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Monday, 21 June 2010
Page: 3743

Senator MILNE (1:32 PM) —I rise today to welcome the changes that are coming before the Senate to address the problems with the renewable energy target. I remind the Senate and Senator Boswell, who has just resumed his seat, that when I spoke on this legislation, the Renewable Energy (Electricity) (Charge) Amendment Bill 2010 and related bills, last year I pointed out this problem would occur. I cited evidence from Dr Mark Diesendorf, at the ANU, pointing out that if solar hot water systems and heat pumps were left in the program we would see a flooding of the market, a collapse in the price and that it would be a disaster for large-scale renewables. The then minister for Climate Change and Water at the time said to me that that was not correct. In fact, she quoted from her department—and of course it is the minister’s responsibility to take note of the modelling—to the effect that the MMA modelling:

… indicates that less than five per cent of the renewable energy target would be taken up by solar hot water and by heat pumps.

The government department got it incredibly wrong and did not listen to the industry at the time and, as a result, we have had a stalling of investment in large-scale renewables that was foreseen and that should have been dealt with. At that time I moved an amendment and, sadly, I did not get the support of anyone in the Senate—even Senator Boswell and The Nationals did not support it, even though now they recognise that that was the situation. The really wonderful thing is that this is a chance to participate in the energy revolution. This is a revolution every bit as big as the telecommunications revolution that is going on around the planet. The wonderful thing is that we are seeing an explosion in new forms of energy that are taking over from past forms. I think it is shocking that there are people in the Senate who want to stop the revolution—they want to stop this massive change that is taking place around the world.

When this legislation came in—and this is part of what we are now trying to fix—the government proposed a regime whereby you had 1.5 kilowatt system with a five multiplier. In less than 12 months solar panels came down in price by 40 per cent—and that is an extraordinary figure. That is how fast this revolution is progressing around the world. Because of the critical mass volume that is occurring around the world, systems are getting cheaper and so they are more within the reach of ordinary people. But the point I made last year was that we should go for a much greater ambition than 20 per cent renewable energy by 2020.

Senator Boswell —Come on!

Senator MILNE —We should go much higher, Senator Boswell. I want to see this nation powered by renewable energy. I know Senator Boswell is from the mining party, which used to be known as the National Party but is now the coalmining party, which want to take over Australia’s farmlands and—

The ACTING DEPUTY PRESIDENT (Senator Carol Brown)—Senator Boswell, do you have a point of order?

Senator Boswell —Madam Acting Deputy President, that is untrue and Senator Milne knows it.

The ACTING DEPUTY PRESIDENT —Senator Boswell, do you have a point of order?

Senator Boswell —Madam Acting Deputy President, my point of order is that Senator Milne named the National Party mischievously, and I would ask her to apologise to the chair and to the Senate and withdraw.

The ACTING DEPUTY PRESIDENT —I believe that Senator Milne is using debating points and that there is no point of order.

Senator MILNE —Thank you, Madam Acting Deputy President; that is certainly correct. From my observation of what is going on on the Darling Downs and in several places in the Hunter Valley, we are seeing farmland being taken over by the coalminers, and I do not hear too much dissent on that from the National Party.

However, I do not want to be distracted by that, because this is a very good news story we are telling about the growth of renewable energy all around the world and no more so than in Australia, where we have fantastic new technologies in the labs, being commercialised and getting rolled out. We should, as I was saying, go much higher than 20 per cent renewables. We should be aiming to have 100 per cent renewable energy as fast as we can, because it is in that conversion to 100 per cent renewable energy that we will not only see a massive reduction in greenhouse gas emissions but see technologies rolled out in Australia, rebuild the manufacturing industry in this country in these new technologies and be able to sell the IP overseas as well. So it is a win-win-win for this nation to move on.

In rural and regional Australia, this is a huge opportunity to build resilience in rural and regional communities. Large-scale renewables out there can provide new sources of income and jobs in rural and regional towns and cities. I have been arguing for some time that we need a national gross feed-in tariff across the country. We will then see people who are on properties now and are struggling to adapt to climate change being able to make money—add another crop to their rotation, if you like—by building large-scale renewables on their properties as a result of joint ventures, lease arrangements or whatever they decide to do. There is a property in Northern Tasmania whose owner already would like to put up six turbines on the property because, as the owner recognises, it is a long-term strategy for income, it would strengthen the grid and it is a much more certain form of income for someone in rural and regional Tasmania than a lot of the other propositions that are being put up there.

The reason we do not have a national gross feed-in tariff is that this parliament did not support the legislation that I brought in here to do that and instead sent it to COAG, which is a black hole from which hardly anything ever emerges that is useful. The national gross feed-in tariff is buried in COAG. While it has been buried there, every state in Australia has adopted a different system. That is why we have a major policy conundrum that we are trying to address now in terms of the renewable energy target. We have a situation where New South Wales has a very generous feed-in tariff. In New South Wales, with a 1.5-kilowatt system with a five multiplier, that means that the system is virtually free of cost to the consumer. However, the same system in Tasmania, where there is not a feed-in tariff, will cost you about $5,000 from most suppliers and $2½ thousand at the very cheapest. So we have a situation where the industry itself has identified that in some places in Australia systems will be virtually free, and that opens us up to all the vulnerabilities that occurred with the insulation scheme, because once you get something for free you get shonky operators in the market, you get an overheated market, you do not have enough qualified people who are installers, you do not have the audit processes in place and you get disaster.

What are we to do to fix this policy conundrum? Some of the people in the solar industry have said: ‘Well, let’s change it. Let’s increase the size of the system to three kilowatts and let’s reduce the multiplier to three.’ Whilst that would slow down demand in New South Wales and so would stop the situation that I just described occurring, what would that mean in Tasmania? It would mean that a 1.5-kilowatt system would end up being $9,000 and a three-kilowatt system would be as high as $15,000. It would be $10,000 at the very cheapest but more likely around $15,000. That means you have a terrible inequity occurring around the country. Surely it would not be seen as reasonable for the government to bring in a system that makes these systems so out of reach for the average householder in Tasmania to go ahead and install a solar system.

One of the amendments that I have is, first of all, a second reading amendment that we move to a national gross feed-in tariff across the country so that we stop this differential occurring around the various states depending on the level of support that they have. Victoria is pretty similar to Tasmania in terms of the price differentials. In the absence of the government supporting a national gross feed-in tariff, the Greens have been saying that at the very least we need to take the size of the system and the multiplier out of the legislation and put them in the regulations so that the minister can move quickly in the event that the market is flooded or some of these problems occur, as we expect them to occur, and there needs to be something in the interim to slow this down. Isn’t it amazing that we are standing here in this parliament talking about slowing down or trying to even out the demand because there is so much excitement in the community and so much willingness to take up renewable energy? It is very, very promising in terms of where we need to be going in this country in the future.

The first point is that it is fabulous that we are back here to fix it, but it is very sad that we needed to do it, because this problem was on the table when this legislation was introduced, but for some reason or other the department got it completely wrong. The Greens have been campaigning ever since to have this fixed, so I take a particular pleasure in its coming back here to be fixed. I do want to see a national gross feed-in tariff and I will continue to campaign for that until ultimately we achieve it, because that is what has driven the renewable energy revolution in Europe, in Spain and in Germany, and it should be driving the very same renewable energy revolution, basically, here in Australia.

In terms of energy efficiency, one way that this should be fixed is to have a national energy efficiency target and an energy efficiency program so that we take out the solar hot water and the heat pumps from this system. They are energy efficiency measures and they should be in an energy efficiency program, but in the absence of an energy efficiency program we have to give them support. Last year, I said, ‘Let’s put them on top of the target until we have a national energy efficiency program,’ and that is effectively what is going on here.

I note the minister is in the chamber now. I do want to ask her a question and perhaps she can give me a response at some point: what is the government’s view on geothermal heat? There have been a lot of suggestions and submissions to me from people working in the area of geothermal heat that they should be earning renewable energy certificates as well. It has also been suggested that evacuated tube solar systems should also earn renewable energy certificates. Ideally, they should be in an energy efficiency program but, since they are not, if solar hot water is to get RETs why would evacuated tubes not get RETS?

Would the minister also let me know what is happening with heat pumps. I understood that COAG was going to review the number of RETs that heat pumps get, and I do not think there has ever been any response publicly to the COAG response on that. I am not surprised. As I said, if you want to get something off the public agenda, if you want to kill it and throw it into a black hole, the best way of doing that is to send it off to COAG because it never comes out the other end, or if it does it is so many years later that people have forgotten what the issue was at the time that it was actually referred to COAG.

Waste coalmine gas is not a renewable energy source. It never was and it never has been. It is a fossil fuel and it should not be in the renewable energy target scheme. The only reason it was put in there in the first place was that there was an assumption that the Carbon Pollution Reduction Scheme would go through and that that would substitute for the GGAS program in New South Wales. When the CPRS did not proceed and the assumption was that the GGAS program would end, it was added to the top of the target. Now that the GGAS program in New South Wales is not ending, I do not see why there is any longer any justification at all for the inclusion of waste coalmine gas, and I urge the government to take that out.

I want also to speak about native forest furnaces. There is a complete and total collapse around the country in the forest industry. The world does not want to buy any more native forest woodchips because there is a growing recognition that our forests not only are marvellous for the stores of biodiversity they have but also, equally, are carbon stores to which virtually nothing can compare. They are fantastic carbon stores and we should not have the government subsidising the logging of native forests. The rest of the world has recognised that and the market has totally collapsed. At the same time, there is a wall of wood coming on stream from plantations around the world and so the Australian forest industry is in collapse. The obvious solution is to stop the logging of native forests, protect those forests for their biodiversity, water and carbon stores and shift the industry into downstreaming the plantation resource.

However, the forest industry does not see it that way. They want to continue logging native forests. They cannot at the moment because they cannot sell it, so what they have come up with is: ‘Let’s have a fabulous idea. Let’s cut down our native forests and put them in forest-burning furnaces and generate energy for that. Let’s get renewable energy certificates for it.’ Wouldn’t that be a fabulous idea? Keep truck wheels rolling and keep people working, destroying the best carbon stores in the world—our native forests!

So this legislation has in the renewable energy target the capacity to generate renewable energy certificates from waste wood biomass, provided that that waste wood biomass comes from a higher value source. Whilst currently the government would argue, ‘It’s not generating many renewable energy certificates at the moment; therefore it’s not a problem,’ it is a problem because the native forest industry around the country is depending on getting renewable energy certificates. We have Eden, in New South Wales, Orbost, in Victoria and the southern forests in Tasmania and in the north-west, not to mention the proposed furnace at the Gunns pulp mill. All over the country the forest industry has said—and in its pulp and paper strategy—that a key component for the future of that industry is being able to burn native forests for renewable energy certificates.

I urge the Senate to support this amendment when I bring it forward in the committee stage and take out any reference to being able to use native forests. In fact, I urge the Senate to rule it out completely as a source of renewable energy certificates. It would be an utter and absolute disgrace if, instead of protecting our native forests, the government took the line, ‘We need to keep the jobs of people cutting down native forests so we’ll give them to them in feeding the furnaces.’ That would be appalling. Already that is occurring with the export of some of our woodchips to Japan. They are not going, as people thought, for the making of pulp and paper; they are going straight into the furnaces in Japan as we speak. I think people would be horrified to learn that our magnificent forests, with all the wildlife in them, the water sources that they are and the carbon stores that they are, are being knocked down to burn. So I would urge the Senate to support the Greens amendment on ending this practice of native forest logging, but also this amendment to stop the knocking down of our native forests for putting into furnaces.

One other matter that I will raise in the amendments is the banking of renewable energy certificates. Between now and 1 January many renewable energy certificates will be created. The problem is that all of those certificates will be in the large-scale renewable energy target. The concern here is that, if they are more than $16 million, they will drop the price of the renewable energy certificates in the big RET and the result will still be no incentive to bring on wind. So the Greens are going to move a motion to say that anything in excess of $16 million banked at the end of the year should be taken out and put on the target in future years so that we do not see a further disincentive for the bringing on of large-scale renewables. That is a critical issue, because—at one point, if you have had the flooding, and we are back here to fix up that issue—to not deal with the banking issue just means we are going to contribute further to problems for large-scale renewables, and it is absolutely essential that that takes place.

We have other amendments as well: in terms of a biennial review of the act, and also to make sure that we take into account off-grid systems, because we have seen, with the changes, the loss of support for the large-scale systems, particularly in Indigenous communities. I want to see some support for that restored, and I will be moving for that in the committee stage.

The Greens will be supporting this bill, and I look forward to the Senate’s support this time for amendments that genuinely deal with the policy issues. I plead with the Senate to get behind the Greens in addressing this. It is something we have argued for, and I am pleased to see we are back here dealing with it.