for the electorate of Kingston. I think it is fair to say that she would be described as a moderate—Senator Birmingham is chuckling. I do not know what that means, but I have a lot of respect for her. There is a nod there and hopefully the respect is mutual, Senator Birmingham. She is someone who has advocated in this space and is a great proponent of large-scale solar projects and of ensuring that those forms of renewables that are more reliable and do not have the same level of community impact and disruption get a fair go. I am very grateful for a short paper that Susan Jeanes provided to me. Issues were raised around the role of the Clean Energy Finance Corporation, which I believe has an essential role in climate change to be involved as a guarantor for power-purchasing agreements for smaller retailers, to create a focus on Australian solar projects for the low-cost, very active US bond market, and to have longer than usual debt-financing terms so that you can encourage those more reliable forms of renewable energy, including large-scale solar, landfill gas and genuinely new hydro—because it is a form of baseload renewable. I know there is some controversy about that. My colleagues in the Greens may have a different view, but we need to encourage baseload renewables and those more reliable forms of renewable energy. The problem is that there currently are not enough incentives for those baseload renewables.

I will conclude my remarks in the second reading debate now. I look forward to the Committee of the Whole stage, which I expect will be robust and contentious, but I hope we get to a suitable conclusion.

Debate interrupted.