Renewable Energy (Electricity) Amendment Bill 2015 Bills

I rise to make a few remarks on this topic. One of the confounds in all the discussion on this theory is that, somehow, the free energy that comes from renewables is going to make life better for people, in terms of cheaper energy and more jobs. One of the things that interests me is looking at the question around jobs, and I look at the King Juan Carlos University in Spain, who did a study on the job outcomes of their focus on renewable energy—which were that for every job that was created in the renewable space on a sustainable basis, some 2½ jobs of traditional infrastructure and industries were destroyed. And so, whilst there were jobs created during the construction phase, long-term there was a net loss in jobs in Spain.

We also see the other confound in the argument that has just been put forward around the issue of energy pricing. In my home state of South Australia, we have the nation’s largest percentage of renewable energy, and yet we also have the nation’s highest power prices. One of the reasons that I think we should be concerned about the drive to continuously increase renewable energy is that we need affordable power pricing to keep industries going which employ people. Renewable energy at this stage, whether we are talking wind or solar, cannot provide baseload power and so, even where we see renewable energy providing an increasing percentage of baseload power, we still have to keep in reserve, if you like, the ability to provide baseload power from either coal or gas—in the case of South Australia—which means that as they lose market share to the taxpayer-subsidised renewable sector, their costs—which they have to amortise across the ability to maintain their potential to provide 100 per cent baseload power—increase continuously per unit of power that they are able to sell. And so we get to this perverse situation, where one day we may end up having to subsidise people who are burning fossil fuels in order to enable them to continue to provide that assurance of baseload power, because the renewable sector cannot. And so, whilst it is appealing at one level to hear the debate that endless amounts of sun means endless amounts of free energy, the reality right now is that for South Australia, increasing amounts for renewables—which on the one hand looks very attractive; but on the other hand we also have the highest power costs in the nation—has a detrimental impact on the ability of industry to still function, to compete in a global environment, and to employ Australians, and means that we see increasing pressure on the non-renewable sector, which is still required to provide that backup of the potential of providing 100 per cent of our baseload power.

So whilst over time we have seen governments of both persuasions invest in renewable energy—and I recall the coalition investing in things like solar near Whyalla in South Australia and geothermal in northern South Australia—the reality is that large-scale subsidy of renewable power has not delivered the nirvana that we are hoping for. This decision to look at reducing the target is an appropriate balance of saying: let’s continue some investment in renewables, but let’s also recognise that an unrestrained increase in those targets could well lead, as we have seen, to increasing pricing, which makes it more difficult for communities to continue to operate industries and to employ people, which sustains the very economy that we are hoping to be the basis of Australia’s future in terms of innovation, manufacturing and jobs. For that reason I support the bill brought forward by the government.