Speeches

Adjournment Energy

Mr RAMSEY (GreyGovernment Whip) (16:35): Sometimes you know when you've come into the right place and it's your place in time—when all your little ducks line up, if you like. And so it is with the National Energy Guarantee. I've been in this place since the 2007 election. It would be fair to say that over that time there has been a bit of repartee and a few objections between the two sides of parliament on how best to address the need for nations of the world to reduce CO2 but also keep the lights on and keep the electricity system working. We've had a number of schemes, including the carbon tax, which proved to be a fair bit of a lemon. We've had the Renewable Energy Target, which was initially instigated under the Howard government but ramped up rapidly and markedly under the Labor government.

That Renewable Energy Target has had a huge effect on investment in renewable energy around Australia. Prima facie, that's a good thing. In South Australia, in fact, 50 per cent of our energy comes from renewable energy and you would think that also is a good thing. But as early as 2012 I was talking to Alinta about the state and the future of the Northern Power Station at Port Augusta. The issue became painfully obvious to me and to them because, after investing around $170 million, they were losing a million dollars a month. The problem was that, as the amount of renewable energy rose, the number of days that Alinta could sell electricity into the market at a profit was reducing, to the point where there were about 50 to 70 days a year where they could actually sell electricity at a profit. It was obvious they had to close.

On the day they closed, wholesale electricity prices in South Australia virtually doubled overnight—just like that. We were running at around $60 a megawatt hour and we went up to $120 a megawatt hour. What an astonishing thing it was. It just showed how much we needed storage and how much we needed baseload electricity in our system. In the ramp-up to that period, Alinta went to the South Australian government. We know this because a letter was leaked sometime later. They said, 'We will keep this power station open for anything up to 15 years'—because they had 15 years of life left in them—'for $8 million a year.' The South Australian government said no. They said no and now they are spending over $550 million applying bandaids to the disastrous situation we have in South Australia now.

All that is behind us. It is what it is. The South Australian government was solely responsible for that spectacular act of blowing up a good power station. We've since had the Finkel review. The Finkel review made some really interesting recommendations. One was that in some regions we need to make sure that new renewable energy is accompanied by storage. So it is in South Australia. The report that's been brought down by the expert committee, led by Alan Finkel, has recommended a reliability guarantee, which means baseload electricity. We need some baseload electricity. That will be the case in South Australia. We need an emissions guarantee. Under the emissions guarantee in South Australia, we probably won't build a lot of new renewable energy generators. But there is absolutely nothing to stop people building up reliable energy with renewable energy, and they will do so. We will do so in Port Augusta with a solar thermal tower, because that will be baseload electricity. There is every opportunity to turn renewable electricity into baseload electricity. But what renewable energy does have to do now under these recommendations is compete against every other form of electricity, because we know we've already met that renewable target.

I know this policy is on the right track. I am excited by this policy. I know it's going to solve the climate wars in Australia. But we do need some partners. We need bipartisan support, because one of the things that's been holding up electricity in Australia for the last 10 years is lack of certainty in the investment cycle. We need the two sides of politics to come together behind the recommendations of the expert panel and give that certainty to industry so it can get on with the job.

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