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Thursday, 27 May 2010
Page: 4377


Mr COMBET (Minister for Defence Materiel and Science and Minister Assisting the Minister for Climate Change and Energy Efficiency) (10:26 AM) —As the member for Lyne was the final speaker, I would like to thank members for their contribution to the debate on the Renewable Energy (Electricity) Amendment Bill 2010, Renewable Energy (Electricity) (Charge) Amendment Bill 2010 and the Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Bill 2010. Each of these bills has been the subject of a cognate debate.

The bills together will implement the enhanced renewable energy target to separate the existing scheme into two parts. Firstly, the Small-scale Renewable Energy Scheme and, secondly, the large-scale renewable energy target will both take effect from 1 January 2011. The renewable energy target is a key measure in the government’s climate change policy designed to deliver on the government’s commitment to ensure that the equivalent of at least 20 per cent of Australia’s electricity will come from renewable sources by the year 2020. The enhancements will provide greater certainty for large-scale renewable energy projects and installers of small-scale renewable energy systems such as solar panels and solar water heaters.

I would like to briefly summarise the debate and respond to some of the points that have been raised by members of the House. Firstly, the 20 per cent renewable target by 2020 is a challenging but significant increase on the previous mandatory renewable energy target, and it will drive investment in Australia’s renewable energy sources such as wind, solar and geothermal power. The large-scale renewable energy target in 2020 will only be met with substantial growth in large-scale renewable energy generation projects. Modelling released by the government yesterday shows that the changes are expected to deliver more renewable energy than the original 20 per cent target, reaching around 22 per cent by 2020, which will help transform the electricity sector and support investment in both large- and small-scale renewable energy projects. This is a very important initiative. Further, the enhanced renewable energy target is expected to drive up to $19 billion in total investment in large-scale renewable energy generation in the period 2020-30. Importantly, these changes are only expected to add $2 per year to a typical household’s annual electricity bill.

On the issue of the renewable energy target support for emerging technologies, it has been suggested that the RET should be banded to ensure the deployment of less mature renewable technologies. The RET Scheme encourages the deployment of renewable energy without picking winners within the target. As I have indicated, the renewable energy target is in fact very large. It increases the current Mandatory Renewable Energy Target Scheme by over four times. Due to the large size of the target, the RET will pull through a range of technologies including wind, biomass, solar and geothermal energy. The RET is complemented by significant direct support for the development, commercialisation and deployment of emerging renewable energy technologies through the $5.1 billion Clean Energy Initiative announced by the government.

The government has now committed more than $200 million to accelerate geothermal energy technology development, demonstration and deployment in this country, leveraging a total investment in excess of $720 million. Funding for several geothermal projects has already been announced. In that context it is not considered appropriate to be banding, as it has been described, the renewable energy target.

There has been some suggestion of rorting of government support for heat pump water heaters. The government became aware last year that some installers of heat pump water heating systems had been inappropriately claiming renewable energy certificates under the RET Scheme, introduced by the previous government in 2001. Some concerns were raised that multiple heat pump hot water systems or excessively large systems were installed above the capacity actually required by the user in order to generate the certificates. In September 2009, regulations came into force to address that issue. These regulations were put in place to prevent the oversizing of heat pumps. The regulations require statutory declarations to ensure that, for units with a capacity of over 700 litres, the unit is appropriately sized for its intended use and that there is an intention that it remain in its original configuration and location for the life of the unit. This has had a significant impact in ensuring that renewable energy certificates are claimed only for appropriately sized heat pumps and addresses the issues that have been raised.

Furthermore, there has been some commentary on the closure of the Solar Homes and Communities Plan. Solar credits under the Renewable Energy Target Scheme replace the support previously provided through rebates under the Solar Homes and Communities Plan for installing rooftop solar photovoltaic systems. By legislating support, solar credits will provide increased certainty to industry and the community with respect to the solar PV systems.

On the issue of government support for renewable energy generally, the renewable energy target is, as I have said, a part of a suite of government policies encouraging the switch to cleaner energy. In particular the government is providing funding for research, development and demonstration of clean energy technologies, including renewables, through the $5.1 billion Clean Energy Initiative. This incorporates the recently announced in the budget Renewable Energy Future Fund, which will provide an additional $652.5 million over four years to support Australia’s response to climate change.

The Australian Centre for Renewable Energy is a key plank in Australia’s commitment to clean energy technologies and to deploying these technologies around Australia. It draws together more than $560 million in order to accelerate the development, commercialisation and demonstration of renewable energy technologies and it will, therefore, complement the government’s investment in generation-scale demonstration projects under the Solar Flagships program and the sustained commitment to household and community-scale renewables through initiatives such as the Solar Cities program and the National Solar Schools program. In addition, the Prime Minister’s Task Group on Energy Efficiency will report shortly, in mid-2010, on other important new energy efficiency measures.

In conclusion, the amendment bills before the House today will encourage the deployment of both major renewable energy projects and household-scale renewable energy systems. The renewable energy target is a key measure in Australia’s climate change policy and these changes will deliver significant and timely sets of enhancements that will reduce Australia’s emissions. The enhanced renewable energy target will drive significant investment, accelerating the deployment of a broad scale of renewable energy technologies like wind, solar and geothermal. These changes will ensure that 20 per cent of our electricity supply comes from renewable sources by the year 2020. These bills represent a major step forward towards the transformation of the Australian economy and the building of Australia’s low-pollution future. I commend the bills to the House.

Question agreed to, Mr Oakeshott dissenting.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.