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Wednesday, 19 August 2009
Page: 5359

Senator MILNE (11:34 AM) —I rise to move the first group of Australian Greens amendments, which remove solar hot water heaters and heat pumps from the renewable energy legislation. This may seem counterintuitive and I want to explain why it is critical that this actually occurs. The Australian Greens totally support the rollout of solar hot water from one end of the country to the other. We would love to see it on every rooftop in the country, which is why we have a policy position to retrofit all of Australia’s houses with solar hot water. The government has not adopted a systemic approach such as the one the Greens advance. We want to see a national energy efficiency target and we want to see assistance for energy efficiency measures clearly go with that target. That is the place that solar hot water should have in an energy efficiency scheme. By lumping it in with the renewable energy target you are actually reducing the amount of energy that you are generating under the scheme—and I will get that to that in a minute. If the government does not want to have a national energy efficiency target and a scheme of financial mechanisms to support it, then the very least the government should be doing is increasing the renewable energy target to at least 30 per cent in order to accommodate solar hot water in the system but still leave room for the expansion of those technologies that actually generate renewable energy. The failure to have an energy efficiency scheme means we are crowding out the ability of generators of renewable energy to come in in the 20 per cent target. There are many academics who have put forward substantial papers on that.

One of the submitters to the Senate inquiry, Hugh Sadler, who has a huge amount of experience in this field, has pointed out that under the current MRET Scheme the installation of solar and heat-pump water heaters earns renewable energy certificates and they are equal to the additional number of megawatt hours of electricity that is deemed would have been consumed over the lifetime of the water heater had an electric resistance water heater been installed instead. The current bill retains this aspect of the scheme. But that is not consistent with the policy objectives of the renewable energy target. It will distort markets for water heaters and discriminate against other forms of water heating which have the same—or, in many cases, lower—levels of greenhouse gas emissions.

Data available shows that solar and water-pump heaters account for 24 per cent of all renewable energy certificates generated to the end of 2008. That means that the quantity of renewable electricity actually generated under MRET legislation is 24 per cent less than the normal program target. If this trend continues to next year, it will mean that renewable electricity generated is not 9,500 gigawatt hours in that year but 7,220 gigawatt hours. Indeed, the proportion of generated renewable energy certificates from this source has been steadily increasing over the last few years, which is consistent with the ABS data on the increasing market share of solar hot water, suggesting that the overall proportion of solar and heat-pumps generated certificates in 2010 may be more than 24 per cent. Because COAG has endorsed the National Strategy on Energy Efficiency, which includes a provision to phase out conventional electric resistance water heaters, we are going to see a huge expansion in the market. If it is assumed that solar and heat-pump systems will take 50 per cent of the new build and mandated replacement market, notwithstanding the target being four times larger than the current MRET, solar and heat-pump water heaters could account for nearly 20 per cent of the cumulative renewable energy certificates generated up to 2020.

That is not what this scheme was meant to be about. We do not want 20 per cent of the renewable energy target taken up by what is effectively an energy efficiency measure. That measure should be on top. If you are going to increase the target effectively by putting coal-seam methane on top, because it is not a renewable energy source, then you should be putting solar hot water on top because it too is an energy efficiency measure rather than a generator of renewable energy. It is a displacement mechanism rather than a generator of renewable energy. So I cannot see the consistency in saying we will bring in a non-renewable energy source and put it on top of the target, but we will not take out the energy efficiency measures and put it on top of the target. One can only assume it is because you understand clearly that by leaving it in there you are reducing the amount of renewable energy space for those technologies to roll out. That has to be a deliberate government measure, and it is a bad idea. Everybody in the renewable energy industry knows it is a bad idea.

We are also seeing incredible rorts with the heat pump market whereby some retailers are giving them away because of the generosity of the renewable energy certificate arrangements. That is nothing but a total rort going on out there. What we want to see is a genuine 20 per cent of renewable energy by 2020 being delivered by the government. The Greens want to go further by saying it should be 30 per cent. If you were genuine about it you would add on the energy efficiency measures on top of the 20 per cent if you are doing it for coal-seam methane.

I would like to ask the minister, in responding to this amendment: what percentage of the 20 per cent does she estimate is going to be taken up by solar hot water and heat pumps and how much, therefore, are we actually going to get in terms of renewable energy generation? Deeming an energy efficiency measure to be a renewable energy measure does not work. What if someone puts something in the wrong place? What if you do not get the levels of efficiency, and so on? I would just like to know from the minister, given the changes in COAG in relation to this and the deeming provisions: what amount of renewable energy does she actually expect to get from her target, given that the estimation is 20 per cent of the cumulative RETs generated up to 2020 are going to come from this particular energy efficiency measure and not renewables?