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Environment and Communications References Committee
(Senate-Wednesday, 22 February 2017)
CHAIR (Senator Whish-Wilson)
Dr van der Kallen
- Ms Barham
Content WindowEnvironment and Communications References Committee
Retirement of coal-fired power stations
BARHAM, Ms Daisy, Campaigns Director, Nature Conservation Council of New South Wales
PALESE, Ms Catherine Blair, Chief Executive Officer, 350.org
SMITH, Dr Bradley, Senior Climate and Energy Campaigner, Nature Conservation Council of New South Wales
Committee met at 10:03
CHAIR ( Senator Whish-Wilson ): I declare open this public hearing of the Senate Environment and Communications References Committee in relation to its inquiry into the retirement of coal fired power stations. I welcome you all here today. This is the third public hearing for this inquiry and a Hansard transcript of the proceedings is being made.
Before the committee starts taking evidence, I remind witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence. The committee prefers all evidence to be given in public, but, under the Senate's resolutions, witnesses have the right to request to be heard in private session. It is important that witnesses give the committee notice if they intend to request an in camera session. In addition, if the committee has reason to believe the evidence about to be given may adversely reflect on another person, the committee may also direct that evidence to be heard in private session.
If a witness objects to answering a question the witness should state the grounds on which the objection is taken, and the committee will determine whether it will insist on an answer, having regard to the ground on which it is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may, of course, also be made at any other time.
I now welcome representatives from the Nature Conservation Council of New South Wales and 350.org Australia. Information on parliamentary privilege and protection of witnesses and evidence has been provided to you. The Nature Conservation Council of New South Wales and 350.org Australia have both provided submissions, which are on the committee's website. They are submission 50 and 19, respectively. I invite 350.org to make a brief opening statement and then the Nature Conservation Council to do so.
Ms Palese : We are really honoured to be here. We are very happy that someone has taken the time to look at what has really been an issue ignored, but is one that is pivotal to our making the transition from fossil fuels—coal, in particular—to clean energy. We know it is coming. We have made commitments in Paris that are very specific. Currently, we have no national plan for how to make that transition. We have been playing a lot of dangerous politics around climate change, in particular, and energy sources, and really working to confuse the public about the transition that is needed and what it will take to make that transition in a way that will help not only consumers but energy security and protection for our economy long term in a low-carbon world.
I am just here today to tell you a few things that worry me deeply. One is the climate impacts that we already seeing around the world—in particular, peeking at 1.38 degrees Celsius of heat consistently around the world, which means that that amazing, lovely idea of a target of staying below 1.5 that we discussed in Paris is becoming ever more unlikely for us to be able to maintain and stay under in a healthy climate. We know what we need to do to address climate change and to reduce our emissions here in Australia and around the world. We need to make the transition in an orderly fashion from fossil fuels to clean energy, such as wind and solar, which is now becoming so cost-efficient, and battery storage becoming so effective, that what we need now is a way to integrate that into our energy system so that we can get off one, come on to the other, minimise the impact of that on communities and on the public. We need to find our way to do that without the political football game playing that we have seen in Australia, certainly in the last three to four months.
I would like to point out the fiction of the idea of clean coal, in particular, as a solution. Painting coal as a solution is simply not the way the world is going. We have the technology. Australia should be a leader in renewable energy. We have been over the years despite multiple occasions of the government turning and shifting, pulling the rug out from under an industry that should be up running and succeeding globally. We are looking at a limit of 942 gigatonnes of CO2 if we burn just what we have today. That means that no new oil, coal and gas can be pursued in Australia. And what we have been recommended globally by experts post-Paris is the immediate plan for a phase-out that will roll back our most polluting sources of coal, oil and gas, and here in Australia our coal-generated energy is certainly where we have to work and focus.
I would just like to point out very quickly that the stark relief to those words—'no new coal, oil and gas'—stand next to a federal government that has been out promoting clean coal and carbon sequestration, both of which are things known by the industry not to be either cost effective or effective at reducing emissions. And we are promoting the likes of things like an Adani coalmine, which would be the largest coalmine in the southern hemisphere. To think about new coal now is an insane concept when we see the impacts we have already seen around the world and in Australia. Just the warming that we have seen so far include: four states hitting heatwave levels in the last two weeks or three weeks at 47 and 48 degrees Celsius; only seven per cent of the Great Barrier Reef not being impacted by ocean warming, meaning that the majority of our reef is already being impacted; bushfires, drought and extreme storms—and it is becoming the norm nationally. We need to take action not just because it is the right thing to do environmentally. But, economically, we are not preparing ourselves for what is coming in the low-carbon world. To play a role in our region as a leader in clean energy we need to take the opportunity to transition from one to the next in an orderly fashion.
We, 350, like to recommend three very specific solutions to our problem, which I am sure all of you have heard before and considered. We need a market mechanism that prices carbon and allows the market a way to make the transition that is cost efficient and that levels the playing field for all energy providers. We need a mandated coal plant closure date of less than 30 years that will give us the opportunity to phase out our most polluting plants. And we need a repower plan that is not gas, that looks to upping our take-up of renewable energy very rapidly.
Our problem is not technological. What we are lacking at the moment is the political will to stand up to the fossil fuel industry and make the transition that we know we need to do. Thank you to having me today. I hope that you will recommend strongly that we take action, that we see ourselves stepping up at leaders on environmental issues such as climate change and that we can see the economic opportunities here in Australia and lead the way in our region to become a climate leader and not a climate laggard.
Ms Barham : Thank you very much for being here, Senators, and your interest in is really important issue. I would like to acknowledge that we are on Gadigal land today, and I thank the Gadigal people for how well they looked after this beautiful place for such a long time. As Blair has alluded to, we know that we are already feeling the impacts of climate change through heatwaves, droughts and increased bushfires here in New South Wales. There has never been a more urgent time to get going on the urgent transition out of coal- and gas-fired electricity. There are a few points I would like to raise and then I look forward to your questions.
Firstly, the lack of political leadership on rebuilding our energy system to a clean and renewable one is stark, perhaps nothing starker than we have seen in the last few weeks. The existing array of coal-fired power stations, which provide approximately 85 per cent of New South Wales' electricity, were built by our government because the challenge of supplying a safe, affordable, reliable energy is not able to be, and should not be left solely in the hands of the market. We are really seeing the reality play out before us of the market being unable to provide the security, reliability and emissions solution that we need. That is why it is so urgent that the federal government is working with the state, such as here in New South Wales, to upgrade our energy system to 100 per cent renewables with storage by 2030.
Here in New South Wales our fleet of coal-fired power stations are old and dirty. The average age is 34 years old. most of our power stations were built in the 1970s and 1980s and they really are coming to the end of their lives soon. The next term of government here in New South Wales and federally will likely contend with two power stations closing here in New South Wales within the next term of government. If stronger action on climate change is taken, as of course it needs to be in line with what see leading scientists predict, all of our coal-fired power stations will be closed by 2030. That, of course, is on top of the three coal-fired power stations which have closed here in New South Wales in recent years. We are truly in the middle of a energy revolution, but it is being run mostly by the households and corporates of Australia, with the federal government completely missing in action.
Many of us will remember that just a few weeks ago our energy demand exceeded supply, which resulted in the Tomago aluminium smelter having to withdraw 300 megawatts of load for a few hours, and of course the wholesale price spiked. While solar and wind only make up at tiny 4.4 per cent of generation here in New South Wales, both of them really helped enormously to avoid blackouts across the state. Meanwhile, looking at Liddell, our oldest coal-fired power station here in New South Wales, half of the units at that power station, as well as two gas plants, were switched off during the peak due to technical problems and the high price of gas. So we really did see renewables, even at only 4.4 per cent of our generation, playing a really important role there. So imagine what the potential is if we were to boost that, as we need to.
We know that Liddell is due to shut within five years, although it might be sooner if the Tomago aluminium smelter closes soon. Vales Point will likely close down shortly after. The owners are hoping to keep it open to 2022 if coal is still needed in the market by then, and its technical life is 2026. So those two coal-fired power stations, even without government intervention, are due to shut very soon. So in order to plan and prepare for these coming closures we need policies that will rapidly scale up for both renewable energy and for the storage that we all know is so important.
The rate of installation of solar and wind has to double in order to fill the supply gap that will be left by the closure of Liddell alone. Existing generation of wind and solar in New South Wales must double just to fill the gap left by Liddell. A much higher rate is needed if governments are serious about pushing down the wholesale price of power and of course acting on climate change, which is such an important imperative. I would like to draw your attention to the need to ensure that the burden of this transition is not carried by the workers in the communities affected by the closures, but that those communities and individuals get the support that they deserve. We recommend the establishment and funding of a transition process which is led by the workers, particularly at Lithgow, in the Hunter Valley and on the Central Coast here in New South Wales, to support those who are affected and to harness new sources of regional development and employment.
The final point I would like to raise is health. The health impacts of coal-fired power station are little considered. It is particularly concerning due to the health impacts of many of the common pollutants from the power stations, such as mercury, arsenic, sulphur dioxide and fine particle pollution. This is particularly so when we consider that the coal fired power stations here in New South Wales are close to hundreds of thousands of residents who live near the power stations. The Nature Conservation Council recommends that an independent assessment of the health impact of each of Australia's coal-fired power stations should be conducted, so that the health impacts on communities can be understood and addressed and can inform the planning process. Simply understanding the health impacts is not enough if we are not prepared to act on them and shut down the coal-fired power stations. I am really pleased that you are here as there will be other speakers with much more information on health a bit later on in the hearing today. I refer you to the five recommendations that we made in our submission, which I will not read out here, but hopefully you will take those on board.
CHAIR: Thank you for your opening statements. As a matter of interest, Ms Barham or any of the other witnesses, are you aware of any of the owners of these power stations doing their own assessments of the liabilities associated with health impacts?
Ms Palese : Certainly in our meetings with the big three energy companies—AGL, Origin and Energy Australia—all three are highly aware that inevitably they will have to phase out coal. They are looking at dates and how to do that. They have looked at both risk and liability associated with extending those lives and how energy will ultimately be provided to their own customers without a transition plan into what next and how to boost the quantity of energy they are going to need as these old plans come off line. We would divide on where the date of closure should be: they would like to push out, in some cases, well beyond what I would consider to be a safe level. Therefore, that government intervention of setting a level playing field and assisting them to speed up those dates is really critical.
CHAIR: I will ask it again in a slightly different way. In relation to the health impacts specifically, I understand that that relates to what you are saying, but companies are usually very good at managing risk and liabilities because it affects shareholder profits and ultimately their reputation and other things. I am interested if you are aware of whether they themselves have tried to quantify these risks or whether there has been legal action taken against them because of damage to health in the area surrounding their power stations?
Dr Smith : I think there may be witnesses later today that are more familiar with those matters. I would suggest asking that question of Environmental Justice Australia and probably Mike Campbell, who have been dealing with those issues for a while. Our understanding is that the companies do report every year on the quantity of pollution that they admit, so how much mercury, sulphur and so on they are putting into the community. We know that those pollutants have a big health burden on the population. For example, 18 per cent of the fine particulates in Sydney are from power stations in the Hunter Valley. In New South Wales there is no regulation of the intensity of the emissions that these power stations are emitting. In other jurisdictions, like in the US, they have limits per megawatt hour on how much mercury and how much sulphur dioxide they can emit. The power stations in New South Wales exceeded those limits by many times—for example, over three times for mercury. My understanding is that the power stations are licensed to make those emissions, so they do not see that they have liability. Other witnesses may have more information.
CHAIR: My other question was directly to you, Blair: in your submission, under the section of 'An ageing and dirty coal fleet', one of the points you have listed is that:
There is considerable excess capacity (16%) in the electricity generating system, a significant impediment to further renewables uptake;
Presumably that is across the Australian system.
Ms Palese : That is right, yes.
CHAIR: Lately there seems to be a lot of media saying that we do not have enough capacity, and we are having all these issues. Would you like to comment on that.
Ms Palese : Sure. That raises a really important issue: under climate change, extreme weather—heat et cetera and storms—put an incredible burden on the electricity system that we have. South Australia is a case in point. Part of the national plan that we need has to take into account preparing the supply that we have for extreme conditions, as well as overcapacity. That is a levelling out, if you will, and looking at weakness areas where we need to bolster up the amount of energy we have—battery storage et cetera—and where we have too much and it makes no sense, for instance, to quickly move toward that area.
The other important point to make in regard to capacity, I think, is that one-third of our emissions is coming from electricity generation, mostly through coal and some gas. It will be most difficult for us to reduce emissions in agriculture and transportation. It is this area of electricity where we have the ability to play with how we structure it, where we look at the needs and how we fulfil energy under all conditions, but only if we have a transition plan that manages that nationally.
Dr Smith : I have a couple of follow-on points on the New South Wales capacity. Our submission, I think, was written before Hazelwood announced that it was withdrawing from the market, so that obviously changes the capacity situation. The other point is that, in New South Wales, the heatwave we had was a one-in-240-year event—well, it should have been a one-in-240-year-event, but climate change meant that the likelihood increased to one-in-120-years. Like Blair said, we are seeing greater strain put on the system. That is why we are recommending increasing the installation of renewable energy and also rapidly investing in storage.
Senator RHIANNON: I was after some details about the power plants in New South Wales. Do you know what the rehabilitation bond is for Liddell, or do you have any information on that? Or perhaps you could take that on notice.
Ms Barham : We can take it on notice. I do not know; there was certainly an interesting newspaper story this morning in the The Newcastle Herald. You may have seen that.
Senator RHIANNON: We can come back to that, because there are lots of questions. I was also after any more information about the three recent penalty notices issued to AGL. Can you give me some background on that.
Ms Palese : There have been three, and a range of different things as well as water quality issues—air quality issues and some other environmental violations of existing regulations. They are operating three of the oldest and most polluting power stations in the country. The writing is on the wall for those stations, and we are going to see more and more of these kinds of things until, really, they are directly given a notice of how quickly they can, and should, pull these power stations offline and begin to plan for the transition.
Senator RHIANNON: I suppose that precisely goes to the issue about having a planned transition, and why we need to start that now?
Ms Palese : Yes, and the health impacts, as well. Certainly within the community around that power station and the three in particular, you are seeing health impacts because of these kinds of violations. They are becoming run-of-the-mill because of the age of these plants.
Dr Smith : There was also a recent breach of environment conditions at Eraring, the station which is owned by Origin, on the Central Coast, when ash basically blew off their ash dam—the ash dam dried up and ash blew off into the local community. There are 200,000 people who live close to that power station, so it is a particularly sensitive area for those kinds of problems. We saw similar problems happening in South Australia at one of the power stations that is closed there. The ash dam is not being managed, so this toxic ash is blowing into the community.
That is certainly an issue that we think needs to be dealt with in a transition plan; so assessing what are these liabilities and how are they being managed. Ash is a huge liability. If you to up to the Central Coast you will notice there are ash dams dotted all over the place, and they are quite large in area. Finding a way to manage those in the long term is a difficult problem, and we are concerned that the liability for that problem is going to fall on New South Wales taxpayers.
Senator RHIANNON: I notice that you state that Eraring power station has the highest amount of fine particle emissions in New South Wales. Were you referring to all power stations there, or to any source at all within New South Wales?
Ms Barham : I think that was for all of the power stations in New South Wales.
Senator RHIANNON: Okay, thanks. I just wanted to check on that. I am interested about the aluminium smelter at Tomago. Why do you think that may close soon? Do you have any further comments on that?
Dr Smith : The Tomago aluminium smelter is at the whim of the international commodity price for aluminium, and obviously there is pressure on Australian aluminium smelters. The Tomago smelter seems to be profitable, but its contracts for electricity expire this year—in 2017. Since 1991 it has had a contract with the then state generator for electricity, and it is estimated that the state generator included a subsidy of, at the time, around $8 per megawatt on their electricity to help bring jobs into the area and so on.
Now, of course, the power is being generated by a commercial entity. AGL Energy have that contract. Our understanding is that AGL Energy have not given a similar subsidy and that the price for electricity in their new contract means that their revenue per tonne of aluminium has more or less halved from just over $500 per tonne to around $250 per tonne. Their power prices in relation to their production have increased by $280 per tonne of aluminium. That is going to put pressure on the plant, and, although it is viable at the moment, if the aluminium price changes then anything could happen. I suppose what we have seen with other power stations is that we do not know when they are going to close down. The history in Australia is that they have closed down earlier than they planned. We think that we should do better than that for those communities, and we should have a plan.
Senator RHIANNON: Considering that at both state and federal levels, sadly often irrespective of who is in power, we have seen the plans are not being drawn up, and because this is a conversation that has been going on for 10 years, is there anybody who you are aware of or is a part of your work, because obviously it is a huge job, that is actually coming forward with a plan in terms of when these power plants should close? Is there a planned transition? Is anybody doing this?
Ms Palese : Some of the various think tanks that have looked squarely at price on carbon in particular have modelled some of the impacts of what that would have. Jonz, I think, did a particular study about costing, and that does lay out for you when these things become cost inefficient and therefore should be rolled back. I can submit that if you like. It is really worth a read. It is an excellent bigger picture look at what we can do and how we can price it to make it practical for the country nationally to begin a transition plan that would make a real difference.
Senator RHIANNON: That would be invaluable. Is it for the country and not just for New South Wales?
Ms Palese : That is right. It is the national plan.
Senator RHIANNON: Fascinating. I did not know about that.
Ms Palese : Yes, I will send it in.
Dr Smith : I just want to say that I think there are some things we know and some things we do not know. In terms of things we know, we need more renewable energy capacity now. We know that we need more storage—for example, pumped hydro, solar thermal with storage or even batteries. Those are things that we believe the government needs to be finding ways to incentivise right now with no delays. It will take a few years for plans like that to get up and running, depending on the technology. We know that we have a coal plant closing in five years, so why do we not already have that plan? Other parts of the plan relate to the dislocation of workers and so on. That work needs to be done on a really local scale because Lithgow is a very different place to the Central Coast, which is a very different place to the Hunter Valley. That is why we think that process needs to be led by workers and communities.
Senator DASTYARI: A lot of what I was going to ask about has been covered. Dr Smith, Ms Barham and Ms Palese, thank you so much for being here with us today. We have received a fair bit of evidence, and we have travelled around the country. There seems to be a handful of different types of arguments that have been presented to us. Again, I am probably summarising what are going to be much more complicated and detailed presentations. But there are those who have argued that we should go straight to renewables now, there are those who have argued that we should try and use something like gas as a transition and there are those who have said that we should create some kind of a market based incentive to have coal power stations reopened or new power stations opened. That maybe does or does not involve enlisting clean coal, which, to me, sounds like a clever marketing name. I wouldn't mind if you could touch on that. We have fallen right into the middle debate which has been going on for a while but has really heated up—no pun intended—because of weather events.
Ms Barham : I will briefly touch perhaps on gas. Traditionally, gas has been spoken about as a transition fuel. That probably started 20 years ago when renewables were much, much more expensive than they are now. We have seen the cost of renewables really crash, which is fantastic for generating the large-scale projects that we need to make the transition to clean energy. Gas is not a transition fuel anymore. Gas is really expensive. We have certainly seen that in South Australia. We know that gas is really pushing up electricity prices—
Senator DASTYARI: Sorry to cut in. There is that argument that maybe you should have a domestic reserve of some kind. I know there has been a campaign. I know Alan Jones in Sydney is quite strong on that, and there others. I am just saying there other ways of affecting the price.
Ms Barham : Yes. If we look at this from the climate perspective—
Senator DASTYARI: Yes, that is why you are here.
Ms Barham : Yes, this is why we need to make that transition. Gas is still a fossil fuel. It does still have significant carbon emissions whereas we know that renewable energy does not have those carbon emissions. So we are strongly advocating that we skip straight to renewable energy, as we have seen so many other parts of the world do, and even states in Australia are really investing in renewables. We do not need gas.
Ms Palese : Similarly, the price question of gas is a really critical one. It is quite transient up and down based on international market standards. We cannot control that even if we try hard. Price-wise it does not compete in anyway with solar and wind, if you had a national strategy that could look at how you would use battery storage and other systems to integrate into a system that would function particularly where you have weaknesses, greater demand et cetera.
Secondly, when you look at investing in more gas, you are looking at 30 to 40 years of fossil fuel infrastructure, and that is expensive. When you add those two things up, to be honest, if you put a market mechanism in place, gas would not be in the mix. It would be very quickly moved out because it is just too costly to install a whole new system and the gas itself is expensive.
Senator DASTYARI: There has been lots of talk in the past few weeks about clean coal technology, whether it is real or not, as some form of transition or a way to carbon capture. The terms have been bandied around for decades. I initially thought it was my lack of understanding of what they meant, but then I found out that no-one knows what they mean. Could you touch on that.
Ms Palese : There was an excellent article in The Financial Review last week that looked at cutting-edge type of 'clean coal' systems out of Korea. The very owner of the company says it is neither cost effective nor will it reduce your emissions. I am happy to send you the article. It was in detail—megawatt hour, amount of emissions, cost plus impact. I would hazard to say that it is a fairytale story of looking for a fossil fuel based solution to what cannot be solved that way, and it is a marketing spin that makes it look like that there is an easy solution when there is not. What we need to have now is an integrated system that is complicated but doable and we have seen it work the world over. Europe is moving very rapidly to this.
If you look at Europe, Scandinavia, Germany, Spain and the UK, they have all had days when they have hit 100 per cent of power usage in their country through renewable energy, often off-season in winter. If Europe can do it, what we are really saying is that Australia technically is not up to the challenge. I offer to say, no, vested interests in fossil fuel have gotten in the way over the last 20 years from helping us get to that point where we could really cost-effectively look at the best options and then go to them.
CHAIR: I have read The Financial Revieweditorial this morning that was talking about all the issues we are discussing today and it did not escape my attention that they mentioned that what is missing is a price on carbon. So it was interesting that they did actually realise that.
Senator DASTYARI: We tried that and they were really supportive!
Ms Palese : If you want to be honest about, if we had a price on carbon, all of these things would be worked out for us strictly on the basis of cost. So by obfuscating that and putting things like clean coal ahead with no clear pricing of what that would cost the country, it is a real disservice to the country in terms of what is needed for the transition and then an understanding of what is going to be most effective.
Dr Smith : Clean coal is a fairytale. It is a distraction, but it is a very dangerous one because all it does is delay. We know this plant is not going to get built. What we need are real things that can be built now. This debate goes back a decade, I think, to when people gave the clean coal thing a try and found out that it would not work. There was the ZeroGen plant in Queensland that hundreds of millions of dollars were put into, and they came up with all kinds of problems that they were not able to solve. We cannot afford to waste another 10 years. We need to move forward with our energy transition. We are in the middle of it now, so we need solutions we can deploy now.
Senator HUME: Can I just contextualise your submissions for my own peace of mind. Do your organisations agree that Australia's commitments to the Paris Agreement are adequate? Do they go far enough?
Ms Palese : It would be lovely if we could go further, but I, for one, would be thrilled if we could just meet those targets.
Senator HUME: And you do not think we are going to?
Ms Palese : We certainly have no plan. If you asked the federal government how they are going to achieve the commitments we have already made, there is simply no plan for how we will deliver the emissions reductions. From where we sit right now, I would say, 'Let's get that done first.' If we could go further, that would be fantastic.
Senator HUME: Can I ask, was your submission today done in the context of meeting those Paris commitments, or was it done in the context of exceeding the Paris commitments.
Ms Palese : Just meeting those commitments.
Senator HUME: What about the Nature Conservation Council?
Ms Barham : They would be the same. The Nature Conservation Council has been around for 60 years and through most of that time, we have advocated four policies that would reduce climate change. We are now in such a dire situation globally where, if we could particularly meet the 1.5-degree limit suggested, or ideally got to, at Paris, that is what we would support. Certainly, we wish we could turn back time and that we had had these conversations 40 years ago and we had acted on them, but as it stands now, we support the Paris Agreement.
Senator HUME: Just to clarify, these submissions are to support the Paris Agreement; they are not to exceed the Paris Agreement. Is that correct?
Dr Smith : That is right. Can I just tease it out a little bit, because there are a few different things in the Paris Agreement. One of the things in the Paris Agreement is that we commit to avoiding two degrees of temperature rise. Another thing is that we make an effort towards limiting temperature rises to less than 1.5 degrees, which is obviously something that will require very radical change. Another is that we reach zero emissions by the second half of the century. Clearly with that third one, building long-lived coal infrastructure is not going to reach that zero emissions goal. Even if it has some fantasy carbon capture and storage of 90 per cent of the emissions, it is still not zero emissions. The government's 2030 commitments do not really get us in the direction of meeting those other Paris commitments, like limiting temperature rise to, at most, two degrees, but making efforts to limit them to less than 1.5 degrees. That is what is needed to avoid dangerous climate change.
Ms Barham : If I can make one final point: the coalition government does also have an ambition here in New South Wales to reach net zero emissions by 2050. That is another admission from the government that we will get out of coal-fired power stations by 2050 at the absolute latest. There are no interim targets there. We certainly advocate that that time-frame is much sooner than 2050.
Senator HUME: So your organisation is lobbying the government to bring forward those commitments. Is that correct?
Ms Barham : Yes.
Senator HUME: Does your submission reflect that?
Ms Barham : Yes, absolutely. Our submission calls for all of the coal-fired power stations in New South Wales to be retired by 2030 and for us to move to 100 per cent renewable energy by then.
Senator HUME: Do your submission or both organisations provide any analysis into energy security, energy reliability or baseload power aspects?
Ms Barham : We certainly advocate that the government does. I think it is a role that both state and federal governments absolutely have to play when it comes to storage. We have seen policies like the renewable target be absolutely successful in generating really significant, large, essential renewable energy projects. But there certainly is a role for state and federal governments in stimulating investment in storage, because that is something that we, obviously, have not seen happen enough in Australia to date.
Senator HUME: Have your organisations provided any data as to how we might go about doing that in line with the recommendations that you have made? Is there any analysis done at all?
Dr Smith : We are a nature organisation; we are not energy market analysts, but we refer to, and we can provide, those things. There were road maps done for reaching 100 per cent renewable energy. For example, the Australian Energy Market—
Senator HUME: Sorry, I am not after 100 per cent renewable energy. I want to talk about energy security; baseload security.
Dr Smith : That is what I meant. In order to have a 100 per cent renewable energy system that is reliable, secure, affordable, the road maps are done towards achieving that aim by the Australian Energy Market Operator, by Beyond Zero Emissions. The University of Queensland has done some modelling on that and so has the University of New South Wales, so we would be happy to provide the committee with those.
Senator HUME: And your recommendations are based on those reports. Is that correct?
Dr Smith : Yes.
Senator HUME: And you know that the recommendations that you have made in your submissions align with the recommendations in those reports?
Ms Palese : They do.
Dr Smith : That is right.
Senator HUME: You spoke about the cost to communities of the coal-fired power stations retiring. Have you done any analysis into the costs of higher energy prices on those communities, the potential effects of higher energy prices?
Ms Palese : Again, I would like to say, with the national transition plan that is effective across the states and federally, we could control and look at very carefully controlling power increases.
Senator HUME: Power prices.
Ms Palese : Power prices are increasing because we have no plan, and we are letting the market dictate to us when, for instance, under crisis situations such as in South Australia, we are seeing individual companies such as AGL spike costs because they can milk the system for money. We are not managing it and we have no plan. Asking our groups to provide you the analytics for how to do this is an interesting approach when the federal government has failed to spend any time whatsoever looking at what I consider to be a national crisis.
Senator HUME: I am just interested in organisations that have a very strong ideological opinion on this and yet are not actually providing the data behind it.
Ms Palese : This is not an ideological opinion, and you can look the world over to see how countries are transitioning. It is not a mystery as to how it is done; we are simply not doing it.
Senator HUME: What do you actually think will happen to Australia's coal reserves once all our coal-fired power stations are retired?
Ms Palese : It will stay in the ground.
Senator HUME: You do not think that they will be exploited and shipped off elsewhere?
Ms Palese : Not if we work on it. The Paris Agreement will dictate how people do or do not buy coal.
Senator HUME: But people are buying coal. We are exporting our coal already and we will continue to export our coal.
Ms Palese : I point you to China, which has reduced its into coal in two years so significantly that it is already impacting our market. The carbon agreements in Paris will dictate that countries like China, India et cetera will use less coal and will quickly transition to renewable energy, which is now cheaper and more cost-effective. Our market is not taking that on board and preparing economically for what is coming.
Senator HUME: Thank you. That was my final question, too.
CHAIR: It is an interesting question whether coal is in structural decline already—some people think it is and some people think it is not. I am going to ask you this really bluntly: do you feel that the cause is lost to reduce emissions and to turn the ship around? Do you sometimes get the sense from your own members that it is too late already or do you believe that maybe we have won the battle on renewable energy?
Ms Barham : I think if you look at public polling, the community overwhelmingly supports renewable energy. Here in New South Wales, we know 83 per cent of people—from New South Wales government polling—want more renewables in our own system here in New South Wales. We know people want action on climate change in record numbers, particularly after the heatwaves that we have seen in Sydney in the last couple of weeks. Concern for climate change is strong; support for renewables is strong. That said, certainly watching the machinations of federal parliament does not help our supporters, who understand and who are feeling the consequences of climate change, so I would encourage the government and federal parliament to take these issues with the seriousness that the community is taking them.
CHAIR: Just to be clear, you do not believe the political class is representing the views of, for example, your members in the broader community because of vested interests? What do you think the key reason is that we are not getting action on global warming?
Ms Palese : I think it is vested interests. It is also a history of assuming that jobs can only come from things like mining, with no ability to get your head around what is coming next even though there are models of it happening all over the world. Sitting away and far out of the systems that are moving very quickly across Europe and North America, we are not being kept up to date with how fast things are changing—the market in China, the market in India.
Structural decline in coal is inevitable if you just believe that people will deliver on most of what they agreed to in Paris. So the reality is it is not a political issue; it is a technical solution that we have refused to get our head around, and it is a real disservice to the public that do want action and believe that we can do it. And we have the innovative mindset both here and also commercially to be able to deliver the solutions we need.
Senator RHIANNON: I want to return to the issue of clean coal. We have been talking about the structural decline of the coal industry as inevitable and you have set out some of the trends that are occurring in that. Now we have seen this resurgence in those advocating about clean coal. Could you expand on what tactics are going on here and why you think that has happened? I would like you to elaborate on the comments that you have made, because it seems as though it is very significant when we are trying to examine the need to retire coal-fired power et cetera.
Ms Barham : I can make an initial comment. I think it is a delay tactic. The federal government clearly has no plan for action on climate change more broadly, and certainly not for reorienting our electricity system, as we know it needs to to 100 per cent renewable with storage. So I think this discussion about clean coal is simply a delay tactic and is trying to mask the fact that the government does not have a plan on the issue. If you look at any serious industry player—any of the operators of the existing coal-fired power stations, any of the financiers—they pretty much try and hide their smoke when they are talking to camera about discussions of clean coal. Everybody in the industry knows that this is not going to happen, so it seems like it is just a delay tactic to me.
Senator RHIANNON: In terms of the government putting money into it, therefore it would further delay the transition that is needed? Is that how you would see it?
Ms Barham : Absolutely.
Ms Palese : To move money out of the Clean Energy Finance Corporation from strictly renewable energies—even they have said that clean coal, for instance, may not even meet their criteria for the cost-effectiveness of the outcome given how much it may cost.
Ms Barham : And it will inevitably make the transition, once it does happen, all the more expensive and more painful for the communities that do have existing coal-fired power stations as well, so there are also the social costs of delay.
Senator RHIANNON: Within the corporate sector, who is mainly pushing clean coal? It seems as though there are some of the generators who are not getting involved in that tactic, but there is a small grouping who are. Could you describe who the players are that are pushing the clean coal message?
Ms Palese : It is a mystery to me. The three major players in this country do not believe it can happen. So Origin, AGL and Energy Australia have stated quite clearly they cannot see it as an option and they cannot see it as a cost-effective thing to pursue—have not historically and do not now. One of the things I find interesting about the questions of security, in particular—or using the excuse of security for, I don't know, no national plan when what would be the obvious answer would be a national strategy that could help us work on security and cost—would be to ask these companies what they want. Invariably, they say a price on carbon that would allow them to make this transition in a cost-effective way with no ideology and no commitment to a particular technology. It would be technology neutral. It would allow them to approach the problem, find a solution and roll it out in a cost-effective way.
CHAIR: I would love to keep asking more questions but, unfortunately, we are out of time, so thank you very much for appearing today.