Posted on Tuesday, 21 August, 2018
Mr RAMSEY (Grey—Government Whip) (16:23): This matter of public importance today focuses on 'The Government's chaos and division on energy policy which is forcing Australians to pay higher power prices'. But they're not paying higher power prices, actually; power prices are receding. Let me give you the numbers.
In South Australia, we have provided an example to the rest of the Australia of what happens if you allow policy to not be properly controlled and the transition on energy to not be properly controlled. The rampant policy, the RET, got out of control, and it was harvested by the former South Australian government to a point where we have 52 per cent renewable energy in South Australia. That in itself would be a good thing if we weren't at risk of the lights going out and didn't have the most expensive electricity in the nation. But it is coming down. In fact, South Australia's wholesale price for electricity in 2017 was $108 a megawatt hour. This is the average price. In 2018 it was $98, and so far this year it's $89. So it is coming down. Those prices are starting to come through into the retail yields.
I had a publican the other day tell me that his latest offer is $15,000 a quarter less than the one he was on before. As a result, he can put somebody new back on the payroll. He said, 'This is good progress, but we need more.' And we know we need more, which is why this government is dedicated to making sure those prices keep going in that direction.
We have been focused on the NEG, but it's not the only firecracker in the cupboard. In fact, the work the Prime Minister and the energy minister had done prior to now is very important in what's been happening with electricity prices in Australia. The legislation that was passed on having the ability to curtail gas exports until the major companies put more gas on the Australian market, effectively almost halving the price of spot price gas, has been absolutely integral in this recession of prices.
A lot of people may not understand, but the price that the whole electricity column receives is the last price bid into the system. In so many cases—in fact, almost 40 per cent of cases now—the last price bid into the system is gas. The effective halving of gas prices has brought down the time that open cycle gas-fired peaking stations come onboard, the figure at which they kick into gear. This has put the pressure down on the whole electrical column. It also comes after the Prime Minister brought the electrical retailers into the office and gave them a good talking to—about being clear, direct and transparent with their customers. This has enabled thousands of customers Australia wide to change companies and chase down a better deal.
There are other things on offer. The Labor Party is pursuing a 50 per cent renewable target. We have 50 per cent renewable in South Australia and we have the dearest electricity in the nation. That is a problem. I think the push of the NEG, and that's what we're trying to do at the moment, is to turn a lot of that renewable energy into base-load energy. If we legislate the NEG, the hot market in South Australia will be investment in storage, and that is exactly what we need to do. If you just pursue renewable energy and do not take into account how this changes the total format, the total complexity of the way energy is delivered, you will—not you personally, Mr Deputy Speaker, but whoever that proponent is—fall on hard times. What happened in South Australia will happen to you. You blow up the system. You lead to a point where you cannot supply. And even now, while the prices have backed off, we are still the highest in Australia, and it would be much worse if we did not have an interconnector to Victoria.
The ALP is aiming for 50 per cent renewables but the Greens are going for 90 per cent. The Labor Party are chasing a 45 per cent cut in CO2 emissions when our commitment in Paris is 26 per cent.