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Wednesday, 26 May 2010
Page: 4161


Mr KELVIN THOMSON (12:41 PM) —The purpose of the Renewable Energy (Electricity) Amendment Bill 2010 is to separate the Renewable Energy Target Scheme into two parts: the large-scale renewable energy target and the small-scale renewable energy scheme. These changes will provide greater certainty for both large-scale renewable energy projects and installers of small-scale renewable energy systems. The large-scale renewable energy target will encourage the deployment of large-scale power generation using energy sources such as wind, solar, biomass and geothermal, while the small-scale scheme will provide continuing support to households, businesses and community groups who install renewable energy systems like rooftop solar panels and solar hot water systems.

The enhanced scheme is important in delivering the government’s commitment that at least 20 per cent of Australia’s electricity will come from renewable sources by 2020. The large-scale renewable energy target will deliver the majority of the 2020 target while the small-scale renewable energy scheme will deliver the remainder of the target. Combined, the new large-scale target and the small-scale scheme are expected to deliver more renewable energy than the existing 45,000 gigawatt-hour target in 2020. The degree to which the 20 per cent target is exceeded will depend on the uptake of small-scale systems by households, small business and community groups.

The benefits of the renewable energy target and the recent changes are already being realised. Within a few days of the government’s announcement to enhance the renewable energy target, AGL announced that it had entered into conditional arrangements for the construction of a 365-megawatt capacity Macarthur wind farm in south-west Victoria. The renewable energy target is part of a suite of government policies encouraging the switch that we need to make to cleaner energy. To complement the renewable energy target the government is making significant investment in generation-scale renewables through the $4.5 billion Clean Energy Initiative. This initiative includes the $1.5 billion Solar Flagships program to support the construction of large-scale, grid connected solar power stations operating within the energy market; the Australian Solar Institute, which will help to retain the Australian solar expertise and develop the next generation of Australian solar researchers; and the Australian Centre for Renewable Energy.

The Department of Climate Change and Energy Efficiency estimates that the enhanced renewable energy target will add less than $4 per year to the average household electricity bill. The 2010-11 budget also demonstrates the government’s commitment to building a renewable energy future for Australia. The government will boost existing investments in clean and renewable energy and support greater energy efficiency measures through the Renewable Energy Future Fund. That new Renewable Energy Future Fund—$652 million—will leverage private-sector investment to support large- and small-scale renewable energy projects such as geothermal, solar and wave energy.

The Renewable Energy Future Fund will also accelerate development and deployment of low-emissions technologies and increase Australia’s take-up of energy efficiency measures in both households and businesses. The fund will include partnerships between the government and the private sector to make critical early-stage investments to leverage private funds to support the commercialisation of renewable technologies. Together with the Clean Energy Initiative this additional funding brings the government’s total investments in renewable and clean energy and energy efficiency to over $10 billion. The Labor government is facilitating through these reforms the means by which Australians can do their bit to conserve energy while also creating new clean industries and jobs.

In my own electorate of Wills I recently attended the Plumbing Industry Climate Action Centre’s ‘Sustainability in the Home Day’, where I inspected and learnt about the great work the centre is undertaking to train and skill trades people in energy-efficient and green collar jobs. I learnt about how the centre is helping people reduce their energy and water consumption around the home and playing a vital role in helping us combat climate change at the grassroots level. The centre’s website points out that there is general consensus that buildings produce 40 per cent of the world’s greenhouse gas emissions. The Plumbing Industry Climate Action Centre—PICAC—offers a solution to deal with this issue swiftly and economically.

The Plumbing Industry Climate Action Centre will provide plumbing training to practising plumbers with a focus on sustainability, energy saving, waste reduction and water conservation. The training centre’s facility is a five-star Green Star rated building that will trial and promote new technologies—a working example of innovative design and sustainable plumbing. At the opening of the facility the Victorian Premier commented:

Green plumbing is the number one skills issue for Victorian plumbers, with a recent report estimating that no more than 10 per cent of the State’s 20,000 plumbers have sufficient green skills to meet the growing demand for environmentally sustainable plumbing. To date, 3,000 Victorian plumbers have attended Green Plumber’s courses. This number will grow considerably as the Plumbing Industry Climate Action Centre rolls out its programs to the broader plumbing workforce. The centre will play a leading role delivering sustainability skills for the Victorian plumbing industry and will be critical for driving growth in the Victorian green plumbing sector and creating jobs.

Deputy Plumbing Industry Commissioner Sarah McCann-Bartlett said the centre was a credit to the industry in its united response to climate change. She said:

This wonderful facility will allow qualified plumbers to gain hands-on experience in working with the green technologies that will put Victoria’s plumbers at the forefront bf the fight against global warming.

Plumbers have a huge role to play in making our environment cleaner. Over 70 per cent of all energy consumed in the home is related to work carried out by plumbers. In commercial buildings the greenhouse gas emissions are principally due to cooling, air handling, lighting and heating. Over 60 per cent fall under the watch of the plumber. So industry will expect that the sector is able to provide the best advice and processes to comply with government targets for the reduction of greenhouse gas emissions.

I congratulate the Plumbing Industry Climate Action Centre on their fantastic work and look forward to working with them and the wider community to help the Wills electorate reduce its carbon footprint. It is a world-class facility, and I congratulate Earl Setches, the plumbers union secretary, on his innovative work and vision in relation to this area. It is a project which involves employers and it is a project which is innovative. It was very interesting to see the cogeneration plants, which have the capacity to meet the needs of large-scale high-rise buildings, and also their geothermal facility. Most people associate geothermal energy with outback Queensland or South Australia, drilling down deep into the earth’s crust. In fact, they have a geothermal facility which drills about 30 metres into the soil in Brunswick and heats up water there and uses that to produce heated air and generate energy in that fashion.

I also want to reiterate my support for the idea of feed-in tariffs, which I believe have considerable potential to help us meet and exceed our renewable energy target. The member for O’Connor expressed opposition to that proposition. I disagree with him strongly. The Council of Australian Governments have agreed to work towards the adoption of a set of national principles to apply to new state and territory feed-in tariff schemes. These principles should advance the fair and reasonable treatment of small customers, with renewable microgeneration, including solar panels, as well as consider the interests of electricity customers.

Access Economics has found that Australia has the potential to double the number of people employed within the renewables sector through the introduction of a national gross feed-in tariff over the next 10 years. Feed-in tariffs encourage individual homes, factories, schools and building sites to become minipower plants, meeting their own power needs through the production of renewable energy which does not emit global warming emissions. Feed-in tariffs build community awareness, as individual households feel empowered in making a contribution to the mitigation of climate change. Further, by decentralising alternative power generation, you minimise the problems of the geographic concentration of such facilities. That will provide a security dividend. Small on-site generation makes the electricity system less vulnerable by reducing the grid instability that can result from the loss of a large power generator. Most people associate feed-in tariffs with solar PV, but solar PV is not the only way that households and commercial properties can generate their own power. Innovative work is being done on things like small wind plants and even geothermal installations. The Alternative Technology Association has concluded that, while the greenhouse benefits are often touted, the benefits of grid-connected solar PV are far greater than just greenhouse gas reductions.

Solar is a clean source of electricity, and its widespread adoption will result in significant economic savings to all consumers in two ways: (1) through reduced wholesale electricity prices, as output of solar PV systems corresponds closely to peak demand when the wholesale electricity price reaches its maximum; and (2) avoiding network augmentation—that is, new power stations and transmission infrastructure—by generating electricity close to the point of consumption and at times of greatest stress on the network. I do not think that the cost to Australian electricity networks is commonly appreciated, given they are talking about spending another $24 billion over the next five years on network upgrades and with network charges accounting for around 45 per cent of consumers’ retail electricity bills. Clearly, if you are able to stave off this large investment in infrastructure by encouraging consumers to engage in their own rooftop infrastructure investment, both the planet and consumers will be better off.

The Alternative Technology Association did some calculations of costs in relation to Victoria and concluded that ‘Victoria would achieve a 100-fold increase in solar capacity’, or 250 megawatts, on an average of a little over $9 ‘per year over the life of the scheme’—a ‘price increase of less than $1.50 per month’. These calculations include an exemption for cost recovery for low-income households—those eligible for energy concessions—as well as large electricity users connected directly to the electricity transmission network. Even with these exemptions, which effectively concentrate costs to typical domestic and commercial consumers, typical increases in electricity bills resulting from the feed-in tariff will be of the order of less than 0.6 per cent. I know that the Electrical Trades Union have done considerable research into the feed-in tariff proposal, and I commend them on that work and on showing that vision.

The transition to a clean energy future is also going to require dramatic improvements in the way that we use and distribute energy though the grid. This is why the Labor government has created the $100 million Smart Grid, Smart City project. The Smart Grid, Smart City initiative which will demonstrate Australia’s first fully integrated, commercial-scale smart electricity grid. This rollout will help consumers save energy, use smart appliances that run on off-peak power and connect their own clean energy to the grid. According to the Economist:

In order to accommodate the flow of energy between new sources of supply and new forms of demand, the world’s electrical grids are going to have to become a lot smarter.

A smart grid is the key to allowing green energy and distributed and intermittent energy into the energy network. The Economist outlines that such a ‘smart grid’ or ‘energy internet’ would be far more responsive, interactive and transparent than today’s grid. It would be able to cope with new sources of renewable power, enable the coordinated charging of electric cars, provide information to consumers about their usage and allow utilities to monitor and control their networks more effectively. All this would help reduce greenhouse gas emissions, and we need to assist that move to electric cars.

The consumer interface with the smart grid is the smart meter. This tracks electricity use in real time and transmits that information back to the power company. It makes energy consumption and sourcing more visible to the community, engaging their awareness in a similar way to addressing water consumption—that is, by making its measurement more effective and better monitored. The most effective meter would connect appliances in the house to a meter which can be tweaked to power up anything from a freezer to a washing machine according to spot energy prices on offer from the distributor or the availability of renewable energy and then communicate that process in a simple and easily understood format to the consumer.

Studies have found that when people are made aware of how much power they are using they reduce their use by about seven per cent. With added incentives, people curtail their electricity use during peaks in demand by 15 per cent or more. Recently I and the Parliamentary Secretary for Innovation and Industry, the member for Corio—who is in the House—recently visited the CSIRO’s zero emissions house in Melbourne’s outer northern suburbs. There we were able to see some of this initiative being put into place in a practical way. By reducing the peak level of demand, utilities can not only improve the stability of the system but also, due to reduced consumption, postpone the construction of new power stations.

A smart grid will make it easier to manage the intermittent and dispersed sources of renewable energy, such as rooftop solar panels and backyard wind turbines. It will also facilitate electric vehicles to be charged at night—the optimal time for which is at night, when electricity is less expensive—while also absorbing excess power from wind turbines on windy nights but feeding power back into the grid if necessary if the wind suddenly drops. This problem greatly exercises the mind of the member for O’Connor, but I assure the House that it is certainly capable of being solved. A smarter grid will not only help people save energy or use it more efficiently but also promote the adoption of all kinds of green technologies, including wind, solar and plug-in vehicles.

The global financial crisis has been used by climate change sceptics to try to spook the electorate into fearing action on addressing global warming. The truth is that the measures undertaken by the government through this bill and through the budget will create employment opportunities through climate change policy initiatives. The renewable energy amendment bill will deliver crucial reform to help tackle the long-term threat of climate change while also providing the springboard to create the jobs and industry of the future in a low-pollution economy. There is no doubt that climate change is a real problem. There is no running away from it, and we have to act to tackle it. I commend this bill and I commend the government’s renewable energy target.

There have been some interesting reports on this issue recently. Time does not permit me to go into them in detail, but I want to bring to the attention of the House and commend to it a report by Climate Works Australia, Low carbon growth plan for Australia. This was released in March, and its key findings were:

Australia can reduce its—

greenhouse gas emissions—

to 25% below 2000 levels … by 2020 the low-cost, using technologies available today.

Climate Works Australia’s

… low carbon growth plan identifies 54 separate opportunities - across all sectors—

ready to go—

that can be implemented over the next 10 years to achieve these emissions reductions.

It points out:

reducing—

greenhouse gas emissions—

can be profitable for business.

It goes on to say:

A combination of a carbon price and targeted action is required to achieve their full potential of low-cost emissions reductions.

It continues:

A portfolio of prompt action is required to implement the 54 opportunities—

taking into—

account … the risk of “locking-in” permissions for the long term and ease of emissions reductions.

It concludes:

Delaying action will mean some low-cost opportunities are lost, ensuring greater cost to society and—

greater cost to—

business in the long run.

I also commend to the House a report commissioned by the Australian Council of Trade Unions and the Australian Conservation Foundation from the National Institute of Economic and Industry Research, entitled Creating jobs—cutting pollution. It concludes:

Action to reduce pollution can go hand-in-hand with job creation and a prosperous and environmentally healthy Australia.

 … Australia could create more than 770,000 extra jobs by 2030 by taking strong action now to reduce pollution.

The jobs identified are not just ‘green collar’ jobs, but new jobs in traditional industries such as agriculture, mining, manufacturing and the services sector.

The institute set out a scenario which they call the strong action scenario, putting a price on greenhouse pollution and proposing a targeted suite of complementary policies to reduce greenhouse emissions domestically without reliance on imported international permits. I do suggest to members that they look at the full report if they have the opportunity. I support this legislation and commend the bill to the House.