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Wednesday, 26 May 2010
Page: 4248

Dr KELLY (Parliamentary Secretary for Defence Support and Parliamentary Secretary for Water) (6:50 PM) —It is a great pleasure to have the opportunity to speak on the Renewable Energy (Electricity) Amendment Bill 2010 and associated bills and to speak on another piece of legislation that deals with the climate change issue. This has been a matter of great concern to the people of my constituency and to me personally. I think this bill demonstrates that this is a government that listens, a government that is flexible and a government that will act to evolve and adapt to the changes that are needed in these challenging times.

It was certainly the case that concerns were raised about the impact on waste coal gas projects and about the impact of individual actions on the price of renewable energy certificates. We addressed that issue in this legislation. Specifically, that has been done through the separation of the scheme into the two parts: the Large-Scale Renewable Energy Target, the LRET, and the Small-scale Renewable Energy Scheme, the SRES. With these two schemes, the LRET will set an annual target at 4 million RECs. That is 4,000 gigawatt hours per year less than the current targets to take account of the estimate of the deployment of the small-scale technologies that individuals have been reaching out for. The estimate is that it will reach 41 million RECs, or 41,000 gigawatt hours, by 2020.

The bank RECs from the current scheme would only be eligible for use in the LRET. Installers of small-scale technologies will be able to received RECs at a fixed price of $40 in nominal terms for the period up to 2014. This will mean a householder in Sydney installing an average size 1.5 kilowatt system and receiving a solar credits multiplier will receive RECs worth approximately $6,000. The enhanced RECs scheme should come into effect on 1 January 2011. This will provide great certainty and encouragement to investment in the large-scale renewable energy projects and also provide stability during 2010 to enable electricity retailers and other liable parties to meet their current compliance year obligations.

The interesting part about this scheme is, of course, the SRES aspect, which supports those who wish to install a small-scale system such as solar panels and solar water heaters through the creation of a small-scale technology certificate. There will be no overall limit on the creation of these STCs and the price would be fixed, as I mentioned, at $40 through the creation of an optional clearing house. To maximise certainty for liable entities the bill requires the regulator, the Office of the Renewable Energy Regulator, to estimate the total number of STCs expected to be created at the start of each year to set that year’s annual target expressed as the small-scale technology percentage. The annual targets would be adjusted each year to account for actual small-scale technology certificate creation in the previous year.

The adjustment of the profile of annual targets to be met by RECs from large-scale generations to take account of the RECs from small-scale technologies is supplemented by the action to remove the proportion of the annual targets for the inclusion of waste coalmine gas until eligibility of that source is set in regulations. That should take the heat out of the reduction in the value of renewable energy certificates that were affecting the value that purchasers of small-scale systems could obtain in installing photovoltaic panels on their homes. The combined new LRETs and SRETs are expected to deliver more renewable energy than the existing 45,000 gigawatt-hour target for 2020. The degree to which we expect that target will be exceeded will depend on the uptake of small-scale systems by households.

This is an issue of critical interest to my region. It has been inspiring to see how they have responded to the climate change challenge through mobilisation of individual action. In our region we have the Clean Energy for Eternity organisation, which it has been my pleasure to work with these last few years. They have raised great awareness within the community and helped to drive community and individual action. By dealing with local companies like Pyramid Power they have created programs whereby, upon the installation of up to 30 systems, Pyramid Power will install a free system on a community asset. So we have solar power systems installed on churches, fire stations and other community assets through this program and also through great fund raising that Clean Energy for Eternity conducts.

Already through the Solar Homes and Communities Plan we have had something like $6 million expended on solar for 744 houses to install small-scale photovoltaic systems. You can see the scale of the response from the community in that respect. Also, through the Renewable Remote Power Generation Program we have had 204 systems installed to the value of $3.9 million.

My schools have also understood the importance of this issue and the educational value of taking action on climate change and have demonstrated that to our students and children. Moruya Public School, Bega High School, Bombala High School, Braidwood Central School, Eden Marine High School, Monaro High School, Moruya High School, Queanbeyan West Public School, Tumut High School and McAuley Catholic Central School in Tumut have all taken advantage of the $50,000 National Solar Schools Program to install systems in their schools. It is very exciting to see how creatively they have used that program to educate the children, to have classes around climate change and renewable energy and to show and demonstrate to the children how the power generator works and the technology behind it. I really do salute my schools in the region that have taken this issue on board and are showing tremendous leadership.

The large-scale renewable energy target projects that this legislation seeks now to underpin and promote hold great prospects for our region, not just for the country as a whole. We are greatly blessed in our region to have just about every renewable energy option available to us. Also, because of the wonderful Snowy hydro scheme, we have access close by to the national energy grid. Of course the Snowy hydro scheme is the grand-daddy of renewable energy projects in this country. It supplies 3.5 per cent of the national energy market. If you combine that with the wonderful Capital Wind Farm project near Bungendore—which was a $400 million investment and provides 10 per cent of the national wind generation capacity—you can see that we are the nation’s capital of renewable energy.

I have been dealing with many other projects and companies that are very exciting. We have an ancient project operating on Brown Mountain through Eraring Energy that started well before the Snowy hydro. We have a great company called Lloyd Energy in Cooma that is developing tremendous solar thermal possibilities and is deploying prototype projects in places like Lake Cargelligo in New South Wales and Cloncurry in Queensland. It is very exciting. Locally born technology is also spawning jobs and production in other companies in my region.

We also have the very exciting Dyesol company in Queanbeyan, which has managed to replicate photosynthesis by developing paste which contains titania nanoparticles overlaid by a dye that acts as a light sponge. The titania nanoparticles conduct the electricity. Through this product very flexible solar generating capacity is created. The product can, in fact, be put on window panes of homes and you can still see through them. It generates electricity and operates from the moment the sun comes up to the moment the sun goes down. With Commonwealth funding they have been able to get off the ground and are doing great things. I salute the operators of that company. Wizard Energy are locally based too and are developing proposals to take advantage of our Solar Flagships program and they are developing very exciting technologies.

I have also been dealing with a company called Carnegie Corporation, which has been developing a prototype wave energy generation facility at HMAS Stirling naval facility. As it transpires, the port of Eden in my region has great potential for wave energy generation. With this system, you need an average swell of about one metre on a regular and consistent basis. We certainly have that in the port of Eden and in a few months time Carnegie Corporation hope to drop a test buoy to begin the process of developing the potential of the port of Eden.

We have great biomass potential in our region by using the wonderful timber plantations. The Vizy pulp mill over in Tumut is a massive undertaking being conducted on tremendously high-value environmental grounds. They have done a wonderful job in maintaining those values in the development of the facility. They exclusively power their operation on energy from biomass. With an estimate that we have around 500,000 tonnes of waste left on the floor of plantations, we could potentially generate something like 50 megawatts of power out of that biomass waste in plantations. So there is a lot of potential there.

I have also been dealing with a company called Eon Energy, which has some very exciting biodiesel proposals using algal and seaweed ponds. We have been conducting meetings with local councils in Bega Valley Shire and Eurobodalla Shire because these facilities need to be near the coast. We are also trying to involve the Aboriginal land councils in my area to create some synergy with jobs and a self-sustaining income-earning potential for my Indigenous communities. This is a very exciting project in that we could power all of our fishing fleet with the one million litres of diesel fuel they require each year. We could also power the council plant and farming plant in the area from such ponds, which would be about 50 hectares in size. There is tremendous potential in biodiesel from algal pond systems. It is estimated that we could probably supply the country’s entire transport fuel needs from biodiesel from algal ponds the equivalent size of a 100 kilometre by 100 kilometre facility. Obviously that would be broken up into many different facilities but that is the scale of operation we would need to supplant our current dependence on fossil fuel. The need to do that is well understood by many. We need to get off fossil fuel for our transport industry as quickly as possible. It creates economic vulnerabilities for us because of the dwindling resources we have here and potential dependence on overseas suppliers, which has an effect on our balance of payments and also makes us strategically vulnerable. There are great incentives from security and economic points of view to explore these potentials.

One very exciting project is being conducted in Israel by a company called Seambiotic where they are funnelling flued gas emissions from coal-fired power stations into algal pond systems to generate biodiesel fuel and eliminate carbon emissions from the coal-fired power stations. This obviously would have great potential for a country like Australia. I look forward to seeing that technology developed and examined by this country.

I have also been dealing with a company called Sencorp because we have great biogas energy generation potential in the region by utilising animal waste products from livestock and abattoir waste from, say, the Monbeef abattoir in Cooma, as well as other forms of waste from the region such as council waste. I see this as part of what we might find is a distributed network of energy generation for the future of this country, a network which would help us meet the growing need for energy with projects which might deliver essential baseload power to this country.

The other possibility with this legislation is a fantastic investment in Eden-Monaro which would add to the $400 million Capital Wind Farm. The Wind Prospect company has a proposal that is working its way through the system at the moment. It is a massive project of $800 million, or roughly 120 turbines and therefore twice the size of the Capital Wind Farm project in Bungendore. That would equate to a $1.2 billion investment in my region on wind farm technology alone. That would be massive for the region in terms of jobs.

The high country in particular has suffered greatly during the last few years from the effects of the drought. This will provide a wonderful offset. It is a potential opportunity to diversify income for farmers in the area. I have been talking often to the proponents of the project and I look forward to it working through the environmental impact processes and hopefully becoming a welcome part of the economy of our region.

We also have geothermal prospects and a wonderful potential in tidal energy in our region. I have spoken with a company called Tidal Innovations, which has surveyed some of our tidal estuaries and river mouths, which offer great potential for tidal energy generation.

You can see that the region of Eden-Monaro has absolutely every potential renewable energy option open to it. It would be a massive boost to the economy in terms of providing the diversity we need. We are now heavily dependent on the tourism seasons, the winter season in the high country and the summer season in coastal areas. So we have a degree of under-employment, particularly with our youth. We are constantly striving to attenuate the employment year. These investments in our region would provide alternatives for our youth, to maintain the demographic balance that we need and the skills as well. Hopefully this will drive the skills taught in our TAFEs, in trade and training centres and in high schools, should the Rudd Labor government be re-elected—those trade and training centres are currently under threat from the coalition, as we know.

This renewable energy drive by the Rudd government is in stark contrast to what preceded it. We know that during the Howard years the renewable energy contribution to our electricity generation went down from 10.5 per cent in 1997 to 9.5 per cent at a time when the OECD generation capacity proportion went up. It was a shame on this country that we were not able to drive that agenda forward and we lost so many opportunities for investment and so much in the way of brain drain and research and development that left this country to go overseas.

There were many such projects. Some of them are quite well known individuals and companies. Suntech, one of the world’s top ten manufacturers of solar PV cells, set up in China due to the better policies that China had at the time. There were delays in the $750 million Roaring 40s project. Pacific Hydro moved its investment to Brazil because it was undermined by the Howard government’s refusal to ratify Kyoto. There were many other projects besides those—I could list quite a number. So it is great that we are now able to move forward in relation to driving the investment that we need in this country to move towards that 20 per cent target, which we now look to be able to exceed through the dichotomy we create with this legislation.

This legislation was meant to be tied to a dual strategy and the other part of that equation was the CPRS. There is a great deal of disappointment—I will not disguise that—in my region over the inability of this parliament to pass a CPRS bill. There is a great deal of anger about that and it is well understood that something so complex and deep in terms of its impact on this country, and the transitions that would be created, needed bipartisan support. It needed bipartisan support to create the economy of the future to give us a leadership role, to give our industry and economy the headstart that it would have really been able to take advantage of and to unleash about $100 billion worth of investment. That was taken away from us. It was taken away from us by a coalition that decided to turn towards cheap political opportunity rather than do something in the national interest.

We had a man of courage in Malcolm Turnbull, who was prepared to sit down and talk with us and make an arrangement that was in the national interest, and we bargained in good faith over a long period of time to make that happen. It is a tragedy that the rug has been pulled from under this country. I hope and pray that wiser heads will prevail after this next election.

A government member—He lost by one vote.

Dr KELLY —It is a shame that he did lose by one vote. There are many people on the other side who obviously do not believe the current policy of the coalition in this respect.

I conclude by saying that I wholeheartedly support this legislation, its vital objectives and the exciting future of renewable energy investment it will bring to the country and, in particular, to Eden-Monaro. I also look forward in hope to a day when we have a coalition leadership team that will act in the national interest and join with us again to advance the CPRS. The choice for the Australian people at this coming election will be very stark—a vote for a Rudd Labor government and effective action on climate change or a vote for the coalition and its purely political plan to waste taxpayers’ money for an end result that increases our carbon emissions and sacrifices the future of our children and our environment.

Debate adjourned.