Tuesday, 14 February 2017
Matters of Public Importance
I do worry about my colleague Senator Marshall's fragile ears—I hope he does not have to hear ideas that he is not comfortable with and that he does not agree with—it would be a great travesty in a democratic chamber if one had to encounter ideas one did not agree with. I find myself again thanking the Greens for bringing an important topic to the chamber, but I will not surprise them when I say I have to take some issue with the specific wording they have proposed and the angle they have taken. This morning when I saw the MPI letter come around, as it does every sitting morning, I thought it was fair enough that the Greens wanted to debate this issue—it is an issue that is passionate for them—and I expected them to be advocating for renewable energy, as they do. Even I was surprised to hear the Greens claim that renewable energy today is the most affordable and most reliable source of energy in Australia. Wow—renewable energy today is the most affordable and most reliable! I think a few South Australians would take issue with that, but I will come to that in a moment. I would have accepted the Greens saying that the cost of renewables is coming down—and it is, and that is a positive development. I would have accepted the Greens saying that renewable energy technology is improving and is becoming more reliable. That is also true. But to say that today, in Australia, it is the most reliable and most affordable source of energy is absolute fantasyland stuff—it is absolute alternative facts land.
If it were true that renewable energy was cheaper and more reliable, then why do we need any subsidies at all for renewable energy? If it is cheaper, if it is more reliable, then people would be building it—the private sector would build it without any government funding at all. The government has a renewable energy target of 23½ per cent by 2020, which I think is quite ambitious. Those opposite wanted to turbocharge it and make it 50 per cent by 2030, and I know the Greens would go further yet. If it was true that it was more affordable then those policies would be completely unnecessary—renewable energy would be rolled out on its own without any assistance from government.
Let us come to South Australia, because South Australia is a salutary lesson here. In the last four months in South Australia we have seen four blackouts. The South Australian government and those who seek to defend it, including Labor and the Greens, have had a different excuse each time one of these blackouts has happened. My absolute favourite is the most recent one—that it is the fault of the Australian Energy Market Operator. The hint as to why we should not blame the Australian Energy Market Operator for the most recent blackout in South Australia is in the name—it is the Australian energy market operator. And, lo and behold, it has not caused blackouts in any other state in Australia—it has not caused blackouts in Victoria or in New South Wales or in Queensland or anywhere else in Australia. If the fault lies with the Australian Energy Market Operator and not South Australia and their policies, why has AEMO not been blamed or found responsible for causing blackouts elsewhere?
I think the common thread between the blackouts we have been having is not AEMO, or any other government body outside of South Australia, but South Australia's policies on renewable energy. It is not a coincidence that the state in Australia which has the least affordable energy and the most serious issues with reliability also just happens to be the state that is most reliant on renewable energy. AEMO said in its report in December, after the spectacular state-wide blackout, that, yes, absolutely it was triggered by and the cause was the weather events that knocked out poles and wires across the state but the South Australian electricity grid is 'less resilient'—that is a direct quote—than other energy grids around the country because of its unusually high reliance on renewable energy. That is not a difficult thing to understand when you look at the proportion of energy in South Australia provided by wind. On a really good today wind can provide 80 per cent of South Australia's electricity needs. That is a great thing. But, unfortunately, not all days are good days from a wind point of view, and on some days it produces much less energy than that. In fact, on average it produces about 40 per cent and last week when they had a blackout it was producing 2½ per cent. The unfortunate thing is that, unlike thermal generation of power in which we control how much is produced, we do not control the wind and nor do we control the sun. Therefore South Australia is vulnerable, as a state that is so reliable on renewables, to radical fluctuations in supply.
If you want to have an electricity grid which is predominantly supplied by renewable energy, you need two things—two things are absolutely essential. You need storage of electricity and you need backup. Storage of electricity at this stage, with where we are in the technological cycle, is not viable for supplying a whole state. I hope that one day that will change and I hope technological evolution will allow that to happen. But we are not there today. We do, of course, have the capacity to back up our electricity networks with traditional thermal power stations, using coal or gas, that can come on and back up supply—but that will occur only if there is an incentive and only if they have not been pushed aside like they have been in South Australia by the renewable energy industry.
So unless we are able to overcome those two problems, renewable energy will be intermittent and unreliable, and that will have a very real cost for families and households. Even if we are able to overcome those problems, we will have a very serious issue of affordability, because renewable energy itself, as we know, since we need a RET to make it viable, is expensive, and the backups required to make it reliable are also expensive. So at the end of the day, if you want a state which is predominantly providing its electricity needs through renewable energy, you have to accept that it is going to be much more expensive electricity than it otherwise could be.
I think that, in this day and age, that is a very, very unwise thing to do. Australia could be the energy supercapital of the world. We could be more efficient and more competitive than any other nation in the world because we have some of the most abundant natural resources in the world in terms of coal and gas—in terms of uranium, even. We could be leading the world. But we do not lead the world, because of some of the policies that have been put into place, and the South Australian government is a leading example of this.
We know that because they used to boast about how they were a leading example of this. Jay Weatherill, the Premier of South Australia, once proudly boasted that they were conducting a big international experiment in South Australia. Well, the results are in: the experiment has failed, and people are paying the price. Families are paying the price because their children are not able to have air conditioning on on a hot day. Businesses are paying the price because they have to shut down and send their workers home when the lights go out when they are forced to load shed. They are the consequences of the policies pursued by the South Australian government. They are the consequences of the obsession with renewable energy.
By contrast, our government is very prudently considering the benefits of new coal-fired technology. If you really care about the planet and what you really seek to do is lower emissions you would be happy to seek lower emissions by any means. If you replace some of Australia's existing, admittedly old and not all that efficient coal-fired power stations with a brand new coal-fired power station using high-efficiency, low-emissions technology, using supercritical technology, then you can and will lower emissions in Australia. There is an estimate that if we replaced all of our traditional generation of coal with advanced ultrasupercritical generation, emissions in Australia could be reduced by 34 per cent. I think that is a good thing. I think that would be a welcome thing. Our emissions would be lower and we would also have an electricity grid which is much more stable and reliable. We would not have to worry about blackouts or load shedding. We will be able to provide affordable, reliable electricity to Australian families and businesses.
Of course we would not be the only ones doing this. Countries around the world, particularly in Asia, are leading the way. Japan and China are constructing many of these sorts of coal-fired power stations. China is even developing systems to retrofit their existing coal-fired power stations to make them more energy efficient. As the world's largest exporter of coal, it is in our interests to prove that this technology can work and can lower emissions at a reasonable cost. We hear a lot about the renewable energy policies favoured in the European Union, but in fact there are already 52 high-efficiency, low-emissions coal-fired power stations in the European Union.
I want to conclude with some unfortunate facts—not alternative facts like we have heard from the Greens earlier today. It is from the National Electricity Market Watch, happily provided to me by the Minister for Resources and Northern Australia's office. It is about the electricity that is being generated today at midday. Black coal—50 per cent. Brown coal—18 per cent. Gas—15 per cent. Hydro—five per cent. Wind—0.8 per cent. Today is a day like many days in South Australia and around the country: if the wind is not blowing the power is not being generated, and there needs to be a reliable back-up supply. High-efficiency, low-emissions coal can be the answer.