Wednesday, 20 March 2019.
Mr NEWBURY (Brighton) (15:43):
I am particularly pleased to rise on this issue.
At the outset I want to put my view on record. Traditional energy resources are limited. Our climate is changing. Renewable resources on the other hand are sustainable, support a balanced environment and can be naturally replenished. Renewable energy is the future. We as legislators need to lead and support the transformation of our energy market to renewables.
Those comments are not simply motherhood statements. The Australian Energy Market Operator has also projected that Victoria’s energy industry will shift towards renewables. AEMO has projected fundamental change in our energy generation over the next 20 years. Its report Integrated System Plan, released mid last year, predicts that roughly two-thirds of power generation will come from wind and solar, and I quote:
Record levels of newly committed renewable generation development … is already on a path to wide-scale, fundamental transformation.
As a new legislator in this place, that gives me comfort because I know that positive change is well underway and that transformation will happen in my lifetime.
What concerns me is that Victoria is unprepared for that wide scale transformation. On a state-by-state comparison Victoria is notably behind. All states have aggressive plans for renewable transformation. However, this government is yet to develop the strategic planning pieces that will support wide scale transformation. We need to do more than set aspirational targets.
We need only look over our border into New South Wales to see how that government has supported change in a concrete way. In November 2018 that government released its particularly strong road map through its Transmission Infrastructure Strategy. The Victorian government has yet to show similar leadership.
We have already been handicapped by this lack of strategic planning. Industry is becoming increasingly concerned that this government needs to do more than set targets. In fact industry is now concerned that without a plan the government’s target will become unachievable. Industry is also concerned that the government has not got a grip on the regulatory reform needed to make this plan happen, especially when Labor’s default position is not smart regulation; it is over-regulation. Twenty years ago Victoria was a national leader on energy. Twenty years ago we were a net exporter of energy. Labor has been in government for most of the last 20 years. We are now a state of blackouts and a state that is forced to import energy.
In late January hundreds of thousands of Victorians suffered blackouts, and it was not the first time that we have seen them. Many Victorians were affected, including residents in my own electorate in Brighton, Brighton East, Elwood and Hampton. I recall a constituent of mine phoning me in tears because he was so concerned about his 74 and 76-year-old parents. I also remember the effect of blackouts on my local small businesses. When a small business is forced to close its doors early it hurts them. It really hurts them. Those Victorians affected by blackouts were left angry by the misleading statements of our government. In fact only a day before this year’s blackouts Minister D’Ambrosio guaranteed Victorians that she was absolutely confident there would be no blackouts.
Those broken promises left Victorians incensed, and it was disappointing to see our Premier overtly and trickily mislead Victorians as to the cause of the problem. Instead of showing leadership and setting out a pathway for change, the Premier diverted the issue and blamed a former Premier. The Premier’s intervention was political and cheap. What the blackouts have shown is that we are not properly prepared for the transformation of our energy market. With all due respect to the member for Mill Park, you can see that in the drafting of the matter of public importance.
What industry has consistently said to me is that cultivating a renewable energy industry will not happen overnight, and it will not happen by itself. Effectively we are heading down a path of fundamentally changing our energy market model from a model with a small number of energy generators to one with tens of thousands of generators. It is exciting, but there is growing concern from industry that it will take more than a target to achieve that change. One of their chief concerns is the issue of transmission and connectability. Our model has not been designed to plug in numerous thousands of new energy generators, nor do our current regulations support such a transformation.
Changing our energy generation model will require significant strategic planning and infrastructure work. Only recently Stuart Benjamin of the government’s own Grampians New Energy Taskforce highlighted that point. He belled the cat by saying that limitations on infrastructure are inhibiting renewable projects, and I quote:
We’ve got $3 billion worth of projects currently underway …and if some of the limitations that we’re seeing in terms of infrastructure are addressed, we could possibly double or even triple that number.
James Prest of the Australian National University’s Energy Change Institute has voiced similar concerns. Although the Australian Energy Market Operator has suggested as much as 5 000 megawatts of renewable energy could be generated in the state’s west, Prest says:
It’s really a bit like building a high-tech, modern greenhouse for agricultural production, and then attempting to get the produce to market down a one-lane bush track, which frequently becomes flooded.
That analogy paints a very clear picture.
It is not just industry experts who have spoken about these issues. The Australian Energy Market Operator itself says in its Integrated System Plan report, and I quote:
The projected portfolio of new resources involves substantial amounts of geographically dispersed renewable generation, placing a greater reliance on the role of the transmission network. A much larger network footprint with transmission investment will be needed to efficiently connect and share these low fuel cost resources.
We need the right infrastructure, and this government should have planned for it yesterday.
One of my other great concerns is not just lack of preparedness. I am also concerned that other states are receiving a competitive advantage because our government has been slow in this policy space. In January the federal Labor Party turned its back on this state. They turned their back because they know that this government has not put in place the strategic plans to transform our energy model.
In January, federal Labor announced a $1 billion commitment to make Gladstone in Queensland the hydrogen capital of Australia. There is no doubt in my mind that hydrogen is a particularly exciting fuel and an opportunity for our country. The federal Liberal Party recognises that opportunity too. Hydrogen is close to zero emissions, and with help it can be commercially viable. Other countries have recognised its potential and are getting on board. In its recent report, Gas Vision 2050, Energy Networks Australia has said, and I quote:
Exporting hydrogen from Australia … provides a significant economic opportunity. For example, Japan has developed a roadmap for hydrogen, and Japanese businesses are looking at Australian natural energy resources to supply that hydrogen.
Australia’s Chief Scientist, Dr Finkel, who is also chair of the Hydrogen Strategy Group, has said, and I quote:
Australian hydrogen exports could contribute $1.7 billion and provide 2800 jobs by 2030 … (with) many of the opportunities … concentrated in regional communities.
Yet despite the federal Labor leader hailing from Victoria, he turned his back on this state. Federal Labor’s decision giving preference to Queensland is wrong and shows that Bill Shorten is no friend of Victoria. I am yet to hear a whimper from this state Labor government on that announcement.
Only this week, BAE Economics released its report into the economic consequences of alternative Australian climate approaches. The report assesses the two major federal parties’ approaches to emission reduction, namely the coalition’s intention to meet its Paris agreement commitment of 26 to 28 per cent emissions reduction by 2030, and Labor’s target of 45 per cent emissions reduction over that same time frame. BAE’s report found that under a worst-case scenario, Labor’s policy approach could cost 336 000 jobs by 2030.
What the report should remind this Parliament is that transformative change must be planned and done responsibly. As a state, we must also be ready to put our best interests first. When it comes to renewable technology like hydrogen this state should be leading this country.
I call on this government to bring together the best minds in this state and put in place a roadmap that will see the transformation of our energy market become a reality.