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Monday, 17 August 2009
Page: 8019


Mr SIMPKINS (6:11 PM) —I welcome the chance to make a contribution to this debate regarding renewable energy and, in particular, these bills regarding mandatory renewable energy targets, the 20 per cent by 2020 target and the shortfall charge issue. Before I speak to the Renewable Energy (Electricity) Amendment Bill 2009 and the cognate bill, I would say that it is great news that the government have at last agreed to the decoupling of the ETS legislation from the renewables legislation. The government’s original plan showed that their interest was not in achieving what was best for Australia but rather in trying to force all the non-Labor Party representatives into an agreement with the original legislation. Now is the time for negotiation, but it is a pity that the government’s intransigence has caused these delays to date. Yet it is time to move on constructively, and I will now address the bill in this debate.

Prior to speaking on the detail, however, I say that the overall point of this bill is to ensure that by 2020 all electricity wholesalers have 20 per cent of their electricity attributed to renewable production. If they do not then they will be liable for a shortfall charge of $65 per megawatt hour. It is also worthwhile to note that, despite the Rudd Labor government’s strident statements that the former government did nothing for 12 years, the fact that this bill that we are discussing today is an amendment suggests that the government is once again wrong with its rhetoric. The facts are that there are two pieces of legislation and one set of regulations on this matter alone that prove this government wrong. Clearly, from the year 2000, legislation was raised, being the Renewable Energy (Electricity) Act 2000, the Renewable Energy (Electricity) Charge Act 2000 and the Renewable Energy (Electricity) Regulations 2001.

With specific regard to this bill, it is intended to increase annual targets for renewable energy from 2010 and includes a 45,000 gigawatt hour target in 2020; a solar credits mechanism based on energy certificates; multipliers for solar photovoltaic, wind and micro-hydro systems; a review of the operation of the legislation in 2014; and provision for partial exemptions from liability for electricity-intensive trade-exposed activities and the transition of state schemes into the federal framework. Specifically, the bills provide for a new solar rebate scheme based on RECs, or renewable energy certificates, generated, so to say, from the existence of the solar photovoltaic systems. With regard to those systems, the $8,000 rebate the coalition created is to be replaced with a solar credit scheme, where renewable energy credits are issued to the installers of solar photovoltaic systems of less than 1.5 kilowatts. Those credits, for a common one-kilowatt system, are expected to be tradeable for between $4,000 and $4,500.

The legislation maps out the progressive increase in the mandatory renewable energy target from 9,500 gigawatt hours to the 45,000 gigawatt hours I mentioned before. The bottom line is that electricity wholesalers will have to ensure they have 20 per cent of their energy produced by renewable sources. They can achieve that by obtaining electricity produced by solar, wind, geothermal or other options. If they cannot then they have to buy RECs. If they still cannot reach the target then they have to pay the shortfall charge of $65 per megawatt hour. That is what this legislation is meant to do and we offer our support for it, subject to some amendments that are being negotiated at this time.

It is certainly the coalition’s position to pursue a clean energy economy and with no equivocation we support the 20 per cent target. I will make the point again that the target set by the coalition of 9,500 gigawatt hours represents some 10 per cent of electricity production, and I am keen to see that figure advance to 20 per cent. I question, however, how the government have assisted the sector to achieve these targets when they have moved the goalposts so rapidly in the past. The great examples came from the solar industry: firstly, the surprise means-testing of our $8,000 rebate, and then the no notice close-down of the scheme 21 days early on 9 June this year. With such a track record, it is hard to have confidence in the government setting the rules and then not changing them—and you can add to that list the no notice abolition of the coalition’s Remote Renewable Power Generation Program on 22 June.

It is clear that the government have struggled to maintain any consistency on solar policy, and it should be noted that the renewables sector as a whole did not appreciate being bound up in the ETS legislation when they knew that there was significant bipartisan support for renewables legislation if it stood alone. The point is obvious that the Labor Party used solar for politicking before the election and used renewables for politicking regarding the ETS but, through the dual faults of political opportunism and ineptitude, they have not taken the opportunity to support and add certainty across the renewables sector.

Again, renewable energy was one of the issues that the Rudd Labor government highlighted as something we had supposedly not acted upon when we were in government. That was clearly false; however, it worked for them in the political environment. When faced with the opportunity to act, to achieve and to work on the high expectations they had created, there has been nothing but vacillation on existing measures we had created and delay until now, when something of substance has been introduced to the parliament. Sadly, the Rudd government have been about smoke and mirrors, and no more so than in using the renewable energy sector for political gain and abusing the sector for the last two years.

With regard to the amendments sought, first and foremost we have the expectation that renewable energy targets are a separate issue and divorced from the ETS. Beyond that, we have made our position clear with regard to zero emission sources of energy such as renewable gas and waste coalmine gas. I understand that they are recognised as zero emission in both the US and certain parts of Europe.

In speaking of recognition of emerging and alternative renewable energy production, it is important that we be careful regarding renewables that already exist. It is my view that renewables must be constant and not dependent on weather fluctuations. A point well made by an earlier speaker was that a renewable source of energy that requires a redundancy or a backup to be constantly running is not an effective energy source. The member for O’Connor also raised the point that the Premier of South Australia is looking for 30 per cent of his state’s electricity production to be generated by wind power. Yet coming with that goal is the inherent risk of having to shut down turbines in hot weather. The potential loss of 30 per cent of the state’s power in extremely hot conditions is a major problem and a risk that should not be readily accepted.

The point I am making is that all that glitters is not gold. While many people may feel better having wind power as a major element of renewable targets, the reality is that renewables must be virtually certain of 24 hour a day, 365 day a year production and supply of baseload power. It is therefore far better to pursue technology that has such capacities, and we should look to those options.

It is not my intention to speak very much longer, because there are still plenty of people waiting to speak on this legislation. Again, we should not limit ourselves to the pursuit of renewable options that are high profile but with limitations that are yet to be resolved. This is about real action and options that will see sustainable and viable renewable energies, not about ticking boxes and feeling good about having done something that is green. I look forward to these bills being amended for the better and passed quickly, allowing progress towards a 20 per cent target via viable and reliable energy production sources.