2016-05-03
Mr BARBER (Northern Metropolitan) — The last speaker invited us to think about the big picture, but let us start with the very small picture here of the bill that is in front of us. It is 18 months since I brought this problem into the house: the problem of rapacious poles and wires energy companies driving solar customers crazy with long time lines and arcane paperwork. It is 18 months since I first brought to the attention of the house 22 cases of solar panel owners who were trying to get connected to the grid, who had either been delayed or been downsized by their local power provider.
We get a bill, and the bill actually simply empowers other regulators, the Australian Energy Regulator and in some cases the Australian Energy Market Operator to go off and do something about the problem. So hopefully they have got their skates on and they are now ready to go and write some rules that will address the kinds of problems we have been having. In those 18 months not only have these issues arisen, and now been dealt with by the Parliament, but in fact some even bigger questions in relation to our energy network have become more obvious.
Solar generation continues to get cheaper and cheaper and cheaper by a factor of 100 since 1975 and both the sceptics and the optimists have had their predictions smashed when it comes to the continually falling price of solar panels. Just as I walked in here today I saw that in a recent auction to provide energy in some of the Gulf States the winning bid went to a proposed solar farm that was going to deliver electricity — in admittedly quite a sunny climate — for 3 cents a kilowatt hour. That was the winning bid. That is because the price of panels and all of the associated learning with installing them, with fitting them into the grid, continues to astound us.
This kind of minor tinkering, this sort of belated cleaning up of some of the rules that allowed monopolies to be monopolies, is not in any way going to address that incredible technological challenge that has been thrown up by the falling price of renewables. I have no intention of even trying to talk tonight about the challenge that climate change is putting forward, but let us just for a moment address the technological challenge of the constantly falling price of solar panels and of being connected to a grid where the price of making electrons on your own roof is now cheaper than the cost of delivering those electrons from remote power sources, such as coal-fired power stations in the Latrobe Valley and so forth.
It is no longer a question of the cost of solar generation competing with the cost of coal-fired generation: we can make our own electricity on our roofs cheaper than they can deliver it to our house. At that point of logical crossover it is game over for the grid. All these proposals, all these different rule changes that are going through at the federal level through the national electricity market, look like reforms. They look like attempts to respond, but all they are doing is locking in the existing model. In fact what they all are are attempts to prop up and defend the existing order of things, when it should be pretty obvious that is all about to change, and change dramatically, so far as electricity supply goes.
We have got a bigger question to address, and that is the question of our transport system. At the moment it is all based on fossil fuels and for the most part liquid fuels. Liquid fuel is a very good way to get a lot of energy packed into a small place and carry it with you when you want to go from A to B, but batteries are getting better at that all the time, and as I have noted, electricity is getting cheaper all the time. It will not be long before Australia follows in the footsteps of a range of other countries, particularly those in Europe, that are looking at in fact electrifying their transport systems; there are buses that can run for many hours on batteries that they themselves carry. Of course we have always had trams here in Melbourne, but with the right incentives we are seeing both electric cars and electric buses and we are seeing the broader electrification of city transport making great strides.
That in itself is going to change the way the electricity grid operates, and I do not believe that any regulatory body has the faintest clue as to how to deal with it. In fact the Australian Energy Market Operator recently did a study and concluded that it really was not going to change much at all between now and 2030. Well — surprise, surprise! — its key assumption was an extraordinarily low take-up of electric vehicles, and so it kicked the can down the road and chose to ignore the problem for a bit longer.
It is hard to see a model under which the existing grid operators and big dumb and centralised power generators will survive in any recognisable format, and yet you do not see any evidence of awareness of that in this legislation. You do not see any awareness of that in the state budget that was just delivered. There is something in there called the Latrobe Valley transition program that has some money in it, but no-one from the government has stepped forward to actually describe what the transition will be. In the four years Labor was in opposition it just pretended there was not going to be any transition. The great thing about the creation of the Latrobe Valley transition program is that this government now has to admit that there will be a transition, and we can enter into a debate about what that transition will be — from what to what, where we are headed, how fast and all the rest of it. I look forward to having that discussion over the coming months with the government as we deal with its budget papers and other revenue measures.
As Mr Drum noted, there is a coal tax. For Mr Drum's interest, that is going to wash through at around about $2 per megawatt hour, which is also about a $2 per tonne carbon tax if you want to look at it that way. The Premier was quick to assure us that it would make no difference to electricity prices. And he is right, because there is such an enormous surplus of generation capacity at the moment across the whole south-east Australian grid, with more and more solar coming in all the time — every day, as Mr Drum pointed out — that it is in fact impossible for a small group of power stations to just up and decide that they are going to increase their prices. They are competing in a market where there is already a massive oversupply, so good luck jacking up their prices to try to recover a tax in that environment. But it will cut into the profits of those power stations, and that brings closer the day when they will close because they have just had $2 a megawatt hour taken out of their profits.
I see that other people are trying to have it both ways. They said the tax would be passed on and it would also threaten the generators, but it is my belief that it will simply take away the profits of those generators. The Latrobe Valley generators are subject to the tax, and that has been driven by these exact same factors that I have been discussing while talking about this bill.
The Greens will support the bill for what it is worth. It simply empowers the Australian Energy Regulator and other bodies to go off and do what I have been asking governments to do for the last 18 months now, and that is to regulate these greedy perpetual private monopolies that control all the connections. No matter what they do, no matter what barriers they throw up or which new models they try to put forward, at the end of the day if it is cheaper to make your own electrons than have them delivered, it is all over for the existing model of a poles and wires electricity company.
This particular challenge was thrown up a couple of years ago and brought into Parliament by the Greens in those many case studies that I had, notably from country Victoria I have to say. While that immediate challenge has been dealt with for now by this piece of legislation, the fact is that there will be another challenge and another challenge and another challenge around the corner, and this kind of minor-level tinkering simply is not going to get us there.
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