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Tuesday, 18 August 2009
Page: 5229


Senator MILNE (4:50 PM) —I rise to support the Renewable Energy (Electricity) Amendment Bill 2009 and the Renewable Energy (Electricity) (Charge) Amendment Bill 2009 before the house. The Greens have been campaigning for a very long time to increase the renewable energy target in Australia. We noted that, at the last election, the government promised a 20 per cent renewable energy target. The Greens went to the election with a 25 per cent target, and we believe now, in view of the advances in renewable energy, it could go to a 30 per cent target. So we welcome this legislation, and there are many amendments which I will be proposing which would improve it. I will be putting those to the house in the committee stage and will discuss them in a moment.

First I want to talk about the cost of the delay of this legislation. It was a Rudd government promise in 2007. It has taken till June 2009 to get it into this parliament. The renewable energy industry has been waiting all of that time for this expansion, for this long-term signal for investment, and in the meantime we have been losing jobs and some of our brightest and best overseas. Every time people talk about job losses in the fossil fuel sector, they should instead talk about opportunity cost to the renewable energy sector and the new manufacturers and the move to the zero-carbon economy as our brightest and our best leave the country. On top of David Mills having left for California, Spark Solar have said quite clearly that all of their engineers around the world are Australians who trained here but went overseas because the opportunities were not here. We saw Vestas pull out of north-west Tasmania. We have seen BP Solar leave the country. We have seen so many leave the country—and on and on it goes—while waiting for this investment in renewable energy.

The Greens argue that we could not only have a renewable energy target but we also need a gross feed-in tariff on top of that target to bring on those technologies which will not be advantaged under the renewable energy target. We would put in a specific tariff for solar thermal, geothermal and wave power on top of the renewable energy target so that you maximise the technologies available now and bring on the technologies of the future.

This is a huge opportunity for Australia and it was held up because the government chose to try to wedge the coalition and link it to the CPRS in the context of giving exemptions to the big energy users around Australia, in particular under pressure from the aluminium industry. So when it came to a choice between going ahead with a renewable energy target and not getting the exemption for those big energy users, both the government and the coalition chose the big energy users above the renewable energy sector. According to the Clean Energy Council, that decision to delay in June has cost $2 million a week. So for all the rent-seekers pleading for the extra special treatment that they have been given under this legislation, it has cost the renewable energy industry a huge amount not only in dollar terms but also in terms of certainty and jobs and long-term planning. That is why I am pleased that this legislation is here. I will be working to get it through and I will not see anything that jeopardises its getting through as quickly as possible, because I want to see this industry sector expand.

I have to say that I was devastated to see the government under pressure again from the coalition to brown down this legislation by including coal gas in a renewable energy target. Coal gas is not a renewable energy source; it is a fossil fuel. It is a nonsense to watch in the lower house the government amending its own legislation to take out the word ‘renewable’ from several sectors of the renewable energy target legislation. What sort of a nonsense is that? I was reminded in fact of Alice in Wonderland, because I wondered at what point are people going to acknowledge the stupidity of what goes on in this parliament. I note that in the lower house Mr Hunt went on and talked about a ‘renewable gas’. So we now have coal methane as a renewable gas, according to the member Mr Hunt. I have to remind him of what Humpty Dumpty said to Alice in Wonderland. He said:

If I had a world of my own everything would be nonsense. Nothing would be what it is, because everything would be what it isn’t. And contrary wise, what is, it wouldn’t be. And what it wouldn’t be, it would. You see?

And so now we have a fossil fuel no longer being a fossil fuel; suddenly it is a renewable gas. What utter and complete nonsense that is!

No-one is saying that we ought not to be dealing with coal seam methane, with coalmine gas. Of course we should be dealing with that and, again, it is the incompetence of the government that they have failed to get a smooth transition from the New South Wales scheme GGAS. That should have been looked into. But the way to deal with this is to put pressure on the coalmines to ensure that they must deal with that gas. Those people who are currently generating energy from that gas are independent of the coal companies but the coal industry refuses to invest in it because it has not got a big enough return for them. They want 20 or 30 per cent return on their investments and they will not do it. So it is time that governments forced the coalmining industry to deal with its waste, and it should not be done under a renewable energy target because this is a financial mechanism to see the rollout of renewable energy.

Now you are going to see people around Australia who were quite prepared to pay an additional cost for renewable energy, because they thought it meant that solar was going out there, that wind was going out there, that they were seeing a big expansion out there. They were prepared to pay for that because they want to see the jobs, the manufactures, our brightest and our best in Australia doing this work that our universities are training them to do. Instead of that they are suddenly going to find that they are paying more for renewable electricity because coal seam methane is in there and we have exempted the big energy users. How is that reasonable? It ought to have been dealt with elsewhere and there is absolutely no justification, as I indicated, for these exemptions for the big industries, and I would like the government to respond to this.

The argument is that these industries are trade exposed. They are not trade exposed when it comes to a renewable energy target, because almost all of their competitors work under a renewable energy target. Have a look around the world and what have you got? In the United States many state governments have adopted renewable energy targets, including California’s target of 33 per cent of its electricity from renewables by 2020. Waxman-Markey also has a renewable energy component and the EU-wide renewable energy target for 20 per cent of final energy consumption is to come from renewables by 2020. The UK has got a target of 15 per cent, and on and on it goes. Japan has got a target. Canada has got a target. China has set a target of 15 per cent of primary energy supply to come from renewables by 2020. So all of them have got a renewable energy target. If anything, Australian aluminium has been sheltered because of the renewable energy targets imposed elsewhere. So tell me, in the absence of a CPRS, why should we exempt these companies from a renewable energy target when all their competitors are already paying that target?

Secondly, three of the four reports that were done on this showed that by bringing in renewable energy you are shaving off the peaks. In other words, on a hot summer’s afternoon you bring on your solar energy and so what otherwise would have been a higher pool price is actually brought down because you are bringing in that energy there. Three out of the four reports say that there is downward pressure on the wholesale pool price because you are bringing in the renewables. So if they are not paying for the renewable energy target and are exempt from it, how am I to be assured they are not going to get a windfall gain from this? They do not pay for the renewables, but they get the benefit from the dropped pool price.

At the moment, most of them do not care because they are on bulk power contracts, but they are going to have to renew those in this period when we are dealing with a renewable energy target. They are just looking after themselves to see that they get a windfall gain. I hope I can get the support of the coalition or the government to acknowledge that we do not want these sectors to get a windfall gain on the back of the Australian taxpayer, the average consumer out there, who is having to pay more so that the aluminium industry can do that.

What is even worse is that the long-term future of the aluminium industry depends on it producing green aluminium from renewable energy and not from coal fired power or anything else. It needs renewable energy to be competitive in a zero carbon economy. Unless we can get enough renewable energy in Australia to power these industries, they will then go offshore. The threat is not that they will go offshore now; there has been no-one suggesting that they would. Where would they go when everybody else around the world has got a renewable energy target? No, the threat to them is the failure to move off coal fired power, resulting in them ending up uncompetitive when their competitors have moved to green energy. Already there is green aluminium being produced from geothermal energy in other parts of the world. So let them take note of this: if we want a steel industry and an aluminium industry in Australia in the future then we need to transition to renewables as fast as possible.

Let me go through some of the other issues. Of course we want to see an expansion in the target to 30 per cent by 2020. We do not support the inclusion of coal seam methane, a fossil fuel, in a renewable energy target. We do understand the need to deal with coal seam methane, but it should have been done somewhere else—not in the renewable energy target and not requiring people to pay for it in that context.

We think a gross feed-in tariff should be brought in in addition to the renewable energy target for the reasons that I have said: to bring on geothermal, solar thermal and wave power. We believe the target should be expressed in percentage terms rather than in gigawatt hours. The reason for that is that if energy demand increases out to 2020 and you have set a specific gigawatt hour target then it will form less and less as a percentage of total energy. The ABARE report suggested it might only be 17 per cent if energy demand increases. So the Greens are saying: ‘Why not set it as a percentage target, and then the gigawatt hour target can reflect that percentage, rather than set a gigawatt hour target which may not necessarily, in the end, give us 20 per cent renewable energy?’

We are also saying that we should remove the 1.5 kilowatt hour cap for PV systems and in fact increase the cap to 10 kilowatt hours for other technology types such as small wind and hydro. This is particularly important for remote renewable systems, and it is a disaster. To get rid of one system supporting remote renewable systems and have nothing to replace it is another government disaster. There is nothing in this. Under the renewable energy target there is about a fifth of the level of support of the previous scheme for off-grid.

Let me talk about who these people are: these are Indigenous communities; these are farming communities; these are people who are not near the grid and who need this support to get off a reliance on diesel. It has been hugely successful and those senators in this chamber who represent areas in which there are communities living off-grid understand just how important this remote support was, and it is now gone. That is unacceptable. I want the government to come in here and accept this proposed Greens amendment to remove that 1.5 kilowatt hour cap so that we do not disadvantage those communities that are off-grid. If the government are not going to accept the proposed Greens amendment, what are they going to do for remote communities? You are prepared to bend over backwards for coal seam methane. You are prepared to bend over backwards for the aluminium industry with megaprofits. But where is the bending over backwards for remote communities? That is something we have to fix.

Another thing we need to fix is to add the number of phantom credits that are being created to the total target. Again, we want 20 per cent of energy to be renewable. If you give out five certificates for one unit of energy, you end up having given out, yes, the target number of renewable energy certificates, but that will not represent, in terms of energy, the same amount. We have to deal with that issue and we need to add those phantom credits onto the target.

We also need to limit the banking of renewable energy certificates to four years because we do not want to see a situation where there is so much generated in the first few years that the banking occurs but where you then have the old boom and bust cycle in investment in renewables. We want to even that out and we would like to limit banking to four years.

We also would like to see the operation of the scheme and the adequacy of the target reviewed after two years, not left until 2014. We think this needs to be carefully monitored and reviewed and, if necessary, the target needs to be adjusted upwards over this period of time. If you leave it until 2014, that will be too late in the scheme of things. We also want a review of the target to be triggered if the certificate price drops below a threshold of $40 for a period of six months. That is essentially a floor under the system, but we think that is necessary to maintain certainty in the longer term and to give some stability to the whole system.

I now want to come back to removing native vegetation. It is absolutely outrageous, and this is where doublespeak comes in. We had Minister Garrett at a global conference on biodiversity and ecosystems today saying that we have 1,750 species on the threatened species list in Australia and that we have to move to an ecosystem protection approach in order to look after our native ecosystems. And what have we got? We have a government subsidising native forest logging, the bottom dropping out of the woodchip market and the inclusion in this renewable energy target of, essentially, the burning of native forests.

I have had constituents writing in telling me that the woodchip mill in Eden—along with, of course, those in Tasmania—is just desperate for this to go ahead. I want the Minister for Climate Change and Water to tell me whether she is going to allow one certificate to be issued to a company like Gunns, Southern Forest or Eden, or to companies in southwest Western Australia for the destruction of native forest.

I would also like to know from Minister Garrett how that sits with the government’s new commitment to ecosystem support. This is from George Orwell’s novel Nineteen Eighty-Four, which was published in 1949. He had a definition for ‘doublespeak’, and that is what we have from the government when it comes to biodiversity protection and species protection and their support at the same time for the logging of native forests. You cannot have it both ways. As Orwell said at the time:

The power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them....To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies—all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.

That is what happens when you have a government saying, ‘We are worried about ecosystems,’ to a global biodiversity conference and then bringing in legislation here that permits the generation of energy from the logging of native forests. That is a complete nonsense—logging the largest carbon stores in the Southern Hemisphere for so-called renewable energy. It puts a bitter pill into the mouths of the people who actually want to have renewable energy to know that they are going to be paying not only for coal gas but for the logging of native forests in terms of that energy. The people rubbing their hands together are the logging industry. You only have to look at their contribution in evidence to the Senate committee to see that they are salivating at the prospect of putting a floor under logging of native forests. So that has got to come out of the legislation and I urge the coalition to support that.

Equally, on the issue of solar hot water and heat pumps, the Greens want to see solar hot water on every roof in the country. We want to see a massive expansion of energy efficiency. We should have an energy efficiency target and an energy efficiency scheme that supports solar hot water. But by putting it in the renewable energy target I fear that you are going to have crowding of the target with heat pumps and solar hot water and not benefit the renewable industry. We need to be doing both: we need to be reducing demand and increasing the supply of renewables. Energy efficiency for one target and renewable energy for another target—maximum benefit. What I am seeing here is yet again the government undermining the renewable energy sector by squeezing the space for the new technologies. It is in fact the Alice in Wonderland or the George Orwell scenario.