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Wednesday, 2 November 2011
Page: 12606


Ms GRIERSON (Newcastle) (11:22): I rise to speak in support of the Australian Renewable Energy Agency Bill 2011 and related bill. This government has set a renewable energy target of 20 per cent by 2020. I note with some satisfaction that it is a bipartisan target—at times, something quite surprising—and that these bills are designed to encourage the investment in clean energy technologies that is necessary to achieve this target.

In Climate Change Denial: Heads in the Sand, two Australian scientists, Haydn Washington and John Cook, wrote:

… to solve climate change will … require a rapid and major conversion to renewable energy, as we have delayed for so long.

Perhaps they refer to the 12 wasted years of the Howard-Abbott government. In Labor's four brief years in government we have had to make a great deal of catch-up policy. Carbon pollution, emitted as a by-product of electricity generation, is easier to reduce than any other major source of pollution, especially agriculture and transport. But, until the efforts of this government, there has been little incentive to undertake these reductions.

Under the Howard government, renewable energy use, as a proportion of total energy consumption, actively declined. As a result of the former Howard government's failure to support innovation in renewable energy production by investing in research and development, there remains a significant cost gap between renewable energy such as solar and conventional forms of energy such as black and brown coal.

The Australian Bureau of Agricultural and Resource Economics's inaugural Energy resource assessment found:

With the exception of hydro and wind energy (which is growing strongly), many of these resources are largely undeveloped, constrained by the current immaturity of technologies.

According to Professors Michael Dopita and Robert Williamson of the Australian Academy of Science:

The impact upon the climate caused by our current energy use cannot be sustained. … There exists a large difference between the price paid by consumers in Australia for electrical energy, over 80% of which is produced from black and brown coal, and the true cost of this energy, when we factor in the environmental impacts. Such market distortions hinder the development and deployment of cleaner alternatives.

Without cost competitiveness, there will be no renewable industry. These bills, in conjunction with the package of carbon pricing reforms contained in the Clean Energy Future legislation, are designed to incentivise increased uptake of renewable energy by increasing the commercial viability of renewable-power generation as compared to non-renewable forms of energy production such as black and brown coal.

Research commissioned by the Clean Energy Future Group and contained in the 2004 report A clean energy future for Australia found that Australia's greenhouse pollution could be halved by 2040 through a combination of energy efficiency and switching to currently available clean energy technologies. As this report indicates, commercialisation of research is vital.

These bills create a statutory authority, the Australian Renewable Energy Agency, ARENA, to administer funding for research, development and commercialisation of renewable energy and related technologies. The authority will be independent and not subject to governmental direction, excepting a number of safeguard provisions designed to ensure appropriate accountability and management.

The establishment of ARENA will streamline and centralise the administration of $3.2 billion in existing funding for renewable energy, currently managed by the Department of Resources, Energy and Tourism; the Australian Solar Institute, which is headquartered in my electorate of Newcastle; and the Australian Centre for Renewable Energy.

According to Jenny Goddard, the chair of the board of the Australian Solar Institute:

This should allow a more strategic approach to setting priorities for government support across all renewable energy technologies and better connected and coordinated administration and program delivery in any one area of technology ... The establishment of ARENA will also include welcome longer term funding certainty and increased total funding for renewable programs.

The Clean Energy Council, likewise, believe:

The establishment of ARENA provides an opportunity for consolidation of the various programs currently spread out across the two agencies and develop a more co-ordinated approach to policy development and program delivery.

The Australian Renewable Energy Agency Bill identifies the core functions of the agency as being:

… the storage and sharing of information and knowledge about renewable energy technologies…

and:

… to liaise with State and Territory governments and other authorities for the purpose of facilitating renewable energy projects for which financial assistance is, or is proposed to be, provided …

ARENA will also be responsible for providing policy advice to the Minister for Resources and Energy and will build on the advisory functions of the Australian Centre for Renewable Energy. The agency will be tasked with promoting collaboration with state and territory governments and other interested and relevant stakeholders to support renewable energy technology innovation.

A key priority for ARENA's board will be the development of a rolling three-year funding strategy identifying ARENA's principal objectives and priorities for receipt of financial assistance, determined via a merit based assessment process.

In the Australian Solar Institute, investment in solar energy research has accelerated market innovation in photovoltaic and concentrating solar thermal technologies, and I would encourage the future ARENA board to provide adequate funding for solar research to look closely at the Australian Solar Institute's model. I would also encourage the ARENA board to maintain the investment in solar research so that Australia remains at the forefront of solar energy research and development.

The Australian Solar Institute has already committed $90 million in funding for renewable projects since its establishment. By the end of June 2011, the ASI held a research portfolio with a total project value of approximately $200 million, having attracted or leveraged off more than $115 million of additional funding from domestic and international industry, research institutions and state governments. Attracting such a high level of private investment through partnership is a highly commendable performance, and I congratulate the Australian Solar Institute on all that they have achieved. I know that they work with a very small staff, and have a very lean administration—and I also recommend that to ARENA, because the money has gone into research and actual projects. As I have said, leveraging that sort of money from the private sector and other research entities makes it an outstanding model.

Fortunately the establishment of ARENA should not delay the delivery of existing renewable energy projects and initiatives. The ASI will continue to develop its existing programs, with ARENA taking responsibility for these initiatives as well as any uncommitted funding when the ASI is wound up by 31 December 2012. ASI has had a particular funding focus on technologies not yet commercialised, supporting technology that will increase the commercial uptake of solar energy by reducing the lifetime cost of solar energy production. CSIRO Newcastle saw funding for projects to develop advanced solar thermal energy storage technologies, advanced steam generating receivers for high concentration solar collectors, solar powered air turbine systems, a novel thermoelectric topping cycle receiver for CST applications and others to characterise the effect of high penetration solar intermittency on Australian electricity networks.

A $5 million foundation grant from the institute funded Australia's largest solar thermal research hub and tower at CSIRO's Solar Energy Centre in Newcastle. The tower, opened by the Prime Minister in June this year with the Minister for Resources and Energy, is 30 metres high and has been developed in partnership with Mitsubishi from Japan and the Spanish government. As I heard the member for Chisholm say, finding that investment is very important; but I am particularly pleased to know that this project will be rolled out into the Western Australian mining areas because already in its initial stages it is cost-competitive with diesel. So we are seeing gains and I congratulate the ASI and wish all its staff a satisfying future.

The impact of these and other investments in renewable energy will be furthered by the $10 billion Clean Energy Finance Corporation that this government will establish in order to invest in firms utilising renewable energy and energy-efficient and low-emission technologies so as to overcome capital market barriers to the commercialisation of clean energy technologies. Those barriers are real, and they include the lack of Australian investment. The Smart Grid, Smart City program in my electorate has many international partners and, having met many of them just recently at the opening of their information centre on the harbour in Newcastle, I know they are so excited to be part of this scale of investment in renewable technologies. Other countries are investing, yes, but we are being very strategic and very smart in the way we are doing it, particularly in terms of the grid—managing the grid, managing renewable grids, bringing grids in together and managing peak and off-peak in grids. These are things that people thought were happening that really had not happened until this government came to power. Dividends returned from investments made by the Clean Energy Finance Corporation will be administered by ARENA to support the development of renewable technologies.

The Secretary-General of the OECD, Angel Gurria, said earlier this year:

... our economies need a change of engine ... Renewable energies are the only future viable source if we want to protect life.

The Australian government has developed a long-term plan to transition to a clean energy future and we are reshaping the energy market through research and development and the commercialisation of renewable technologies to foster greater environmental sustainability. What is the market economy but a construct, so it does not exist independent of civil society, and through bills such as these and the clean energy future reform package we will create an environmentally sustainable economy by implementing policies that foster investment and provide an incentive for people to use and to generate renewable energy. We can create a clean energy future while still growing our economy, as Sweden has done. The two are not mutually exclusive, as some on the other side of the House would suggest. Since 1990, Sweden's economy has grown by 50 per cent while they have reduced greenhouse emissions by 10 per cent. The report of the Australian Conservation Foundation and the ACTU, Green gold rush, concluded:

... ambitious environmental policies have an impressive track record in generating innovation, industry development, job creation and economic prosperity.

Every Australian knows that our nation has unmatched renewable resources. Wind capacity factors are five to 10 per cent higher, on average, than in the EU. We have extensive geothermal resources and we experience longer sunlight hours and more intense solar radiation than many other countries. Yet a report by Bloomberg New Energy Finance last year ranked Australia 12th on installed capacity for renewable power generation; we do need to do some catching up. According to Erwin Jackson, the deputy chief executive of the Climate Institute, 'global clean energy investments now outstrip traditional fossil fuel investments year-in, year-out', despite Australia accounting for just 0.8 per cent of total global investment in renewable energy—0.8 per cent of total global investment when China is investing one per cent of its GDP into renewable energy. We have an energy intensive economy and higher per capita energy consumption than most modern economies such as Germany. Described as the world's first major renewable economy, renewable energy consumption in Germany is predicted to reach 33 per cent by 2020.

We all have a part to play in creating a cleaner economy. We have benefited so much from a carbon based economy; perhaps our complacency was something that we now understand has a price. This week though, in my electorate, the Newcastle Herald reported that energy consumption in the Hunter region has decreased by up to 4.6 per cent in the past year, with this energy saving attributed to increased uptake of energy efficient appliances and more energy efficient behaviour. I congratulate the Together Todayprogram run by the Newcastle City Council, and of course all the renewable energy and clean energy programs in my electorate that have been very much part of the public information campaign and business changes as well.

By creating a long-term funding pipeline for research and development, and the commercialisation of renewable energy through the establishment of ARENA, these bills will help to make renewable energy a realistic option for the Australian community and I commend them to the House.

In conclusion, I would like to praise the Newcastle Institute for Energy and Resources. Having visited the institute recently, and I will be visiting there again on Friday, I know that their work has been outstanding. I also heard in other members' speeches about some of the collaborations that are happening to make sure we do develop technologies like solar paint. I also congratulate the Enterprise Connect Centre, the Clean Technology Innovation Centre and the Smart Grid, Smart City initiative in my electorate on their good work, and I encourage the quest for renewable energy in this country.