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Wednesday, 28 October 2009
Page: 11281


Mr IRONS (5:05 PM) —I rise today to speak on the amendments to the Carbon Pollution Reduction Scheme put forward by the Leader of the Opposition. The amendments relate to concerns surrounding the timetable for a vote on the Carbon Pollution Reduction Scheme Bill 2009 [No. 2], the effectiveness of the scheme before the House and the impact that the scheme is likely to have on Australian people and Australian businesses. The government’s CPRS plans have created significant debate not only in parliament but also in my electorate of Swan. People on both sides of the climate change debate have been contacting me by email, by phone and on my website. As a member of parliament, my job is to reflect the views of my constituents on this matter. With conflicting views, one needs to be objective when considering the problem and any potential solutions.

When addressing the issue of climate change in a 2003 submission to the Western Australian Government Greenhouse Taskforce, Mechanical Building Services Consultants said:

While the efforts so far are mostly well intentioned, from our work with the ABCB, it has become obvious that improvements in energy efficiency can only ever result in a reduction in the rate of increase and will never deliver an actual reduction in net energy consumption with resultant greenhouse gas emission reductions. The simple fact appears to be, as long as our primary energy sources are fossil fuel based, all our best efforts to reduce consumption will not deliver a net reduction in greenhouse gas emissions and will have a negative economic impact.

In order to achieve a significant reduction in greenhouse gas emissions without seriously damaging the economy and degrading our lifestyle, we must de-link energy use from greenhouse gas emissions and the only way of achieving this is to source most of our energy from renewable sources.

They go on to say:

Of all the renewable energy sources for electricity generation to emerge so far, such as solar, wind, tidal and hydro, none will ever be able to meet base load electricity demand as none are globally applicable or are capable of continuous output. Nuclear power could, but is not a serious global option as it is not renewable and is politically unpalatable.

What we need is an entirely new, unlimited, renewable, environmentally benign, sustainable energy source to meet all our electric, heating and transport energy needs, indefinitely.

… One fact with geothermal energy is indisputable: there is enough geothermal energy stored and naturally generated in the earth to meet mankind’s energy needs for all time.

These words should resonate with every member in this place.

The fact is that if we concentrated more on developing and pursuing renewable energy in this country there would be no need for us to be having this debate today about amendments and about CPRS, or ETS as some people like to refer to it as. Instead of debating the merits of a carbon tax—and it is a form of carbon tax; there is no doubt about that—we could be debating how to make Australia the hub of a future renewable energy industry. This is the approach I take to climate change and I make no apology for it. I accept the premise that climate change exists and that greenhouse gas emissions are contributing to the accelerated rate of climate change. There is evidence to support this and I lend my weight to those arguments. Climate change is something the world has had to cope with since the beginning of time. I believe the best way to tackle climate change is through the relentless pursuit of renewable energy. Australia’s future energy needs can be catered for by renewable energy. I will declare to the House that I am a shareholder in renewable technology, wave power to be exact, and I believe it has a future.

I first began taking an active interest in the WA geothermal energy industry several years ago when running my air-conditioning business. At the time, technology for air conditioners linked to geothermal energy were being discussed by the industry. My company promoted the concept and the product into Western Australia in the early 1990s. Unfortunately, at the time, the technology was not cost effective and there was little appetite for it. This situation is, however, evolving and this year UWA and Green Rock Energy announced a joint venture to tap into the geothermal potential of the Perth Basin and replace up to a third of UWA’s air conditioners with geothermal powered absorption chillers. If the project is successful the program could be expanded across the Perth metropolitan area. According to Professor Hui Tong Chua at UWA, a test drill has already dug to a depth of 200 metres near to James Oval and the eventual project will dig directly below the campus. This is just one of many exciting recent developments in Western Australia, with a partnership between the Liberal-National WA government, several local and national geothermal companies and universities such as UWA and Curtin, in my electorate, being forged.

UWA’s Western Australian Geothermal Centre of Excellence, WAGCOE, is building an international reputation in studying the potential of both hot dry rock and low-temperature hydrothermal systems. Hydrothermal technology usually involves a well being dug into permeable sediments. The UWA project is a hydrothermal project and the process is explained by an ASX announcement from Green Rock Energy on 2 July:

Green Rock Energy will drill two geothermal wells to a depth of approximately 3,000 metres to provide geothermal water 100 degrees Celsius to power a 5MW absorption chiller. One well, a production well, will be used to access and obtain the hot geothermal energy and the other, an injection well, will be used to return the cooler geothermal water following the extraction of the geothermal energy, in the form of heat, by the absorption chiller. By replacing conventional compression chiller plants that use electrical energy, large commercial buildings, including universities, hospitals, hotels, airports, data centres and shopping centres, can be air conditioned using geothermal water as the principal power source. This is particularly so in Perth, which sits on a deep sedimentary basin up to 15km deep with multiple heated aquifers.

Hydrothermal systems generally target lower temperatures which are more accessible and reduce overall costs. The WA government last year allocated 495 lots between Kalbarri and Dunsborough, which can be leased for geothermal exploration. According to Green Rock Energy, the Perth Basin is a 1,000-kilometre-long geological rift containing sediments up to 15 kilometres deep. It contains thick sequences of permeable aquifers containing hot geothermal water with sufficient temperature and water flow capacity at depths considered to be economic for electricity generation.

Along with UWA, a number of companies including West Perth based Green Rock Energy, Austral Ion, AAA Energy, Granite Power, New World Energy Solutions, Geothermal Power, Torrens Energy and Thermal Resources were also granted exploration permits, so the future of geothermal technology in Perth looks good. Energy Minister Norman Moore said at the time that the expected expenditure for geothermal exploration for the 36 permits in the Perth Basin is more than $560 million in the next six years.

A second technique with some potential is hot-fractured-rock technology, which is the only known source of renewable energy with the capacity to carry large base loads. Hot rock energy involves tapping into a high-heat-producing granite via a heat extraction system. The Australian Geothermal Energy Association, which is representative of major geothermal explorers, developers and service providers to government and other stakeholders classifies Australia as the ‘leading pioneer’ in enhanced geothermal systems. However the process of harnessing energy from hot rock is highly challenging. The key impediment to further growth in this field is the start-up costs. AGEA estimates that on average $30 million is required for a proof of concept, whilst the total support available from the federal government is much less. Statistics provided by AGEA show that 48 companies have geothermal exploration licenses, 10 hot-rock companies have ASX listings, and there are 363 licenses on a variety of plays. AGEA have also estimated that current work programs from 2002-13 nationally are worth more than $1.5 billion. The good news is that Western Australia has some significant hot-rock potential also.

So, when I am considering the CPRS, which is before the House today, I ask the question: how will this help the transition to a renewable economy in Australia? The renewable energy component of the legislation has been decoupled and passed the House. Will the rest of the bill really help support a future geothermal Perth? Many on this side have raised the issue of household and domestic costs rising under an ETS. We have heard from Ian MacFarlane that the CPRS legislation will have widespread and substantial impacts on the Australian economy, on business, on consumers and on jobs. He has told us that electricity prices will rise by close to 20 per cent in the first two years of the scheme. If this transpires our small businesses will pay a heavy price. Is it all worth it for a scheme that will cut emissions by only 5 per cent? These amendments acknowledge the problems with the current scheme, they acknowledge the concerns about trade exposed industries, they acknowledge concerns about Australian farmers and they acknowledge concerns about high electricity prices.

Much has been made, over the last two years, of the timing of the scheme and I accept we have spent two years debating this. If we spent all this time and effort on turning Australia into the renewable hub of the world our emissions would surely fall by a much more significant amount over the coming years. At the moment negotiations are taking place between the government and the opposition over a number of amendments to this legislation and it is rather unusual that we should be debating such a matter before we know the outcome of these negotiations. However, I would urge my colleagues and the members of the government benches to consider the points which I have raised today about geothermal energy. Let’s focus on the positives, not on the negatives. Let’s give all Australians what they want, which is a real solution to climate change and not just a carbon tax which will do nothing but drive business offshore and cost Australia jobs.