2016-10-12
Mr BARBER (Northern Metropolitan) — I thank the members who have contributed on this motion for the perspectives that they have added to the debate. Mrs Peulich fell straight into the usual trap right from the beginning, and that is that she said that if we were to pay people for the electrons they produce off their solar systems, off their roofs, then we would be subsidising one group of houses; that is to say, people who do not have solar panels would be subsidising those people who have solar panels.
People who have solar panels are electricity generators. They generate electrons and they feed them into the grid, and this entire motion is about what they should be paid for that. Mrs Peulich probably gets her electricity from Hazelwood or some equally polluting power station somewhere, but I do not think she goes around saying that she subsidises Hazelwood power station by purchasing their electrons. We do not lie awake at night wondering whether people who happen to own shares in coal-fired power stations are being subsidised by those who do not have shares, because it is pretty clear if you are a generator and you feed into the grid you are going to get paid something for what you deliver. Hazelwood gets paid 5 or 6 cents, but by the time they have delivered it to Mrs Peulich's house they are getting paid 25 cents because of the added costs of delivery. That is exactly what this motion is calling for. It is saying: if you can generate electrons at the place where they are used, you should get paid the retail rate.
That just goes to show why conservatives will never be able to deal with the challenge of global warming, let alone the transformation that needs to be made in the Australian economy and let alone the necessary changes that are coming, ready or not, to the energy system. It is not just that they do not want to change the way things are done — that is the nature of conservatives. It is not just that their cup runneth over with donations from electricity companies, gas companies and oil companies. It is simply that they could not even get their heads around it. The brain is simply locked down from day one and incapable of seeing anything different from what used to happen in the good old days, which is when the State Electricity Commission took care of it and did not even ask the government of the day what they ought to be doing. These are not the sorts of questions that conservatives even want to face up to.
Mrs Peulich then alleged that most of the money would go to solar panel owners — we will leave people who own shares in coal-fired power stations out of it for a minute — and these people would be affluent people.
[Speech was interrupted.]
Mr BARBER — More affluent than those who cannot afford them. Well — through you, Acting President — they will be affluent in the sense that they will own their own homes. I do not know if the Liberal Party's definition of affluence these days is that you own your own home. Once upon a time it used to be seen as the very basic. Mrs Peulich is right: if you do not own your own home, if you are a renter — and many of the people I know will be renters for life — solar panels are not yet cheap enough that you can actually install them on your landlord's house and pack them up and take them when you leave.
[Speech was interrupted.]
Mr BARBER — Well, Mrs Peulich, that is exactly the point, and you probably should have done your research before you made your claim. They are ordinary home owners in fact. When you look at who owns solar panels and look at the suburbs where they live, they are typically low to middle income, and often they are retired people, because if you are retired and you have got a bit of a nest egg — you have got a few thousand dollars — you are actually much better off putting that money into solar panels and getting tax-free electrons than leaving a few thousand in a term deposit and paying tax on the interest. So it is not surprising that the big uptake of solar panels has in fact not been in affluent suburbs, but it has certainly been in suburbs where people own their own homes, which for some of my friends is the very definition of affluence — in fact it is the definition of paradise to own their own home.
For example, let us take Cranbourne. I know Mrs Peulich tries to give due care and attention to the suburb of Cranbourne. I do not know if she thinks it is affluent or not, but the area includes: Botanic Ridge, Cannons Creek, Cranbourne, Cranbourne East, Cranbourne North, Cranbourne South, Cranbourne West, Devon Meadows, Junction Village, Sandhurst and Skye — which got a mention this morning in Ms Springle's presentation. We are talking about that area, and it is basically postcode 3977. In that area 24.8 per cent of dwellings have solar panels. In fact the total installed capacity is 171 megawatts, which is getting up to the size of one of the eight units at Hazelwood. It is no surprise that Hazelwood is having trouble actually surviving in the energy market at the moment, because every time the sun shines on Cranbourne they are dumping their electricity into the grid, and as we know they are not getting paid very much for it. They are getting paid about 6 cents, although they are possibly getting paid that by the same electricity retailer — that is, the big three gentailers — that own the coal-fired power stations anyway, the big three retailers.
[Speech was interrupted.]
Mr BARBER — Well, the other 75 per cent of people in that suburb will not be very far behind them. Let us just say that we know there are about 80 000 homes and businesses that are going to see their tariffs cut from 25 cents to, possibly, 5 cents this year. I will bet that a fair bunch of them are in Cranbourne, and the Greens will certainly be making sure that everybody in Cranbourne knows that the Liberal Party voted against this motion today. Or we could go if we wanted to Rutherglen, we could go to Werribee or to Wyndham Vale. We could go to all of those areas.
[Speech was interrupted.]
Mr BARBER — There is a Greens vote there, but it is not as high as in some other areas. But they certainly like their solar panels, and it is pretty clear to those people that the Liberals have missed the boat.
Mrs Peulich also missed the point when she said that the feed-in tariff is not driving uptake. It is certainly true that in Victoria right now the rate of installations has levelled off and is going along fairly flat. It has obviously got something to do with the fact that her party and the Labor Party at the state and federal levels have done everything they can in the last few years to destroy the two main forms of incentives for renewable energy — that is, the federal energy renewable target, which Mr Shorten got together with Mr Abbott to cut from 41 000 gigawatt hours down to 33 000, and this feed-in tariff here in Victoria, which as you know was cut first by the Liberals when they were in office but in the last two years has been cut by the Labor Party.
Just moving on to Mr Leane's contribution, I thank him for his kind words. I will take it on face value when he says that the government has not yet responded to the Essential Services Commission's (ESC) recommendation and that therefore in some ways I am pre-empting his government's process that it is going through. I will just make a couple of points about that though. One is that the ESC's decision is made under the existing legislation. The existing legislation only permits the ESC to take into account two things: one is the wholesale price of electricity and the other is any avoidable network costs.
The problem is that the government has not changed that legislation since it has been in office, so it pretty much knows what answer it is going to get from the ESC. In fact in a recent review the ESC kind of hinted and said, 'Well, it's not our job to make policy, but if you change that area of legislation and ask us to consider environmental costs or benefits, then we might actually make a different recommendation'. The government has seen this happen twice now and it has not moved to actually amend the legislation, and therefore it already knows what the answer will be from the ESC.
The ESC got it pretty badly wrong on the wholesale price as well of course. Last year it predicted, looking forward, that there would be quite a low wholesale price for power. It has been a bit higher than it suggested, so in fact even those of us, and I include myself amongst them, who are getting the 5 cents have been getting ripped off all year because we have not been getting the wholesale price, which has gone up considerably due to a bit of volatility in the market, not least of which was the Basslink interconnector that actually stopped working for a while.
Mr Leane also mentioned the gross versus net issue that was raised in previous parliaments. That is really the very issue that we are going to here. If we were getting paid the same price for the power we use as the power that we export, we would all be very happy. That is why the gross feed-in tariff actually gives more certainty, gives more predictability and removes some of these distortions from the market — these perverse incentives that actually say, 'It's 4 o'clock in the afternoon and I'm about to start exporting from my house. I'm not going to get paid anything, so I might as well switch the air conditioner on'. That is not a behaviour we want to incentivise. We want to get some rational rules into this market.
Unfortunately the market really has not been reformed in any significant way since the government that Mrs Peulich was part of privatised it. They certainly should never have sold off the poles and wires. It is rapidly remonopolising, and basically the coal-fired and big gas-fired generators continue to work the market to their advantage and make it harder and harder for renewables to get in and connect.
Mr Leane noted that the Liberal Party went to the 2010 election with a commitment around feed-in tariffs, and he is absolutely right. The Liberal Party welshed on that in a microsecond. However, Labor never really went to the previous election with any renewable commitments of its own. The only commitment from Dan Andrews was that if we made him Premier, then he would tell us what his plan was for renewable energy, which I thought was a fairly gutsy approach to the voters. It was like, 'Elect me, and then I'll tell you what my policies are'. But he succeeded because there were not that many people around trying to call him on it.
The Greens took our own policy on a renewable energy target to the state election, and the then shadow minister, now Minister for Energy, Environment and Climate Change, spent most of the election bagging us about it. She said that we did not need a renewable energy target and if we did need one we did not want one, and even if we wanted one that was no way for us to get one because it was impossible with the federal law. We put up a number of options around that, and the Minister for Energy, Environment and Climate Change in her recent discussion paper has picked my favourite option. She basically came up with a gross feed-in tariff. You would be surprised!
It is quite simple what the government is proposing in relation to large renewable generators — that is, big wind farms and big solar farms. They will get paid the wholesale price of electricity plus a gross feed-in tariff on top of that, and they will be paid through an auction system, which of course is the system set up by the Green Labor government in the ACT and now adopted by the Andrews government.
That of course is the most transparent and most efficient method, providing the most certainty, you could devise, because it means basically up front when you build your large-scale solar generator or your large-scale wind generator you have got a pre-agreed contract from the government for the offtake. It is effectively a government-backed power purchasing agreement, and that gives you a lot of certainty and drives down your costs. The costs that wind and solar have been bidding into the ACT government auction have been quite amazing. The price of renewables is going down so quickly now, and new-build gas and coal will just never happen in Australia; it is way too risky.
So, yes, it is gratifying to see that the Labor Party, that went to the election with no policy on renewables, has adopted the Greens policy on renewables. It just grates a little bit the way the minister constantly harps about how the Greens do not really get it. It is this top-down arrogance that is embedded in the Andrews government. Not only is it the only one that can ever do anything but it is the only one that can ever think of anything — that is, nobody outside its world, with its little stakeholders and its bevies of advisers in the departments all sort of going 'Ning, ning, ning' in their ear, could ever do it — and therefore it is not surprising that both parties will be opposing this motion.
To access full speeches and debates please visit http://www.parliament.vic.gov.au/hansard where you can search Victorian Hansard publications from 1991 onwards.