Senate debates

Wednesday, 17 June 2015

Bills

Renewable Energy (Electricity) Amendment Bill 2015; Second Reading

11:39 am

Photo of Jacqui LambieJacqui Lambie (Tasmania, Independent) Share this | | Hansard source

I rise to speak on the Renewable Energy (Electricity) Amendment Bill 2015. Before I detail the reasons why I think every senator should support this legislation, it is useful, for future reference, to consider a small technical description of this legislation. In summary, the Renewable Energy (Electricity) Amendment Bill 2015 amends the Renewable Energy (Electricity) Act 2000 to adjust the required gigawatts per hour of renewable source electricity in each year from 2016 to 2030 with a gigawatts per hour target of 33,000 gigawatts per hour in 2020 and to replace the current partial exemption for electricity used in emissions-intensive trade-exposed activities with a full exemption; amends the Renewable Energy (Electricity) Act 2000 and Climate Change Authority Act 2011 to remove the requirement for the Climate Change Authority to undertake biennial reviews on the operation of the Renewable Energy (Electricity) Act 2000 and subordinate regulations; and amends the Renewable Energy (Electricity) Regulations 2001 to reinstate native forest wood waste as an eligible source of renewable energy.

This is a very important piece of legislation for Tasmania, because we are the renewable energy capital of the world. No other state in Australia uses as much renewable energy compared with non-renewable energy as Tasmania. A 2014 report from the Australian Bureau of Resources and Energy Economics shows that in 2012-13—out of a total of Tasmania's 3,136 megawatt installed capacity—2,630 megawatts were from renewable hydro power. In 2012-13, Tasmania had no electricity generated by either black or brown coal fired power plants; however, the rest of Australia, excluding the Northern Territory, relied on black and brown coal to produce almost 29,000 megawatts of electricity. This sum of 29,000 megawatts of electricity represented more than half of Australia's total installed electricity generating capacity of 56,079 megawatts. Today more than 95 per cent of Tasmania's electricity comes from carbon-free, renewable hydro-electricity which, unlike wind and solar, is able to power heavy industry with reliable baseload power 24 hours a day—whether the wind is blowing or the sun is shining.

Put simply, when we turn the power switch on in Tasmania, we do not pollute the environment with any CO2, so why should our businesses, industries and families be hit with more expensive electricity because of the mainland's RET penalties? Why should 10,000 direct and indirect manufacturing jobs associated with Tasmania's aluminium, zinc, magnesium, cement and paper industries be placed at risk because of RET penalties totalling tens of millions of dollars each year? And, to rub salt into the wound, the RET money raised in Tasmania is going into a fund whose main purpose is to replace mainland coal fired power generators with renewable energy!

The RET scheme that is now in place discounted and ignored most of the renewable energy created by Hydro Tasmania. Parliamentary Library research showed that Hydro Tasmania only received an Australian RET credit income of about $60 million per annum, or five per cent, of the possible RET credits created by the electricity created from Tasmanian renewable water power. So why are we missing out on the other 95 per cent, or more than $1.1 billion per year of possible Australian RET credits? This is an important question that the federal Liberal Party, who first designed the RET system, must answer.

Everyone knows that water, or hydro, power, is one of the best forms of renewable energy available to mankind. Unlike wind power, hydro can supply cheap, reliable, baseload electricity for 21st century factories, businesses and families. There is no risk of brownouts, voltage fluctuations or loss of electricity supply if a community relies on hydro, which Tasmania does. So it disappoints and upsets me that Tasmanian Liberal, Labor and Greens politicians for over a decade have accepted a mainland RET scheme which only pays Tasmania $60 million a year for RET credits, when we should have received more than $1.1 billion if it were to be fair. Since it came in, we would have been $20 billion better off in Tasmania—there is no doubt about that.

Renewable energy is a policy area in which I had major disagreements with Clive Palmer. You will recall Mr Palmer signed an infamous RET deal with former American Vice President Al Gore without my knowledge or approval. If I had blindly followed the Palmer United RET policy of not lowering the RET target before the next election, as the Greens would have done, I would have risked the jobs of 10,000 Tasmanian workers and the viability of all of Tasmania's major manufacturers. My Tasmania already has the highest unemployment rate in Australia. As a matter of fact, two days ago it hit seven per cent. My conscience will not allow me to sit silently and watch as our manufacturing industry and economy is destroyed by what is effectively a sneaky mainland tax which forced (1) every Tasmanian to pay an extra 3.6 per cent on top of their electricity account and (2) our largest manufacturers and employers to pay, on top of all their normal taxes, tens of millions of dollars in mainland RET penalties so that Australia's mainland states have the funds to replace coal fired power stations with renewable energy. One of the main reasons I resigned to become an independent was to put my state's economic health and workers' job security before PUP's RET deal with Al Gore. As I mentioned before—and I will say it again—we do not pollute the environment with CO2 when we turn on our power switches in Tasmania, so why should we be forced to pay any mainland RET penalties?

I am very pleased that this government has listened to my advocacy for the forestry industry and made changes to the current RET scheme which will allow bioenergy to play a greater role in Australia's renewable energy future. Allowing all electricity generated from biofuels created from biowaste—food, meat, all wood, straw, feedstock et cetera—to contribute to our national RET target is another important provision in this legislation. I will also use my vote in the Senate on behalf of the Tasmanian forestry industry and its workers to protect and guarantee the reinstatement of wood waste from sustainable native forestry harvesting and processing operations to contribute once again to the RET target. Nationwide, this will create and support thousands of jobs in rural and regional areas—and I can assure you that they need it. In Tasmania, it will create and support hundreds of vital jobs in our country regions. Despite the blatant lies and mistruths put out by the Greens, all this provision means is that the timber offcuts and small woody waste, which are currently left to rot or burnt in bushfires, can be used in the generation of renewable energy. Not one extra tree will be cut down.

I expect the Greens to criticise my call, but they have caused enough damage to our economy in Tasmania and enough jobs have been lost because of their over-the-top environmental policies. If anyone wants to see what happens when the Greens take over, come and have a look at the chaos, economic and social destruction the Greens have caused to bring Tasmania to the brink of economic and social ruin. Common sense, workers' job security and sustainable economic growth must come first in Tasmania again.

I have never heard so much garbage about energy and climate change. If you listen to the Greens, you will hear that they think that a 21st century economy and industrialised society can sustainably and affordably run on renewable energy. What a load of rubbish! The only form of renewable energy which can provide baseload power for a 21st century industrialised, advanced society with world-competitive energy prices is hydro power. The rest of the renewable sources of energy are unreliable and too expensive to power a 21st century industrialised, advanced society. The Greens are peddling false hope and a blatant lie about renewable energy being able to replace the fossil fuel powered generators, which provide baseload power for our cities and businesses.

Apart from hydro energy, the only way we can cheaply and reliably decarbonise our energy generation while maintaining secure baseload power is to move very quickly to nuclear power generation. It is about time we had an honest debate about that option, and I will be speaking more about that plan in the near future. If we follow the Greens' foolish plan to shut down our fossil fuel power generation and replace it with unreliable, expensive renewables, we can kiss cheap, reliable energy goodbye and say hello to brownouts, power failures and the destruction of millions of manufacturing jobs—what is left of them.

The only way Australia will maintain our comparatively high wages and standards of living is to ensure that our manufacturers, farmers and businesses have access to energy and electricity prices which are some of the cheapest in the world. As a nation, we must never lose sight of the fact that our nation's prosperity, our grandchildren's jobs and our privileged place in the world depend on the fact that we must provide, when compared to the US, Canada, South America, Europe and Asia, the cheapest energy in the world to our businesses. If we do not as a nation focus on cheap energy, it is guaranteed that our standards of living and wages will rapidly drop, because the two biggest costs in making products such as food and in creating wealth are energy and wages. If we do not have cheap, reliable energy, then our relatively high wages and standards of living compared with the rest of the world will disappear.

It is not just me who is speaking this self-evident economic truth about the critical need to secure cheap, reliable energy for our businesses, families and workers. I remind this Senate once again of the words and observations of respected Australian academic Dr Thomas Barlow, a research strategist specialising in science and technological innovation and the author of Between the Eagle and the Dragon: Who is Winning the Innovation Race? On ABC Radio National, he reminded Geraldine Doogue:

One of the key theories of why the industrial revolution occurred and where it did, in the north of England, is that in the 18th century the north of England had an overly unique combination of low energy prices and high labour costs.

That combination was the perfect combination because it encourages a society to substitute labour for capital.

That is one definition of innovation. You want to use fewer people to achieve the same or better outcomes.

Look to the US—at the moment the US is having an energy revolution. They have cheap energy.

The cost of natural gas in the US is about a third of what it was in 2008. And as a consequence we see manufacturing flow back to the US.

But far more significant than the trend in manufacturing is the potential that this creates for an acceleration in innovation.

It is clear that America has learnt the lesson about economic growth, innovation, jobs and cheap energy and that its slow but sure economic revival has come about because its combination of policies has delivered some of the world's cheapest and most reliable energy to its people and businesses.

Quite simply, without cheap, reliable energy Australia is doomed to suffer a terrible fate. Our standards of living will drop, downward pressure on our wages will be irresistible and our manufacturing industry and wealth-producing capacity will collapse, more than they have already collapsed.

Every Green member of this Senate needs to be reminded of the fact that we have climate change and, indeed, there has never been a time in the world's history when we did not have climate change. On page 66 of Al Gore's book, An Inconvenient Truth, there is a graph showing the rise and fall of average world temperature for the last 600,000 years. Al Gore's figures show the average world temperature has been much hotter and much colder than today's average of 14 degrees. And how do I know that today's average world temperature is about 14 degrees? Most members of this place, including the Greens, would have a clue about the value of the temperature, as we are all worried about the temperature, which we don't want to see increase or it get warmer. On page 5 of Tim Flannery's book, The Weather Makers, he says, 'For the last 10,000 years Earth's thermostat has been set to an average surface temperature of around 14 degrees.' Most Greens would not know what the average world temperature is, but they will speak about climate change as if they were experts.

Of course, what the Greens and Mr Flannery fail to tell us is that over the last 300,000 years the world's average temperature, as show on page 66 of Mr Gore's book, was much hotter than our 14 degrees on at least three occasions. At approximately 100,000, 200,000 and 260,000 years ago, the average world's temperature exceeded today's 14 degrees by many degrees. So, yes, of course, there has never been a time in the world's history when we did not have climate change. It is just that the Greens and others who rely on the fear created by the thought of climate change to make money or benefit their political cause will never admit to this reality.

I was present when Ross Garnaut, the architect of one of Australia's most significant climate change policies in 2008, was asked: 'What is the current average world temperature?' He tried to tell me that it was 12 degrees—and this is an expert. Indeed, should anyone require it, I can produce a hand-drawn graph where Mr Garnaut tried to convince me that the average world temperature was 12 degrees and had climbed two degrees in 50 years. I have all of that on paper.

In shaping climate policy, there is a lot of fear and Greens dishonesty, and we have to remember this fact. Even by the Greens own rules on climate change, with 30 to 40 years worth of climate change already locked in, humans cannot stop climate change. We can only make credible plans to adapt, innovate and survive climate change. Practically, that means focusing on Australia's food and water security, energy security and national security. We have to: 1) protect our prime agricultural land and soils, protect our food-growing lands and allow our farmers to be profitable, secure and earn a decent living; 2) build more dams, because if you do not want to drink water then do not build dams—and use those dams not only for water security but for making clean, reliable, cheap hydroelectricity; 3) become world leaders in nuclear energy and electricity production—we must use our uranium resources to secure our energy future and make sure Australia has the cheapest, most reliable and safest energy supplies in the world; and, 4) dramatically boost our military, emergency and essential services so that whatever Mother Nature throws at us, whatever other envious, aggressive countries want to throw at us, Australia has enough trained military, emergency and essential services to care for, protect and defend our current population, our children's future and our national interests.

These are the policies, plans and solutions we should be talking about when we discuss climate change, not the absolute rubbish that comes from the Greens mouths about building wind farms to save the world and stopping unstoppable climate change by killing off Australian manufacturing jobs and making our power charges the most expensive and unreliable in the developed Western world. If you think you can stop the world's climate from changing by making pensioner's pay more for their energy, by building wind farms and by mandating renewable energy targets, then you are worse than deluded. You are dangerously deluded and you should be locked up, because you are helping our enemies destroy our great nation. If you agree with the rubbish that has come out of the mouth of Christine Milne and the Greens, you are, at best, condemning our children to a life of abject poverty in the future.

I will gladly vote for the Renewable Energy (Electricity) Amendment Bill 2015, because it will protect 10,000 Tasmanian jobs, which are tied to the beating heart of our economy—our heavy manufacturing and forestry industries. This legislation will effectively lower the price of energy for Tasmania's biggest employers, our manufactures, and make our timber industry more efficient. This legislation will allow Tasmanian businesses to compete, make a modest profit and sell their products on the world market, which is dominated by countries that are smart enough to deliver cheap energy to their people and businesses and not dumb enough to allow the Greens to be in charge.

11:57 am

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Mr Deputy President, what a wonderful speech. I must say that it is a long time since I have heard a speech that is so clear a perspective on the reality of life. I am delighted that there is at least one Tasmanian non-government senator who understands, firsthand, just how destructive the Greens political party is. Senator Lambie, we have had our differences and I am sure we will in the future, but could I say to you that I congratulate you on the way you understand what happens in Tasmania and in the forestry industry. The Greens are just hell-bent on destroying Australia in whatever way they can. Some of you will be pleased to hear that the things Senator Lambie has said will allow me to shorten my speech by about 10 minutes, because she said many of the things that I would have said! Senator Lambie, it was a wonderful speech. Congratulations. I, as you may know, was the forestry minster years ago, when we actually thought we had saved the Tasmanian forestry industry from the Greens and Labor, through the CFMEU. Dare I say that the F part of the CFMEU went against the Labor Party at that time and agreed with the government that we should do things in Tasmania that would save the industry. Unfortunately, that did not last too long. One of the regrets of Mr Howard taking me out of that portfolio, I might say, is that my successor was not able to continue the success of the Tasmanian forestry industry, but that is a personal matter. But you have certainly hit the nail on the head. In those days when I was the forestry minister, we were trying to include offcuts as part of the renewable energy regime, but the Greens and the Labor Party had the numbers to stop it. So I am delighted to hear what you said today.

I am also delighted to hear you say something that I have said many a time, and that is that we all acknowledge that the climate is changing. In spite of the Greens getting up and saying, 'You're all climate change deniers,' I have forever agreed that the climate is changing. As I have always said, there was a time—I was not around—that the earth was all covered in snow and there was once a rainforest in the centre of Australia. Of course the climate has been changing; it is not an argument. But what is the cause of it? Is it man-made pollution? Some scientists seem to think that it is. As you rightly point out, those scientists continue to get grants from governments for so long as people like the Greens political party and the Labor Party continue to give money to try and prove the theory that they are trying to prosecute. Of course, without those grants—if they did not have climate change to get the grants—then they would probably go out of business and have to do something that was actually useful for mankind.

Clearly, the climate has always been changing. Is it man's emissions of carbon? I always say that I do not know. If top scientists who are skilled in these matters have different views—and they do—then I always claim, 'Well, I am not in the class, and I am not convinced.' The Greens will say that any scientist who supports their view is correct, brilliant and a leader in the field. But any scientist who has an independent view and a different view is pilloried by the thought police, of which the Greens are the leading advocates.

Senator Whish-Wilson interjecting

The Greens would have everyone agreeing with their view, but if you do not—well, Senator Lambie, you just heard the interjections from the Green, trying to browbeat and bully you to their point of view. I am delighted to see, Senator Lambie, that you will not be bullied by the Greens and by the thought police on these issues.

We are entitled to have a different view. I am not claiming that I am right. In fact, I am claiming that I do not know. There are very credible top scientists, very professional scientists, who have a different view and who are equally skilled and professional as those favoured by the Greens political party. But the Greens, of course, will denigrate anyone who does not conform to their view. Thank you, Senator Lambie; you have shortened my speech by 10 minutes. Thank you for your perception of what is happening in Tasmania in the forestry industry and, particularly, of the destructive force that the Greens political party is.

I just want to say a few words on this subject. My colleagues, in the second reading speech and otherwise, have indicated what the bill is all about. It has been well publicised in the newspapers. I think that most listeners will understand that, with the turn down in the Australian economy thanks to the Labor Party, there is less electricity to be used and we do not need the same quantity of renewable energy. So I will not go over that.

I just want to highlight four industries in the north of Queensland, where, as you all know, I come from and am passionate about. I am delighted to see that the aluminium industry, the cement industry and the zinc industry in Townsville will be totally exempt from the renewable energy requirements. Those three industries provide an enormous capacity for Australia. They provide export dollars and import replacement dollars, and they employ literally thousands and thousands of North Queenslanders and Central Queenslanders in their works.

Had they been included, as was originally proposed some years back, then you would have seen the disappearance of all three industries from Australia. There is no doubt that the aluminium industry could not have continued to exist in Australia. There is no doubt that the cement industry could not have continued to exist. There is no doubt that the zinc factory in Townsville would have had to shut its doors. All congratulations to Mr Hunt for being able to negotiate that. I also give congratulations to representatives of those three industries, who made their views known and have convinced the government and, I understand, the opposition as well of how essential it is—for employment, for Australia's economy and for our exports—that those industries are put on the same playing level as their competitors overseas.

I also want to mention another great industry in northern Australia, and that is the sugar industry. Mackay Sugar was the leader, almost, in renewable energy from the leftovers of sugar cane. Their co-generation plants are world-class. I understand and have some sympathy for Mackay Sugar. I know that the greatest amount of renewable energy was better for their future plans, but I think that they will understand the impact on the balance of society. Even as it is, Mackay Sugar, of course, will be able to continue its existing co-generation plants and will continue to feed into the electricity grid to the benefit of electricity consumers as well as, importantly, the ongoing viability and success of the manufacturing sugar industry in the Mackay region. I am conscious that the sugar industry would like to expand co-generation into other mills—the ability to use co-generation certainly brings down the total manufacturing costs, and that can only be good for the manufacturing industry which is so essential to Australia.

It is important to recognise that the manufacturing industry in sugar employs many thousands of people in North Queensland. Sure, the canegrowing industry, which is very important in the locality that I come from, is the mainstay of the local economies of those towns, and it employs a lot of people—fewer these days than it used to, of course, with the increasing mechanisation in the canegrowing industry—but we can never forget that a big support base in many of the country towns in North Queensland is the sugar manufacturing industry—that is, the mills that crush the cane and export the raw product. So, whilst I know many parts of the sugar industry would have liked the Renewable Energy Target to stay where it was, I think they understand the need for reform, and I am sure they will continue to be able to successfully run those existing plants. I am hopeful that, into the future, new methods, new science, and new technology will allow the sugar industry to again—as a by-product—contribute to renewable energy in Australia. With that, I urge support for the bill.

12:08 pm

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | | Hansard source

I rise to speak against the Renewable Energy (Electricity) Amendment Bill 2015 and the life support it provides for the Renewable Energy Target. This bill is the result of negotiations between the government and the opposition. Its rationale was flawed from the beginning.

The Warburton review found that $9.1 billion in cross-subsidies have been spent since the commencement of the Renewable Energy Target. A further $22 billion is expected to be spent by the end of the scheme in 2030. That is money largely paid by electricity consumers to renewable energy generators, in addition to the unsubsidised cost of electricity. Quite rightly, the Warburton review described the Renewable Energy Target as nothing more than a transfer of wealth to large energy companies. Fairly obviously, it would be far better for our economy to leave billions of dollars in the pockets of Australians through lower electricity prices. Households and businesses, large and small, will pay the cost. Deliberately legislating measures which raise electricity prices and make industry less competitive should have no place in this country. The cry of the left—people before profits—should absolutely apply. The jobs and prosperity of people should come before the profits of renewable energy companies.

This bill's efforts to patch up the Renewable Energy Target will do for Australia manufacturing what wind turbines do for wedge-tailed eagles. Compared to this bill, I would prefer that nothing was done to the Renewable Energy Target, with the result that the target of 41,000 gigawatt hours would not be reached, penalties would apply, and the resultant increase in electricity prices would lead to a public backlash against the lunacy of the RET. Instead, it is set to become no more than a wind industry support fund. Already for 15 years we have been throwing money at this uncompetitive form of electricity generation. This new target of 33,000 gigawatt hours will more than double the number of wind turbines being subsidised by Australian families and businesses. That is around a couple of thousand new turbines. Nowhere in the world does electricity generation by wind survive without subsidy. Wind turbines are only profitable when subsidised or sold for scrap.

As much as big wind—and let us keep in mind the vast majority of new renewable energy generation is wind—likes to say that wind energy is driving down the cost of wholesale electricity, businesses and households pay retail electricity prices which, of course, include the direct subsidy they are paying. If artificially high electricity prices were not reason enough to oppose this bill, then the very high cost of emissions abatement from wind energy ought to be; that, again, was identified in the Warburton review. The Select Committee on Wind Turbines, of which I am a member, has heard convincing evidence that the contribution of wind energy to emissions reduction is less than significant. Importantly, the cost is wildly disproportionate to the reduction in carbon dioxide emissions. And as we have heard recently, Australia is on target to meet its emissions reduction targets without any additional wind power. If we are to retain a Renewable Energy Target—but in my view it is such poor policy that we should not—then the target should be no more than 27,000 gigawatt hours. That at least would meet the original target of 20 percent of renewable energy. And we must remember that a Renewable Energy Target of 20 per cent would set a minimum—if additional wind turbines were profitable without subsidies, then wind turbines would account for more than 20 per cent of electricity generation.

This bill is flawed. For years to come, it will make wind energy companies rich, and electricity consumers poor. I oppose it.

(Quorum formed)

12:16 pm

Photo of John MadiganJohn Madigan (Victoria, Independent) Share this | | Hansard source

Today I am going to lift the lid on the economics of the RET scheme, while speaking on the Renewable Energy (Electricity) Amendment Bill 2015. I am going to give you the inside story on the money trail of the wind industry. This is the story that neither side in this place, nor the Greens with their wind industry fundamentalism, want you to hear.

The subsidy for renewable electricity, legislated in the REE Act 2000, is paid for by electricity consumers in their power bill. There is government modelling that discusses the effect of renewable energy on the wholesale price of electricity. The industry claims that the RET scheme reduces the wholesale price of electricity, which it does as it creates an oversupply of the market. The modelling is based on this effect. This effect is irrelevant, as the subsidy is paid by the consumer in the retail price of electricity. This price is agreed by the generator and the retailer in their power purchase agreement, PPA.

The industry claims that PPAs are commercial-in-confidence and so the myth of renewable energy lowering electricity prices is allowed to continue. In reality, the PPAs are setting the retail price of electricity generated by wind turbines at three times the price of fossil-fuel generators. In one example of a PPA, the electricity retailer was buying wind energy at $32 above the wholesale market price, resulting in a payment of $40 million per year more than it would otherwise have to pay for electricity. This amount is added onto consumers' bills, with a further retailer's margin typically between seven and 10 per cent. This increase in the retail price of electricity could be as high as 200 to 300 per cent. According to then Senator Boswell, during a Senate estimate hearing of 27 May 2010, Grant King, of Origin Energy, a very big player in this sector, said:

Aspects of RECs, such as the need to build thousands of megawatts of gas power to back up wind at a cost of billions, and expenditure on connecting wind farms to the grid will be a major factor in power price increases over the next decade.

He then said:

It could be two to three hundred per cent.

When you study the states of Australia that have had dramatic increases in their household power bills in recent years you will find a direct correlation to the number of wind turbines that have been connected to the grid in those states. You will find the same correlation in European countries.

No-one in this great house will talk about the economic effect of this amending legislation. I am one of the few senators who are in a position to do so. The coalition government find themselves in a conundrum. They have buckled under pressure from the wind industry to negotiate a deal with the ALP on the reduction of the target. Some say that this reduction will see up to 2½ thousand new wind turbines, built across prime agricultural land in Victoria, NSW, Queensland and South Australia. That is more than twice the number of turbines that we already have operating. This amending legislation is designed to give the financial sector some investment certainty, which the industry has been so desperate to provide. But at what risk? The financial risk is very significant. While some debt financiers will be sensible enough to recognise the regulatory risk involved in going forward with this technology, the safety of which has been questioned in a pilot study commissioned by Pacific Hydro, I fear our Clean Energy Finance Corporation will not be one of them. The CEFC was designed by the Labor government to increase investment in renewable technologies, to the tune of $10 billion.

The coalition government therefore finds itself in an unsustainable position where it is supporting the continuation of an outdated scheme that will inevitably collapse. In 2000, the Howard government, unquestioningly, introduced the REE Act, which was concocted by some of the greatest financial magicians in our history. This financial rort was then supported throughout the Gillard government years and was strengthened by the establishment of the CEFC, ARENA and billion-dollar-deals with Chinese wind turbine manufacturers.

The amendment will now follow one of two paths: option 1 is that it will not be supported by my Senate colleagues, in which case the target will stay at 41,000 gigawatt hours, which will activate the $65 shortfall penalty charge in 2017. This, coupled with the REC price, will leave consumers with an effective $93 carbon tax, paid for by consumers in their household electricity bills.

The electorate of Australia have already voted down a $28 carbon tax, so the threat is clear: the coalition government may lose the next election based on this amendment under the directive of the Minister for the Environment. Or option 2: the amendment will be supported by the majority of senators and will pass, thereby setting a new target of 33,000 gigawatt hours—a level which will see the construction of up to 2½ thousand new wind turbines, which will create such havoc in our electorates and rural environments that there will be widespread community outrage.

To satisfy a new 33,000 gigawatt-hour target, 495 million RECs will have to be surrendered by electricity retailers. This will lead to a shortfall of 240 million RECs, as only 16,000 gigawatt-hours will be available annually, and only 256 million RECs will be available to satisfy the LRET's remaining 495 million megawatt-hour target, set under this politically deceitful amendment. When the shortfall charge is triggered and the REC price goes up to $93, the total cost is added to power consumers' bills and will top $46 billion. A wind turbine operates, on average, only 27 per cent of the time—when the wind blows. There are 8,760 hours in a calendar year. Therefore, at 27 per cent, a three-megawatt turbine will generate $659,985 in subsidies per year. If you use the industries claimed 35 per cent capacity factor, each turbine will generate $855,414 each year. That subsidy is paid annually until 2031. Each three-megawatt turbine can generate a total of $13.5 million over the remaining life of the LRET scheme.

The RET subsidy, including small-scale solar, has already added $9 billion to Australian power bills. At the end of the day, retailers will have to recover the total cost of the RECs issued, and the shortfall charge, from Australian power consumers. No matter if this amendment is supported or not, each and every Australian household will pay a $93 carbon-tax-equivalent in their power bills, increasing bills by up to possibly 300 per cent. It is, without question, obvious that the imposition of what is a $45 billion retail electricity subsidy is going to have an adverse economic consequence for industry, small business and households alike. In my home state 34,000 homes were disconnected from the electricity grid because they could no longer afford to pay their power bills. The imposition of the coalition's electricity tax will naturally lead to tens of thousands more families attempting to live without power.

The situation is mirrored in other states. Electricity has gone from being a basic necessity to a luxury good for many hard-pressed Australian families. While certain members of the coalition government claim that the RET scheme is family and business friendly, perpetuating the wind industry line that it carries with it no significant cost to power consumers, the efforts to exempt energy-intensive trade-exposed industries reveals that argument to be a lie. This is deceitful. If there is no cost to power consumers from the RET scheme, then why the need to exempt energy-intensive industries such as aluminium smelters? It is simply policy hypocrisy. At some point this parliament will act to properly control the operation of wind farms by placing conditions on access to subsidies. The potential for that kind of regulation is a detrimental point of risk for bankers and investors.

12:25 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

I rise today to make some comments in relation to, in particular, my home state of Tasmania and the renewable energy target changes that are being proposed in this legislation. It is interesting that Tasmania is 86 per cent generated, in terms of its hydro and other clean energy sources. I know South Australia is close to catching up, but we have had a dominant position in the market in generating clean energy, and that is why the clean energy package that both Labor and the Greens delivered—obviously the position of the Greens in the balance of power helped get us a price on carbon—has been a boon for Tasmania. Because we generate clean power and those businesses did not pay a carbon price, they got to keep the increased margins when they sold into the National Electricity Market. The money that has been generated by clean energy in Tasmania has been essential to providing services to schools, to paying for our healthcare workers and nurses, and for our essential services. The dividend paid last year from Hydro Tasmania to the Tasmanian government was $260 million, from the price on carbon. There was more money prior to that and hundreds of millions of dollars more were forecast. That is gone.

Senator Lambie talked about the job-destroying, wealth-destroying Greens in her previous speech. I want to highlight that she voted against the carbon price. She voted for its removal and the damage that has done to Tasmania. Not only did it directly take revenue out of the coffers of our Treasury, where it is most needed. It also put sovereign risk on the table. It also introduced significant risk into future expansion plans for Hydro Tasmania. The only thing Hydro Tasmania has left going for it is the renewable energy target, which she is also going to attempt to dismantle. Hydro Tasmania has said they could cope with the loss of the carbon price, because that really was something that was flowing straight to the government and the people of Tasmania, but the renewable energy target was essential for the future.

I want to read some job statistics, because it seems that Senator Lambie has been listening to the big dirty polluters in Tasmania. I have been to visit them. For example, I spent a day at Comalco in Bell Bay. I met the management and the workers and I had a very enjoyable day. We agreed to disagree on many things, but I listened to what they had to say and they listened to what I had to say. It is clear to me that they are doing their job. They are trying to make more money for their shareholders. They are trying to get the lowest price possible for the power and electricity they use in their operations, as they always have, and they continue to put pressure on the Tasmanian government and the federal government to get as many subsidies as possible. This is what big business does to maximise payments to its shareholders. Their objective is clear and my objective was clear. I said that all polluters should pay for their pollution.

That is the fundamental principle that my party stands for: if you pollute, you pay. Someone has to pay for the externality that is produced by polluters such as Comalco. If they do not, if they keep getting out of things like renewable energy target commitments and carbon prices—which they would never have paid anyway—then the Australian taxpayer has to foot the bill, because someone has to pay for this pollution if we are going to actually do something about climate change.

I went and visited Comalco. I have seen their website and their lobby group's propaganda—and that is what it is. It is propaganda. It has been thoroughly debunked by people such as the Australia Institute. But Senator Lambie stood in here today and regurgitated it, ad nauseam, straight from the website of the biggest polluters in Tasmania, who, incidentally, are among the biggest, wealthiest companies in the world, yet they do not want to pay a measly fee for their pollution. What they do is put pressure on people like Senator Lambie, saying: 'Help us. We're not wealthy enough. We're not rich enough. We can't afford to pay for our carbon pollution.' Well, they can. We boiled it down in our discussion with Comalco management. I asked, 'Why should you get out of paying for your pollution,' they said, 'Because we employ people.' I said, 'If we adopted that logic, we would be back to the days of the Industrial Revolution,' which, interestingly, Senator Lambie talked about. We would be back to the days of the Industrial Revolution, when everybody dumped their crap in the river and polluted the atmosphere. We have come a long way since then. Everyone needs to pay for their pollution.

Let us talk about pitting jobs against jobs, employment against employment, because that is exactly what Senator Lambie is doing. She is, apparently, putting the jobs and the security of jobs in the old, dirty industries, like Comalco's, ahead of the jobs of workers in the renewable energy sector. In fact, in the electricity sector, modelling by several organisations forecast continued growth in renewable energy, in clean technology, over the coming decades, right around the country. Austrade believes current renewable energy targets in combination with other elements of the clean energy package which have now been removed—including a price on carbon—would have delivered $20 billion of investment in renewable energy. The Australian CleanTech Review 2013 estimated that at least 53,000 Australians were working in the renewable energy sector, with strong growth since 2009.

In Tasmania, where 86 per cent of its renewable energy is generated from sources such as hydro, the Clean Energy Council's own report in 2010 forecast the number of renewable energy jobs in Tasmania to grow from 737 in 2010 to approximately 3,007 by 2020, in five years time. The Climate Institute are a little bit more conservative, but they predicted the creation of 1,329 new jobs in renewable energy in Tasmania in the next 15 years. These are new jobs. These are jobs being driven by innovation, by investment in technology. These are the kinds of jobs in which my state can be a world leader. We are already a world leader in so many areas around clean energy. This is a competitive advantage for Tasmania, and this is something the Greens delivered to the state of Tasmania that is seldom acknowledged by people like Senator Lambie in their constant rhetoric about the Greens not having any ideas. Well, guess what? We delivered a windfall to our state. We delivered jobs. We delivered a new direction in an area in which Tasmania could have a competitive advantage.

I recently drove a Tesla. The people who were showing me the car told me that this kind of electric car is going to become affordable in the next five or 10 years. It is expensive now, but they estimated that these kinds of cars would have a price of around $22,000 or $23,000 in the next five years. For those of you who are not aware of this, they have also brought in new battery technology, around $3½ thousand for households, that means you can generate your own electricity and store it. You can store it. You can alternate consumption and flows at different times of the day with other simple technology. You can charge your car. You can even use the battery charge in your car to recharge your house. This is a disruptive technology. In 10 to 20 years time, it is possible that grids could be redundant, in many senses. We are still going to need grids; they are still going to be very useful tools for us, especially for large-scale renewable energy generation. But do not underestimate the disruption that new technology is bringing not just to the actual processes and utilities of electricity but also to the consumption habits of those who use electricity.

It is an economic pipedream, it is a false hope and, to many in Tasmania who care about the forests and our ecosystems, it is a phantom menace to hold out the idea that burning logs or biomass, forest furnaces, will somehow provide thousands of new jobs in the Tasmanian forestry industry. We already have trouble selling our clean energy into the National Electricity Market. There has been significant pressure to get a second Basslink cable to provide more capacity. The big, threatening bullies, the big polluters, are always talking about leaving if they do not get what they want. The risk of huge oversupplies of clean energy in Tasmania are very real. But, suddenly, people like Senator Lambie are once again swallowing hook, line, and sinker the propaganda of the forestry industry, when she comes in here and says we are going to create thousands of new jobs by burning native forests in forest furnaces. Who is going to invest hundreds of millions of dollars in these plants when the world is already facing and talking about disruptive technologies that could make large-scale baseload electricity generation redundant?

Those technologies are what we are looking at, and they are exactly the kinds of things that would be useful in Tasmania in terms of people being able to go off-grid if they wanted to; generate their own power and store it; and have cheap, affordable vehicles to drive that do not rely on burning any dirty fossil fuel, be it wood, be it coal, be it gas or other hydrocarbons. This is the future. This is the future we are facing. In dealing here with the RET, I have heard very few people discuss where we are going with technology, even though technology does not stand still. It is academic, really, for forest furnaces to be included in the renewable energy target.

I wanted to make it very clear here today that, for my home state of Tasmania and right across the country, especially in states like South Australia that are really catching up to Tassie in terms of their power generation in a whole new suite of exciting battery technologies, as well as solar thermal plants, this is the future

This creates new jobs. For those in areas like the forestry industry who may have lost their jobs, this is where we will find the new jobs. We need to transition our economy. We need to do it because we actually need to take serious action on climate change. It is no good mucking around with targets. Even the targets we have in place now are not enough to make an impact. In that sense, Senator Lambie's cynicism about man-made climate change has an element of truth to it, if we do not take strong action, if everyone in here is thinking about weakening renewable energy targets.

We have already pulled the rug on a pricing mechanism that helped us reduce emissions, being the clean energy price, we are trying to reduce funding to the Clean Energy Finance Corporation that is making a $25 million profit for the Australian taxpayer and financing a whole range of new technologies, including battery technology, as we are providing finance packages for Australians to go off grid. Why wouldn't you generate your own power from the sun or from wind and then store it at home and charge your car? Tesla goes up to 600 kilometres depending on the type of typography you are in—around 400 is the average. That is not bad for an electric car. You can get home and recharge your batteries from stuff that you have generated for free while you have been away at work during the day. This is the future. We have to get real about this and we have to think. With large projects like Woolnorth in the north of Tasmania and the new developments that are occurring in wind power are also very important to Hydro Tasmania, as are combinations of wind, solar and even tidal energy in places like Flinders Island, replacing the diesel subsidies in place for those couple of islands in Tasmania.

Senator Lambie has swallowed hook, line and sinker the rhetoric of the old industries—unsustainable native forest practices and the big dirty polluters in Tasmania that are always looking to make a buck at the expense of the Australian taxpayer. We have to be thinking about the industries of the future. That is why we cannot afford to weaken the RET. In fact, we need to strengthen it. We cannot allow the burning of native forests as biomass to be given credits in this RET scheme, because it will already make an unprofitable business an unsustainable business, and it will hold out false hope to those in the forestry industry that see this as their future. As usual, the Greens will be the party in the Senate and in the parliament standing up for the environment.

12:40 pm

Photo of Ricky MuirRicky Muir (Victoria, Australian Motoring Enthusiast Party) Share this | | Hansard source

I am happy to be finally standing here to speak on the second reading of the Renewable Energy (Electricity) Amendment Bill 2015. I will start by making a positive mention of the great geographic locality we in Australia are gifted with. Unlike many other countries around the world, we are lucky enough to have a coastline stretching right around us. We have an abundance of sun and heat, with a lot of barren land that can be utilised to create renewable energy into the future. As controversial as it may be, we also have wind—a lot of it. And it becomes clear when speaking to a few people in these halls!

There are projects like LMS Energy that extract methane from old tip sites. By burning the methane and creating energy, the methane is reduced to carbon, which is 15 times less damaging to the environment than what it is in the beginning as methane. I was proud to support the retention of ARENA, and I believe that funding into projects such as wave energy are a huge step into cleaner alternatives than fossil fuels. I have been a consistent supporter of the Clean Energy Finance Corporation as I strongly support the assisted funding to help businesses step into less energy-intensive practices. Simple measures such as replacing seals in industrial freezers help reduce the energy usage, right through to projects such as installing solar on rooftops and converting to LED lighting.

Since taking my seat in this Senate, I have been a public supporter of the original 41,000 gigawatt hours as it was originally planned to achieve. However, due to the nature of the bill being dragged out, I also understand that, at that rate, it would be much harder to achieve now than what it would have been if the bill had maintained the bipartisan support that it originally had. I recognise the concerns many people have raised with my office in relation to the inclusion of native forest wood waste. And I will get back to that issue in a minute.

I will not be supporting any amendments to the legislation that do not have the support of both the major parties as I do not want this bill to be sent back to the lower house with amendments. I believe this will give some people in government an excuse to delay the deal that has taken so long to achieve already. From day one, I have said that we need bipartisan support. We saw bipartisan support in the House of Representatives, despite woody biomass. And I expect to see the ALP sitting with the government, regardless of whether or not their amendments to the removal of woody biomass are successful. I want to make it clear that my decision does not mean that I think the Senate should be a rubber stamp. However, when it comes to renewable energy policy in this country, enough is enough. Let's get it through and restore investor confidence to any industry that employs thousands of people both in my state of Victoria and throughout Australia.

I want to go back to the inclusion of biomass. On 11 February, during a matter of public importance, I stated that I do support minor amendments such as extending the exemption to energy-intensive industries to 100 per cent and recognising wood waste sourced from sustainably managed forests as an eligible source of renewable energy within the RET. This has already happened in the lower house. There has been a lot—and I mean a lot—of misinformation spread around, high and low, in relation to the inclusion of woody biomass from native forests. Firstly, I want to start by pointing out that this is not a new suggestion. As a matter of fact, for 10 years it was included in the Renewable Energy Target. Despite outright lies from the Greens and now Labor—or certain factions of it—and extreme environmentalists, it did not lead to one extra tree being harvested. As a matter of fact, it only led to one REC being handed out.

I have received many emails and phone calls from constituents who are gravely concerned about the so-called destruction of our native forests—and rightfully so. It is not their fault that they are being misled. However, their concerns are about issues that are not necessarily related to the inclusion of woody biomass at all. The inclusion of woody biomass is to include by-products of current harvesting operations as an eligible source of renewable energy in the target—by-products of current harvesting operations, not new harvesting operations. We are speaking about a by-product that will rot and break down, releasing carbon or methane into the atmosphere, as it currently does if it stays untouched. We are speaking of utilising a by-product of current harvesting projects; we are not speaking of cutting down a single extra tree, not one—

Debate interrupted.