Dr HAINES (Indi) (12:59): This is an important and overdue piece of legislation. The Grid Reliability Fund is a $1 billion investment in new energy generation, storage and transmission infrastructure, designed to improve the reliability of the electricity grid. I believe it’s important that we pass this legislation, because this government has, for too long, presided over a deterioration of our electricity grid—the poles and wires that bring electrons from where they’re generated to where they’re used.
Chronic underinvestment in critical infrastructure in regional Australia is holding up investment in new electricity projects, costing regional jobs and driving up power prices. Few Australians will have heard of the West Murray Zone, but this triangle of land in the Riverina, bordered by Ballarat, Broken Hill and Dederang in my electorate of Indi, is ground zero of the government’s failure to secure our electricity supply. The West Murray Zone is a region that has attracted significant investment in renewables, but it has not had the corresponding investment in the electricity grid to support those renewables. As a result, last year the Australian Energy Market Operator declared that the region’s grid was so unstable that it forced five new renewable power stations across regional Victoria and New South Wales to cut their production by 50 per cent. This was done simply to stabilise the grid, not because renewables are the problem but because the government failed to plan for their integration. For those five regional communities, that means half the revenue and half the profits, and it went on for seven months. Just imagine you set up a cafe—you made all the investments, hired the staff, brought in the food and set up refrigerators—and then the day you were going to open the government told you that you couldn’t because the footpath out the front hadn’t been fixed yet. It’s this kind of thing that regional communities face.
The crisis in the electricity grid is directly affecting my electorate of Indi, because there are several renewable power stations in Indi that have been delayed for years because of weaknesses in the grid. For instance, the new Goorambat East Solar Farm, which would power 105,000 homes once it’s built, is shovel-ready but can’t proceed because the grid issues need to be fixed. It’s one of several projects that would create hundreds of jobs in construction and dozens in ongoing maintenance and operations and would generate new income for the local people, but it can’t proceed because the government has spent years failing to fix the issues in the grid.
It’s well overdue now that the government looks Australia right in the eye, is honest about the fundamental transition that we’re facing in our energy system and plans properly to ensure that it happens smoothly. I’m sorry to say that the National Party’s big vision to solve our energy problems in regional Australia at present is to build more coal-fired power stations. We know that the National Party has been around for 101 years, and I really wish they’d get some new ideas on this. The places where renewables will boom are places like the Mallee, New England, the Riverina and my electorate. They’re all held by regional MPs and, with the exception of Indi, those on that list are all held by the National Party. Instead of fighting back the tide, I encourage my colleagues in the National Party to make this renewable energy boom really deliver for their constituents. I think they should be the biggest advocates of renewables in the country, because it’s their constituents who stand to gain the most, if we plan this transition properly. This legislation is one way of helping to plan this transition.
Standing up for the regions means putting money into the transmission network, which is actually costing regional jobs and supporting regional communities to tap into this unstoppable renewable energy boom. But these facts are not my views; they’re straight from the government’s own engineers who run the electricity system. A report from AEMO in September into the five-year forecast of electricity reliability said that delays in the commissioning of over 1,900 megawatts of variable renewable energy is reducing reliability in Victoria—that is, we would have more reliability if we could bring those renewables online faster. It is the engineers running the grid saying this. The reason I’m going into these technical details is simply to make the point that this bill is so important precisely because it is a rare example of the government dealing with the actual problems in the energy system. Rather than mucking around or playing with the politics of climate, we need to get right back to the issues at hand.
But there’s another component of this bill that I want to comment on. The Grid Reliability Fund is finally putting into action the government’s Underwriting New Generation Investment scheme. The UNGI scheme was announced over two years ago. At the time, the government said we were facing an urgent lack of dispatchable power—that is, energy that can be generated whenever we want, like hydro or batteries. The UNGI scheme was designed to incentivise new investment in dispatchable energy by underwriting new private investments. The government would partner with private companies to take on part of the risk of these new projects.
This idea, in principle, could make sense. If there is a market failure, if private companies aren’t building certain types of energy projects that benefit our society, then there is a clear rationale for government stepping in. But I’ve got some real concerns about the way the government has undertaken the UNGI scheme. To start with, it’s been incredibly slow. It was first announced in 2018. They took expressions of interest in January 2019, over two years ago, and shortlisted 12 projects in March of that year. In the two years since, the only thing that has happened is that they’ve shortlisted two gas projects for consideration. No projects have been funded and nothing has actually been done.
As the grid has fallen under increased strain and jobs have been lost to renewables in regional Australia, what real action has been done? It was just last week that one of the shortlisted companies from two years ago pulled its project from the list, saying this has gone on for too long and their project was no longer viable. Secondly, a scheme that was framed as being about dispatchable energy seems that it could indeed turn out to be a mechanism to drive taxpayer money into fossil fuels.
The bill before us expands the rules to allow the Clean Energy Finance Corporation to more easily invest in gas projects; and because these projects are unlikely to be economic without this investment, it also changes the rules to allow the CEFC to invest in loss-making projects. Just think about that for a minute. The CEFC is a bank owned by the taxpayer that so far has invested billions of our dollars into clean energy projects that have made money. And the government is trying to change the rules to allow investments in fossil fuels that lose money—that lose all our money.
The government says ‘there’s nothing to see here’ because the CEFC can already invest in gas. But this is a red herring. Let me explain why. Right now, the CEFC is able to invest in gas power under extremely restrictive circumstances—specifically, if the gas station would have less than 50 per cent of the emissions of the grid as a whole. And the CEFC has to make sure that, at any time, at least half of their investments are directly in renewables. This fund has none of those safeguards. According to the rules, all of this $1 billion could be invested in gas power—even if it was emissions intensive, as all gas power is. The government is quite literally changing the definition of ‘low emissions’ to mean ‘any emissions’. It’s right there in the explanatory memorandum written by the government to explain the bill. It says in black and white that item 33 expands the scope of low-emission technology and that certain types of gas-fired electricity generation will now fall under this new definition.
Again, if you ask AEMO what Australia needs to achieve to get cheap, clean and reliable power, they are crystal clear: it’s more renewables, more storage and more transmission, not new gas. AEMO’s analysis shows that the optimum pathway to meet our energy needs over the next two decades would be to build the equivalent of 16,000 new wind turbines and five new Snowy Hydro schemes and put rooftop solar on another 10 million households. This is the pathway we’re on, and we in this place need to be clear. If we plan this right, this will be fantastic news for regional Australia. Indi is one of several dozen regions identified across Australia as the best places to build renewables. We have enough hydro power potential in the hills and mountains of the Victorian high country to meet Australia’s total energy storage needs 13 times over. Let’s invest here. The member for Mallee’s electorate is another one with huge solar potential around Mildura and the west. Let’s invest there. The electorates of Parkes, Calare and New England sit on top of massive new renewable energy zones in New South Wales. Let’s invest there. Let’s make sure that this massive investment actually creates lasting prosperity in the regions by creating well-paying, long-lasting local jobs and by creating new sources of income that actually flow back into regional Australia. If the government is willing to underwrite new energy investments, let’s make them locally owned investments that are driven by the local community so, instead of profits going elsewhere, the profits stay right where they are made.
Last year, I had the pleasure of opening Australia’s largest community owned solar farm right here in the ACT. The Majura Community Solar Farm was built from small investments by 600 members of the local community who now collectively own it and will earn dividends from their investment. Every regional community in Australia could be developing these projects. If the government were willing to come in and underwrite a wave of investment in these projects, we could unlock billions in private capital, building a string of these renewable power stations right across the regions, lowering power bills and building energy security.
Despite my serious reservations, this bill makes long-overdue investments in the grid that will unlock new investments in the regions and new jobs in Indi. But it needs to be amended. I will support the amendments from the members for Warringah and Melbourne which would maintain the ban on the government investing in uneconomic gas projects, projects that won’t deliver benefits to Indi or benefits to regional Australia, and I’ll be moving my own amendment to make sure that the Grid Reliability Fund can only invest in projects that demonstrate they are delivering significant benefits to the local community through local jobs, procurement and decision-making, because $1 billion of new investment in regional Australia should be done with and for us, not to us.
Next week, I’ll be tabling a bill to establish a new sister agency to the CEFC. My proposed agency, the Australian Local Power Agency, would drive investment in community owned renewables and would make sure that renewable energy is benefited from in the local communities where the investments are being made. These regional communities need to see the profits that are available to them. I’m all for renewables. That’s pretty clear. But it has to be done in a way that actually benefits regional Australia: local jobs, local procurement, local investment and local benefits. That’s what’s missing from the government’s policy agenda, and that’s what I’ll be bringing to parliament next week.