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Thursday, 12 December 2002
Page: 8043

Senator O'BRIEN (12:05 AM) —I rise to speak on the Renewable Energy (Electricity) Amendment Bill 2002. I am not sure what our status is, but I understand that the House of Representatives could have used some renewable energy a little while ago. The House of Representatives adjourned until they could see properly.

Senator Alston —They are more delicate than we are.

Senator O'BRIEN —I will take that interjection. I am sure your colleagues will appreciate it. In view of the fact that the minister has incorporated his second reading speech, I seek leave to have my speech on the second reading incorporated in Hansard.

Leave granted.

The speech read as follows—

The Renewable Energy (Electricity) Amendment Bill 2002 aims to improve the administrative integrity, effectiveness and efficiency of the Renewable Energy Electricity Act 2000. That act established the mandatory renewable energy target, frequently referred to by people as the MRET, of an additional 9,500 megawatts of renewable energy by 2010.

This bill seeks to clarify definitions used in the act, including the definition of eligible renewable energy sources and the components of a power station. It seeks to clarify the provisions in relation to a relevant acquisition of electricity to ensure that only one entity is made liable in relation to the purchase of a particular quantum of electricity.

Further, it seeks to clarify the provisions with respect to the claiming of renewable energy certificates associated with solar water heaters and to expedite the process by which certificates can be claimed for new solar water heater models as they become commercially available.

The bill seeks to provide the Renewable Energy Regulator with the power to vary a number of assessments and determinations under the act, including the energy acquisition statement, the renewable energy shortfall statement and the 1997 eligible renewable energy baselines for accredited power stations.

It also seeks to provide the Renewable Energy Regulator with information gathering powers to enable effective monitoring and compliance with the provisions of the legislation and to allow for the suspension of an accredited power station under a number of circumstances, including where there is thought to be `gaming', whereby power station outputs may be manipulated to increase the number of renewable energy certificates that can be created without increasing the actual renewable energy generation.

I think it's fair to say that the government's proposed amendments represent an improvement to the MRET scheme and therefore Labor supports them.

The original Act sought to accelerate the uptake of renewable energy in grid based applications so as to reduce greenhouse gas emissions; as part of a broader strategic package, to stimulate renewable energy generation and provide an ongoing base for the development of commercially competitive renewable energy; and to contribute to the development of internationally competitive industries which could enter the growing Asian energy market.

The renewable energy sector can contribute significantly to Australia's well being—both environmentally and economically.

Besides the obvious greenhouse benefits, this sector has enormous potential to create jobs in regional areas such as Tasmania, and build Australia's skill base.

Overseas experience shows this to be the case. For example, the UK's fast wind turbine plant, a $30 million project, provides 170 jobs. And in California where they have a 20% renewable energy target, they expect to create 3,000 permanent jobs.

The signs are there for this to be replicated in Australia.

Hydro Tasmania, who currently produce 60% of Australia's renewable energy, and 100% of Tasmania's energy on a renewable basis, have unveiled plans to spend $208 million over the next ten years just on refurbishment of their existing assets to increase their efficiency.

In total, Hydro Tasmania plans to invest $1 billion in Australia over the next ten years. This money will go into projects such as the mini hydro at Butler's Gorge producing an additional 35.5 Mega Watts, and sustaining jobs in Tasmania.

Another major project is the Woolnorth Wind Generation project. This project is already generating 10.5 MW and will when completed, produce 130MW, much of it bound for effort to the mainland via Bass Link.

Because of the level of commitment Hydro Tasmania has to the wind generation business as well as to its home State, it has successfully entered into a joint venture arrangement with European firm Vestas to build a factory for Nacelle assembly.

Initially, 100 people will be employed in tower and nacelle construction. But with the continuation of wind generation development, there is a growing opportunity for blade manufacture to occur in Tasmania. This would mean potentially a further 400 jobs—high skilled jobs, contributing to the Tasmanian economy and the growing of a skill base within Tasmania that is increasingly in demand world-wide.

Another key driver of course of the significant investments proposed by Hydro Tasmania is the development of Bass Link.

For years, Tasmania has exported fine cheeses and wine, beef and forestry products to the mainland—even footballers of the calibre of Daryl Baldock And now, with the with the approval the Bass Link project, we shall soon export green energy to the mainland, and displace greenhouse gas emitting fossil. fuels in Melbourne during peak periods in the hot summer months.

Labor, in the States of Tasmania and Victoria, and Federally have shown their support for Bass Link by giving it approval after rigorous environmental examination.

What a pity that those opposite cannot claim such a position of solidarity with their State colleagues on the issue of Bass Link. Who can forget the grandstanding from the Victorian Nationals threatening to block the planning amendments that enabled the project to proceed?

What a telling indication of the coalition's commitment to Tasmania, their interstate colleagues standing in the way of the development of a new and valuable industry, and Tasmanian Senators opposite doing nothing to rein them in.

Of course we know that this government has very little commitment to Tasmania. This government's sugar tax will unfairly hit low income families in Tasmania, and damage the competitiveness of Tasmanian food and beverage industries against international rivals.

I note that Senators opposite who purport to represent the people of Tasmania were deafening in their silence when it came to speaking out against this grossly ill-conceived tom, one which in all likelihood will cost Tasmanian workers their jobs.

Labor is committed to Tasmania, to renewable energy and to the reduction in greenhouse gasses. This is why Shadow Cabinet have endorsed the position of my Colleague, the Shadow Minister for the Environment in proposing a 5% renewable energy target by 2010.

It should be remembered that the government's target of two per cent was revised by the government and converted into a target of 9,500 gigawatt hours.

The latest electricity generation projections developed for the Australian Greenhouse Office in projecting greenhouse emissions for the stationary energy sector anticipate higher rates of growth.

Based on these projections the Business Council for Sustainable energy anticipates electricity generation in 2010 to be considerably higher, at 270,000 GWh.

So as a consequence, instead of being a two per cent additional target, which it was supposed to be, 9,500 gigawatt hours really only constitutes a target of around half of one per cent.

So we have a Coalition that is not committed to Bass Link, has considerably less commitment to renewable energy targets that Labor has, and is not committed to Tasmania.

But the lack of commitment from this government to renewable energy now appears to be turning to outright sabotage.

I refer of course to the recently released draft report by former Liberal Minister and `old mate', Mr Warwick Parer. His report has recommended that MRET be abolished altogether.

This is an irresponsible recommendation. It has destabilised what is a fledgling growth industry which has been making investment decisions on the basis of the expectations created by MRET.

It could potentially stop Bass Link in its tracks. Bass Link is effectively useless without Hydro Tasmania increasing its output to export levels. And remember also that Hydro Tasmania cites MRET as the key driver in their $1 billion investment plans.

Without MRET, this investment at risk, as are the jobs it will generate, as is the opportunity for the Tasmanian economy to add a major and sustainable export industry to its economic base.

Parer says we should move to a national carbon trading scheme, which is something that the Labor Party has always promoted.

But the renewable energy sector will need something more than that, because a national trading scheme will be of greatest benefit to the traditional generation industries.

My colleague in the other place, the member for Hunter has pointed out that the Parer review fails in a number of areas.

It does not offer sufficient consumer protection and guarantee affordable supplies of energy for Australian families.

It does not guarantee long-term energy supply security and competitively priced power for the development of Australian industries and jobs.

It does not provide effective mechanisms for encouraging greater investment in the renewables sector.

And what a surprise, it does not offer an achievable objective in terns of agreement with the states.

As my colleague the Member for Hunter said in the Other Place, the Parer recommendations simply set up the Howard government for a blame the states' approach to energy policy in this country.

A blame the States approach from the Howard Government—you can, Mr President, imagine my surprise!

This of course is the same approach that the Howard government takes on all the hard issues.

Take for instance Exceptional Circumstances drought relief reform.

The Federal Agriculture Minister, Warren Truss has been trying for two years to reform the EC process with the States. In fact, Mr Truss makes a virtue of his failure by constantly reminding us that he's been at it for two years.

Yet, after two years, on this issue as with so many others, he's dead in the water. And according to Mr Truss who is at fault? Of course, those evil Labor States.

According to Mr Truss his failure is the State's fault. How could he possibly be expected to negotiate sensibly with Labor Premiers and Ministers?

Possibly, one might answer, “in the same way that Simon Crean as Primary Industries Minister negotiated the National Drought Strategy in good faith with the States in 1994”. And let's remember back in 1994, seven of the States and Territories were in the hands of the Liberal and National Coalition.

And yet Mr Crean, through good faith and good policy managed to get them to the table, and get them to sign up.

Instead of blame and cost shifting, games Mr Truss has excelled at in recent times, it is Labor's approach in 1994 that must be taken again to the hard issues such as natural resources and energy management.

Labor believes that MRET is vital to the development of the renewable energy industry and to reducing Australia's greenhouse gas emissions and to the welfare of regional Australia. Labor will not scrap MRET, which the government report recommends; we will increase the renewable energy target to a minimum of five per cent by 2010.

There is research available to demonstrate that increasing the target to five per cent would boost local renewable energy production, it would help us to achieve our Kyoto target by reducing greenhouse gas emissions and it would build a sustainable renewable energy industry for the future. This is an achievable, workable and significant target. It is an important step, and it represents a significant improvement on the present regime.

There was a lot of debate, when the original legislation went through, about the use of native forest biomass. Concerns were expressed about the difficulty in defining waste. Timber that is not to be harvested often has high biodiversity and habitat value. There were concerns about the difficulty in limiting use to legitimate waste, the potential for an increase in overall harvesting due to the added economic incentives associated with the renewable energy certificates as biomass extractions, not limited under the RFAs, and the impact on greenhouse emissions.

Labor believes that this is an issue that should be examined by the forthcoming review. Some of the things that the review should examine are whether the MRET target should be five per cent or a higher figure; whether there is a significant problem regarding the baselines and understand-overs for existing hydrogenerators and, if so, how it should be resolved detriment to legitimate investment plans, undertaken by organisations such as Hydro-Tasmania in increasing renewable generation capacity.

The review should also address the use of native forest residue as a potential source of renewable energy eligible for renewable energy certificates—based on independent and scientific assessment of its impacts.

Such a review would need to examine the effect on forest biodiversity, the level of biomass remaining in native forests; the role of plantations and whether it is appropriate that they are excluded from the NMET definition.

These are all things that that the government's MRET review needs to consider.

It is interesting to note that initial CSIRO studies have already demonstrated that the use of forest residues, that is residues from forests already being harvested for other purposes such as saw and veneer log timber, has the potential to contribute to a reduction in greenhouse gas emissions if managed sustainably.

The reason we need to have a renewable energy industry in this country is that the world's past energy patterns are unsustainable. We are already suffering some of the impacts of this in climate change around the world, including here in Australia.

The Prime Minister, Mr Anderson, and occasionally even Mr Truss talk about government initiatives to assist people who are affected by the drought. Australia should do its bit to tackle climate change and to reduce our greenhouse gas emissions. CSIRO projections are that as a result of climate change, there will be more severe and more frequent droughts in years to come.

And in the short term at least, more drought will mean more rural communities afflicted by drought subjected also to the flat-footed and ill-conceived responses of this government to their plight.

We will see not only droughts but also more frequent and more severe bushfires, floods and cyclones.

If the Howard government is concerned about the plight of farmers and the impact of drought, it would get serious about tackling climate change. It would ratify the Kyoto protocol on climate change.

And if it were serious about regional development and rural communities, if it were committed to Tasmania, it would not seek to scrap the renewable energy target and to undermine that push into renewable energy.

It would seek to build on that work.