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Electricity Supply Industry Amendment (Price Cap) Bill 2018

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Tuesday, 16 October 2018

Tags: Renewable Energy, Legislation, IPCC, TasNetworks, Aurora

Dr WOODRUFF (Franklin) - Mr Deputy Speaker, I rise on behalf of the Greens to provide inprinciple support for this bill, as we did when a similar bill came before us last year.

We have concerns, which we raised last year, regarding putting off the requirement for a review of the wholesale electricity price. We cannot look at a bill such as this without noting the failure of the federal Liberal Government to provide leadership in the national electricity market to set the conditions that would provide safe and secure production of electricity, low prices and a reduction in carbon dioxide emissions.

Coal-fired power stations and gas power stations are by far the dominant way we generate electricity in Australia. It is the relationship between the coal lobby and the federal Liberal Party that has created the situation where the current Prime Minister of Australia is proud to hold up a lump of coal in parliament. He is proud of the fact that he has brought our country to its knees in terms of renewable electricity generation. He is proud of the fact that he has done everything he possibly can as the leader of the federal Liberal Party to scuttle our commitments to the Paris Agreement. He pretends we will meet our global commitments for reducing greenhouse gas emissions at a canter. He is lying to the Tasmanian people. We have to say it for what it is. It is a lie to pretend that Australia is pulling its weight in doing what is needed to bring down our proportion of greenhouse gas emissions.

We provide 80 per cent of the coal to burn in the newly built south-east Asian coal-fired power plants. This is at the same time that the latest report from the IPCC makes it clear we have 12 years to act. If we do not make radical and dramatic reductions in burning coal to between 0 per cent and 2 per cent of current emissions within 12 years we will be on track to a 2 per cent increase in global average climate temperatures. We in this place and most people who would read Hansard understand what will happen to the global climate if we reach that limit.

We have to do everything we can. We can no longer pretend we are only 1 per cent of the world's population and we have not more responsibility to act than other countries. We have as much responsibility to act and more. We are the supplier of coal to the majority of the coal-fired power stations in the world. We are that country. We can make that change.

This bill hides the fact that we have the ability to make people's power prices far cheaper in Tasmania than they currently are; much, much cheaper than this bill will entrench. All this does is talk about the Office of the Tasmanian Economic Regulator and the maximum amount that pegs it to an increase in the CPI, but it puts off the independent review for another three years, which ought and was required to be done under the initial Electricity Supply Industry Act. This is already overdue. It has been put off by another year. It was put off last year and this bill again pushes it back.

It allows Hydro to charge as much as they want for a wholesale electricity price. It allows Hydro, as the Minister for Energy was describing, to continue this mad race toward spending $2.5 billion. We have not even seen anything like a back of an envelope estimate of an economic viability case for spending $2.5 billion and how that is going to be good for the electricity prices of Tasmanians. Where will the money come from? The federal Government has made a commitment to Snowy 2.0 and, because of national competition rules, the federal Government cannot intervene in the market and create an unfair situation with other private companies so it is taking over Snowy 2.0. It is taking over the Snowy Hydro system so that it will invest a substantial amount of money in that hydro-electric system, create hydro-pumped power and retrofit the Snowy Hydro system so that it can provide stability, renewable energy and other forms of energy to the national electricity grid.

In so doing, it will be charging. Were Tasmania to put in a second interlink, a second Basslink, essentially, we would be competing with Snowy 2.0. Energy experts, people who know far more about this than I do, are of the view that we as a state would not be granted some largesse from the federal Government toward putting another cable across Bass Strait to help us and make us this notional battery of the nation. There are no free lunches in energy policy. We would not ever be getting $2.5 billion from the federal Government. If we did receive $2.5 billion from the federal Government, it would not be for anything else. That would be all our money for Launceston water and sewerage, all our money for Bridgewater bridges, all our money for all the other major infrastructure we need as a state, the money we need to shore up our best opportunities for adapting to climate change volatility in infrastructure, in transport, in building strength and in protecting communities.

The money we need to be going into those sorts of projects would be gobbled up to provide a service, essentially for mainland Australia. It seems the energy experts are of the view that the pumped hydro service is far better provided by facilities that are closely located to the renewable energy generation sites. The losses across the system are substantial. It would be probable that they would be in the order of a 40 per cent loss in electricity generated in Tasmania and sent to, say, South Australia. They are substantial losses and when they are measured overall, when such big sums of money are being considered, they do not make any sense. It does not make sense to have this big investment of $2.5 billion in a pumped hydro so that is can somehow bail out South Australia in a hot summer event in future.

What is the point of this conversation? The point is that we have a Minister for Energy, who persists in deluding himself and Tasmanians about the idea of another big dream, thought bubble, about what we should be doing with our energy dollars in the future. All the expertise we have in Hydro, TasNetworks and Aurora, all the great skills and innovation we have in Tasmania, should be directed full on into preparing us as a state to reduce our reliance on liquid fuels, to become 100 per cent renewable and more by 2022. The Liberals have, fantastically, picked up the Greens policy of becoming renewable energy by 2022. Good on them, but we -

Mr Barnett - Thank you.

Dr WOODRUFF - The Greens policy, Mr Barnett, is not to become 100 per cent renewable by 2022 but to become 100 per cent renewable and be able to export all the time, which is more than 100 per cent.

It is great that we are starting on it but we have to be self-secure because we are so reliant on power we take from the mainland. The dams are at around 50 per cent, which is excellent. We are in the good times at the moment but we have an El Nino this summer. That is expected to bring less severe droughts for Tasmania than the east coast of Australia. As an aside, my heart really bleeds thinking about people in eastern Australia, the severe drought they are already in and the much more severe one they have ahead of them. We ought to pause to reflect on people who are having a really hard time living on the land trying to create our food.

Now is the time to focus. According to the international climate change experts, we have 12 years to put our heads down, to look at our dependence on liquid fuels that come across the ocean and to do everything we can to transfer our state from our dependence on fossil fuels into renewable energy.

We support the principle of people in Tasmania being removed from the umbilical cord that attached us to the wholesale electricity price in Victoria, which was at a historically low level, something like $50 per megawatt hour, but skyrocketed when Hazelwood closed. It skyrocketed because the federal Liberal Government refused to take long-term preventative action so there was a plan in place for when that happened and when it will happen with the other coal fired power stations and gas power stations in the near future. It will happen because it has to. We have to stop using that form of power whether we like it or not. That has to happen so soon.

We support the work of OTER in being the independent economic regulator which is kept at arm's length, but we think the wholesale electricity price review should not be put off. That is an independent review that should be done immediately. We made this point last year. The sooner we do it, the sooner we can look at how Hydro can reduce its component of the bill -because it is a part of the bill - and the sooner we can have a really deep dive into Hydro's books and look at the smoke and mirrors around the prices they are charging for the wholesale electricity and what else can be done to bring that price down so we know some of that money is not being spent on thought bubbles but should be focused much more on the things Tasmanians need to be concerned about such as adaptation to live in a more volatile climate.

On behalf of the Greens, I am happy to support this bill but urge the Energy minister to consider the points I have raised and to pay attention to people who are asking for actions on a target for liquid fuels and actions on a proper target in this state for energy efficiency, because we know that energy efficiency makes the most difference to people's power bills. We have a situation where we still have people in rental houses who do not have heat pumps, proper insulation in the roof, insulation in the walls and the opportunity to put solar panels on the roof to reduce their power bill.

When we had a Greens housing minister, Cassy O'Connor effected some amazing energy efficiency for some 9500 houses in Tasmania. Those people's lives have been immeasurably improved by living in more comfortable houses. Importantly, they are the lucky ones who will have the lower power bills. Regardless of what we do here, it is the sorts of houses we live in that make the biggest difference to our electricity bills. It is generally people who are more well off who are able to make those changes and if we want to get to the nub of reducing people's power bills, giving support to people on low incomes to make their houses energy efficient would be a great program this Government could introduce.