Grid Reliability Fund and the Clean Energy Finance Corporation
16 Feb | '2021
I would say to those opposite, to the member for Kingsford Smith and to the Australian public that this government is taking action on climate change and continues to meet and beat our international targets as we move forward. Businesses and families on the Gold Coast expect our government to deliver results—practical outcomes that make their lives better. That is exactly what the Morrison government has done and continues to do—delivering record support for the economy through jobs so families can cope with this pandemic; ensuring we have a reliable supply of vaccines, which arrived yesterday and are being approved today, to protect Australians; and delivering new joint strike fighters for our sovereignty now and in the decades ahead.
We on the Gold Coast understand that our energy and emissions challenges also need practical outcomes. Our energy mix must be reliable and affordable and must reduce emissions. The good people of Moncrieff expect the government to deliver realistic energy policy and execute well for demonstrable positive outcomes. The Minister for Energy and Emissions Reduction is doing just that—delivering results, just as the government is doing across all portfolios.
Former prime ministers Paul Keating and John Howard both believed that, if you change the government, you change the country. Of course, whether a particular change of government was in the national interest is something they most certainly would have differed on. There is great wisdom in the warnings of our former prime ministers that the choices we make at the ballot box matter. After all, living in a well-functioning democracy like Australia, it’s easy to give in to the notion that there’s a certain inevitable momentum in our national direction—indeed, that our prosperity is inevitable.
The shock of the impact of the pandemic globally has reminded us all that there is no confident autopilot for government. Despite our highly competent and dedicated public servants, good political leadership matters. To paraphrase Menzies on the art and science of politics: expertise is insufficient in any area of government responsibility, just as confident but ill-informed leadership will also fall short. The pandemic has reminded us that both scientific expertise and artful political leadership are, indeed, vital. If the majority of Australians expect outcomes from the government that make their lives better, as we in Moncrieff certainly do, and if we accept that the parties of government change the trajectory of our nation and our lives, then Australians must choose the party of practical solutions. Otherwise, we are led down a very dark road paved by the good intentions of either scientists or politicians.
Mostly, Australians know that reliable, affordable energy has underwritten our national prosperity. Mostly, they also take climate change very seriously. Meeting our energy needs whilst addressing the emissions challenge of our time creates an imperative for practical solutions. One of the things that I like about the member for Hume is that he understands that his ministerial title, Minister for Energy and Emissions Reduction, encompasses both the essence of what Australians expect him to deliver and the combination of outcomes that Labor refuses to deliver and that the Greens are incapable of delivering—that is, to be for energy and for emissions reduction. Some Greens are so enamoured by the science of climate change that they forget about the science of human energy needs. Other Greens are so absorbed in left-wing politics that their virtue signalling ways are, at best, pointless and, at their worst, lacking in compassion for the very diverse circumstances of Australians. The zealotry of the Greens makes them incapable of delivering any practical solutions.
Labor is capable of delivering sensible reform and practical solutions. The case in point is those reforms of the Hawke-Keating government that were supported by John Howard in opposition. But it seems that, currently, Labor refuses to move to the sensible centre on energy and emissions, despite the best efforts of the member for Hunter. Of course, some in Labor have been infected by the same thinking as the Greens. Others just lack the political leadership to move past either the fear of losing preference that prop up many, many Labor members or the fear of losing inner city seats directly to the Greens. Labor refuses to contribute to the sensible policy in the centre that working Australians prefer because, as the member for Hunter has revealed, the Labor Party has abandoned its traditional base of workers in order to chase green ideology for political expediency.
By contrast, the Morrison government is listening to experts and leading with practical solutions that are pro energy for our economy and that lower emissions for our environment. The approach is very clear. We’re investing in technology to create the future that we seek—not trying to tax our way out of incumbent technologies of the past. Those incumbent technologies are, in fact, required for energy to manufacture the hardware for renewables. The government’s Technology Investment Roadmap will contribute enormously to Australia’s transformation to a low-emissions economy. Sadly, Labor’s high-taxing instincts, unimaginative policy doldrums and the political problems I described earlier mean that a big fat carbon tax on Australian families and businesses would be implemented if Labor were trusted to govern. We know from recent history that you can’t trust what Labor says about its carbon tax. So let’s talk about practical policy solutions and their delivery.
This amendment relates to the Clean Energy Finance Corporation, or the CEFC. For those not familiar with the CEFC, consider the CEFC’s own description of its role:
The CEFC has a unique role to increase investment in Australia’s transition to lower emissions. With the backing of the Australian Government, we invest to lead the market, operating with commercial rigour to address some of Australia’s toughest emissions challenges – in agriculture, energy generation and storage, infrastructure, property, transport and waste. We’re also proud to back Australia’s cleantech entrepreneurs through the Clean Energy Innovation Fund, and invest in the development of Australia’s hydrogen potential through the Advancing Hydrogen Fund.
That description makes obvious the connection between the CEFC and the government’s Technology Investment Roadmap. I will delve into this point further. It is important not only for understanding this bill but because those opposite face a choice between virtue-signalling rhetoric and substantive action.
This bill supports the government’s long-term emissions reduction strategy by contributing to the achievement of the objectives of the Technology Investment Roadmap. The road map is about driving down the cost of energy, not the Labor-Greens approach of raising energy prices to drive industries and jobs out of existence. It’s pro energy, pro emissions reduction and pro jobs. Investment is a key action to drive the achievement of the road map objectives. Ideologues and the naive will back a narrow range of technologies, but more balance is required to lower emissions whilst creating jobs and driving investment.
The CEFC will be pivotal in leveraging private sector investment in priority technologies identified in the road map and the forthcoming low emissions technology statements. The Morrison government is investing in technology to maintain Australia’s energy security as we achieve our emissions-reduction targets. That is what the good people of Moncrieff rightly expect. They don’t want extra taxes on their businesses and families, and they certainly can’t afford it right now. The members opposite, therefore, face a very real test. If they really support jobs for Australian workers then they should support this bill. If they really support lower emissions then they should support this bill. If they support a more reliable and secure energy market then they should support this bill. If they support lower energy prices for Australian families then they should support this bill. The Minister for Energy and Emissions Reduction is delivering what the nation needs and what Moncrieff needs. I urge all members to focus on the needs of their constituents, uncontaminated by green ideology. Hopefully, they will then decide that, like me, they are for energy, for emissions reductions and for this bill.
To reassure Australians and those in my electorate, allow me to outline more about this pro-energy, pro-emissions-reduction and pro-jobs bill. The Clean Energy Finance Corporation Amendment (Grid Reliability Fund) Bill 2020 will deliver on these key points. It will support more renewable energy by improving our electricity network via the $1 billion Grid Reliability Fund, the GRF. It will improve reliability. It’s not enough to just talk about solar panels and wind farms. You have to make the electricity grid reliable and ready for the significant increase in the level of renewables we are already progressing to. The hair dryer has to turn on. The electric toothbrush has to work. Our world-leading deployment of renewable energy sources in Australia needs to be integrated and backed up.
I would like to ask why the opposition leader still prefers policy influence from the member for Melbourne rather than the member for Hunter. It’s no mystery why Queenslanders don’t want federal Labor in power. If this bill is passed, real climate change action will be powered through the GRF. The CEFC has identified a pipeline of seven projects that could be supported through the GRF. Given the CEFC model, the value of the project pipeline is estimated at up to $4.5 billion and would create at least 1,075 jobs, mainly in construction. One thousand and seventy-five jobs! That’s significant. The GRF will support private investment in storage and transmission infrastructure as well as new reliable energy generation, including gas and pumped hydro.
In Moncrieff, business leaders tell me that affordable, reliable power will be critical to our recovery from the pandemic, to grow the economy and create new jobs. Manufacturing on the Gold Coast is worth about $7 billion and 14,000 direct jobs. Those manufacturers need to keep the lights on and the machinery going. Whether you’re powering those manufacturers, theme parks, event venues or hotels, energy costs matter to the bottom line for business and to their ability to employ Gold Coasters. Australia has a tendency to rapidly adopt new technologies. We’re a world leader, in fact. We’re a country full of early adopters. GRF investment can accelerate new technologies to reach the point where they become economically competitive, as households and businesses rapidly adopt them.
That fast adoption trend and its benefits are observable, right now, in the adoption of renewables. On an energy-only basis, costs have fallen rapidly and we have seen $30 billion invested in renewable energy since 2017. Australia is now deploying new wind and solar 10 times faster per person than the global average and four times faster per person than Europe, China, Japan or the US. Just like we were the quickest adopters of video, CD and now streaming technologies, we are too of renewables. About two million, or nearly one in four, Australian households now have solar panels. It wasn’t that long ago that it was only 20 per cent. Now it’s 25 per cent.
In 2019, the share of wind and solar in Australia’s electricity grids was more than double the global average and projected to rise rapidly in coming years. But there’s no autopilot for the situation. If you believe in free-market principles, as I do and those on this side of the chamber do, you recognise that there could be market failures. The pollution that leads to climate change is a market failure. Proponents of an emissions trading scheme, an ETS, will sometimes claim that a commitment to free market principles requires you to support a market mechanism like an ETS. In other policy areas, like defence, health and education, governments often do and should reach for a range of options to address market failures. Energy and emissions reduction policies should be selected for their efficacy.
Currently, there’s no shortage of investment in clean energy, but the government has identified a lack of investment in the dispatchable generation needed to support the increase of intermittent generation. To balance and integrate high shares of renewable energy, we need more flexible backup generation and storage, gas, pumped hydro and batteries. Again, the importance of technology investment becomes crystal clear. Driving down the cost of new technologies won’t raise the cost of incumbent technologies, like coal and gas, that continue to play an important role in our energy mix. Raising the cost of incumbent technologies through an ETS or Labor’s carbon tax could be disastrous.
Practical solutions of the Morrison government won’t risk our recovery from the pandemic. We will not risk our recovery from the pandemic! We must have affordability and reliability. The GRF will complement the government’s Technology Investment Roadmap to ensure affordable, reliable energy for Moncrieff, the Gold Coast and all Australians, reducing emissions at the same time. GRF eligible investments will include energy storage projects, including pumped hydro and batteries, transmission and distribution infrastructure, grid-stabilising technologies and eligible projects identified in the government’s Underwriting New Generation Investments, UNGI, program.
To understand the GRF, it helps to put it in the context of projects that it could support. Some examples in Queensland are new transition projects, like CopperString 2.0, dispatchable generation, like— (Time expired)