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Thursday, 27 August 2020
Page: 5749

Mr TAYLOR (Hume—Minister for Energy and Emissions Reduction) (10:24): I move:

That this bill be now read a second time.

Today is the first legislative milestone in our 'technology, not taxes' approach to reducing emissions while we keep the economy strong and support job creation. Today marks the next step in the establishment of the Morrison government's landmark $1 billion Grid Reliability Fund.

The fund will help Australian households and businesses to access the affordable, reliable energy we all rely on. It will support private investment in new energy generation and transmission construction projects. This will not only create new job opportunities for local communities but will help keep the lights on across the grid and drive prices down.

Of course, my priority as Minister for Energy and Emissions Reductions has been to lower prices as we bring down emissions.

Today, through the Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020we are committing $1 billion to delivering this priority.

We are already seeing results.

Annual wholesale energy prices across eastern Australia are continuing to fall, with 12 months of reductions in wholesale prices.

In 2019 we saw for the first time a record four consecutive quarters of CPI price reductions.

We understand how important price reductions are for Australian families and businesses, particularly during COVID-19. Wholesale energy prices make up around 30 per cent of residential energy bills and even more for businesses.

Cheaper energy bills reduce the financial pressure on families and help businesses create the jobs Australia needs as we rebuild following the pandemic.

This bill will amend the Clean Energy Finance Corporation Act 2012 to establish the Grid Reliability Fund. The fund will encourage private investment in the generation, energy storage and transmission projects needed to balance the grid and deliver affordable power.

The new fund will not divert the CEFC's existing $10 billion allocation and will not change the CEFC's ability to make its own individual investment decisions.

The fund will benefit energy market participants by providing a trusted counterparty to investments, allowing the CEFC to support private sector involvement.

The government has consulted with the CEFC and other relevant agencies on the implementation of these amendments. Once this bill is passed, the operational parameters of the fund will be settled and prescribed in a new investment mandate.

While there is no shortage of investment in clean energy, the government has identified a lack of investment in the dispatchable generation needed to balance increasing intermittent generation.

The additional funding will enable investment in:

Energy storage projects, such as pumped hydro and batteries

Electricity generation, transmission and distribution; and

Grid stabilising technologies.

Gas projects, which the CEFC can already invest in, including new gas-fired generation will be included in the fund when a project supports the achievement of low-emissions energy systems.

Battery technologies are intended to be eligible, regardless of how they source electricity.

Low-emission technologies under the CEFC Act would not extend to coal-fired generation.

The fund will also support eligible projects shortlisted under the Underwriting New Generation Investments program, in line with the CEFC's investment mandate.

The UNGI program will deliver new reliable generation into the market, putting downward pressure on prices. The upgrades to the infrastructure and transmission lines will unlock more power and underpin reliability as ageing generators exit the system. This will not only increase energy market competition and supply but also improve reliability by increasing the level of firm capacity in the system.

Under this bill, the CEFC will be able to make investments to maximise the benefits for the taxpayer, the reliability of the grid and for emissions reduction as we bring prices down.

By boosting grid reliability investments, we will be better able to support our growing renewable capacity.

Last year, 2019, was a record year for new renewable capacity installed in Australia.

The Clean Energy Regulator reports that 6.3 gigawatts of new renewable capacity, both large and small scale, was installed in 2019. This is 24 per cent above the previous record of 5.1 gigawatts installed in 2018. The CER advise we will see similar levels of investment this calendar year.

Australia is a world leader in the uptake of rooftop solar, with almost one in four Australians now having a solar system on their roof.

The rooftop solar sector is delivering increased capacity of 33 per cent year on year, with the CER not detecting any slowdown due to the pandemic—indeed, quite the opposite.

To ensure we can continue to be a world leader, we must back more grid reliability investments, such as flexible gas generators or significant pumped hydro projects like Snowy 2.0.

The fund also supports the objectives of the Technology Investment Roadmap, part of the government's long-term emissions reduction strategy. Through pursuing a technology, not taxes, approach, we will achieve our emissions reduction targets cost effectively while maintaining our energy security and affordability.

This bill represents an important next step in the Morrison government's commitment to securing our energy future and supporting long-term emissions reduction. We are proud to be introducing a bill that will create jobs and make a real difference to Australian businesses and families by keeping the lights on and power prices low.

I urge members to support the passage of this bill, which will advance the technologies we need to support a low-emissions, affordable energy system in Australia.

I commend this bill to the House.

Debate adjourned.