Standing Committee on the Environment and Energy – Report


Peter Khalil: I’m pleased to be able to speak to the Powering our future report by the Standing Committee on the Environment and Energy on modernising Australia’s electricity grid. Firstly I’d like to echo the sentiments of my Labor colleague the member for Shortland, Mr Conroy, and commend the committee on the report and for the non-partisan way we worked towards this report. We worked very effectively together. In fact, there were members from four different political parties, and we came to enjoy that process greatly, given that there tends to be quite a lot of partisanship in this place.

I’d also like to acknowledge our chair, the member for Mallee, Andrew Broad, on that front. His chairmanship was a catalyst in ensuring that we worked in a very constructive and non-partisan fashion. In fact, one of our first meetings was all about making sure that we could add something constructive and worthwhile in the policy debate and to make a contribution to that policy in the national interest. I’d also like to thank the secretariat for their wonderful work throughout the whole process.

The energy debate is something that, obviously, we cannot allow petty partisanship to impede. Clearly, energy is something that modern society cannot do without, due to the advances in technology and the vast amount of information that is being exchanged every second. Just as we need energy to power the modern world, Australia cannot afford to leave itself behind by not modernising its electricity grid.

Partisanship is impeding progress in the energy debate that we’re currently having—not in our committee, but outside of it. Indeed, the very first recommendation of this report speaks to this problem: that to truly thrive and progress in any industry there must be some relative stability. The toing and froing in the energy debate has led the Energy Council, the peak body for generators, to express that the Australian parliament has been unable to agree or settle on a policy since 2009, and that is shameful. I hope with this report we have made some progress towards eliminating the stalemate or stasis that we’re currently in.

A lack of policy certainty leads to a lack of industry and market certainty, which has an adverse impact on investment and innovation. The report states:

The policy certainty required relates to a mechanism to achieve emissions reduction in the electricity sector. The electricity sector is capital intensive and a lack of policy certainty has undermined investment in the sector.

This simply cannot continue. An enduring and stable mechanism can fuel investment whilst being able to address the issues that Australia’s electricity grid faces, namely those of security, reliability and affordability.

I would also like to make note of recommendation 16, which recommends that the AEMO consider establishing renewable energy zones. In my view, this is absolutely vital if Australia is serious about tackling climate change and reducing its carbon emissions. This recommendation is linked to the first recommendation insofar as the uncertainty around energy policy—particularly around renewable energy—has really inhibited meaningful investment in renewable energy. Serious investment is needed in renewable energy zones to take advantage of some of the most significant solar radiation in the world and of our great wind resources. These are natural resources that Australia has an abundance of, and it would be foolish not to take advantage of those. However, to achieve this there needs to be carefully thought-out planning and sufficient investment in the grid.

Other recommendations worth noting are recommendation 4, which talks about speeding up rule-making, and recommendation 5, which talks about greater parliamentary oversight of the recommendations from the Finkel report. These are recommendations referring to industry demands and responses as regards energy efficiency—vital to reducing sector demand, whilst providing a revenue stream for manufacturers.

I won’t go through all the recommendations but I’d like to touch on some of the energy grid security needed. Australia’s energy grid requires security around frequency control, ancillary services and inertia responses. The review found that renewable energy can provide all the security services—provided there is adequate planning and sufficient investment. This has been one of the criticisms around renewable energy—that it couldn’t adequately provide this security. Our review finds that it can, obviously with the important caveat that there is sufficient investment and planning in place. Renewable energy is relatively new. Those who wish to politicise it have made it a contentious issue. As such, in the renewable energy sector’s short life span it’s not been called upon to provide these particular services. Once a good and stable regulatory framework is in place, the sector will be able to provide such services.

Lastly, we must understand that the traditional resources—coal, gas and the like—are not the only resources at Australia’s disposal. Australia has been referred to as the lucky country. It certainly is in many respects, although I’ve always argued we’re the lucky ones to be Australian—to be blessed to be part of this country. But we are blessed with great natural resources in Australia. And the technology has now advanced to the point where we can harness those new resources, which was not really possible in days gone by, and we can convert those resources into energy.

Australia’s riches lie in its vastness, its geographic diversity, and, if we are shrewd and we shrewdly invest in renewable energy, Australia can have multiple and diverse sources of renewable energy scattered across the country powering the grid—solar, wind and wave generated electricity powering Australia. This is not just an investment for the energy grid; the report really looks at an investment for future generations of Australians. Just as this is a reality in other countries, it can be a reality in Australia if we get our act together. On that basis, I commend the report to the House and encourage all people to get a copy and read it.