It's a pleasure to follow the member for Barker and reflect on his contribution and his generous farewell to the member for Hindmarsh's portfolio. I'll just concentrate on a point that is well known: the member for Barker told his preselectors in 2013 he'd be a minister within a year. So far I think he's still on the back bench. So for him—
The DEPUTY SPEAKER (Mr Vasta): I ask the member for Shortland to come back to the bill.
Mr CONROY: I will. I note you didn't ask that of the member for Barker when he talked about the member for Hindmarsh, but I'll move to the substance of the bill.
The substance of the bill is the coalition yet again trying to make the Clean Energy Finance Corporation a political tool for their political effort and their ideological wars. Let's reflect: for the first three years of the government their official policy was to abolish the Clean Energy Finance Corporation. Through their first Prime Minister and a half, their goal was to abolish the Clean Energy Finance Corporation. So the hide of the coalition government now to claim credit for the achievements of the CEFC and claim they are improving it through this bill is remarkable. It shows the utter hypocrisy of the government. They've lost that battle because they've realised they don't have the political support in the parliament or, quite frankly, the public support to abolish a very important national institution. They are now trying to play wedge politics with it. They're trying to play wedge politics with the CEFC through many of the amendments that this bill seeks to make.
I'll first touch on the amendments that we support and the endeavours that are worthy in this bill. We support expanding the ability of the CEFC to invest in storage. We support the increase in the ability of the CEFC to invest in transmission. Both of those initiatives are worthy and necessary as we modernise the grid, a grid that so far is stuck in the 20th century. We support them because they're our policy. I know the Leader of the Opposition in his remarks talked about our visionary $20 billion Rewiring the Nation initiative announced in the budget response last year, an initiative that will modernise the grid, increase reliability and allow further investment in low-emissions technology in this country. It will also lower power prices and increase demand for Australian exports like steel and it will mandate the use of Australian workers. So it's a worthy initiative that is really important.
However, the element of this amendment legislation that we can't support is the opening up of the CEFC to investment in gas-fired generation. Firstly, the minister is wrong. The minister is being misleading when he claims that the current mandate for the CEFC allows investment in gas. My response is twofold. If it allows investment in gas, why did he put out media releases saying this amendment will allow for investment in gas? So the minister has contradicted himself, firstly. Secondly, the facts are these. The investment mandate of the CEFC says it can only support investment in new generation that is at an emissions intensity of no more than 50 per cent of the grid. The emissions intensity of the National Electricity Market at the moment is 0.72—that is, for every megawatt of power, 720 kilograms of carbon dioxide equivalent are produced. The emissions intensity of combined cycle gas is about 0.4—so 400 kilos of CO2 per megawatt hours—and for open cycle at best it's 600 kilos of CO2. So clearly for anyone who has any mathematical ability, which doesn't include the minister for energy, half of 0.72 is 0.36.
So no conventional gas technology is eligible for investment under the CEFC right now.
This amendment that they're proposing, which would have the effect of removing that 50 per cent mandate and saying that the CEFC can invest in new generation that underpins grid reliability and low emissions, is clearly opening up the Clean Energy Finance Corporation to support gas-fired power. I'll talk about the role of gas in a minute; it does have an important role. But the implications of this amendment are that, for example, the minister could direct the CEFC to invest in a new gas-fired power station that has the emissions intensity of, say, the Hallett Power Station in South Australia, which has an emissions intensity of 1.17, meaning that it emits 1,200 kilograms of carbon dioxide per megawatt hour, or the Dry Creek gas turbine station in South Australia, which emits 1,342 kilograms of CO2 per megawatt hour. I should note that the emissions intensity of the Dry Creek gas turbine station is actually greater than that of the most emissions-intensive brown coal power station in this country, which is Yallourn Power Station. Let me repeat that. If this amendment by the government to open up gas in the way they've configured it is successful, we could have the Clean Energy Finance Corporation, whose goal is to support the deployment of new clean energy technologies, supporting a gas-fired power station that emits more carbon dioxide per megawatt hour than Yallourn Power Station. Is that really the point of the Clean Energy Finance Corporation? Is that really what we should be aspiring to?
The truth is that this bill is all about wedge politics by the government. They've failed on their wedge politics about coal, and I'll return to that in anticipation of the contribution of the member for New England, who will speak after me. They've moved on from coal because they've got huge divisions in their party room between the dinosaurs in the National Party and people like the member for Hughes versus the so-called modern Liberals or moderate Liberals. I forget what they're called. I think the member for Brisbane might be associated with them in a loose way. They've got huge divisions there, and they know that they're on a loser because the vast majority of Australian people support investment in clean energy. So they've moved from wedge politics on coal to wedge politics on gas.
Gas has a huge role in the current NEM. Gas plays a vital role in firming the grid. I'm proud that, in my electorate, I've got Colongra Power Station, the largest gas-fired power station in New South Wales. It plays a vital role as a peaker. It plays a vital role in firming the grid when it's under stress because some of our ageing coal fired power stations have gone out due to heat or other mechanical breakdowns or when renewable energy is intermittent. But, last year, Colongra Power Station operated for 54 hours all year. It was a critical 54 hours. It was an essential 54 hours, but it operated for 54 hours. And gas generation in the NEM last year constituted seven per cent of total NEM output, so it plays a vital role in firming, and it will play that role for the foreseeable future, complemented by other firming technologies, whether that's pumped hydro—Snowy Hydro 2.0 or the other forms—or batteries which are coming in and becoming more competitive. And ignore all this rubbish that says the Hornsdale battery can only power Tomago Power Station for 12 minutes. Batteries are getting larger, and they're complementing pumped hydro for short-term firming, and they're coming down in price significantly. For example, the Australian Energy Market Operator has said that, in the near future, for gas-fired peakers to be competitive with batteries, we would need a gas price in this country of $4 a gigajoule. It's at $10 a gigajoule at the moment, and I'm not seeing anyone suggesting we'll get back to $4. So gas can't compete with batteries for firming. Batteries are increasing in capacity, so they will be able to run longer to plug the gaps, supported by pumped hydro.
So this comes back to the Prime Minister's ultimate wedge politics. He went up to Kurri in my neck of the woods and announced that the government would support a 1,000 megawatt gas-fired power station. This was, I think, energy policy No. 24 or 25 of this government—and that's 24 or 25 over seven years—but things changed very quickly. We got the next energy policy within, I think, two days. It then became clear that it wasn't going to be a 1,000 megawatt gas-fired power station; it was going to be a 200 megawatt gas-fired power station.
Meanwhile, all of these interventions were actually turning off private sector investors who were actually making investment plans. AGL has a plan for a new gas-fired power station at Tomago which they obviously put on hold when they saw the 25th energy policy announcement by the Prime Minister. This is just wedge politics that is actually destabilising energy policy in this country, because what we need is a plan. We need a plan because renewable energy is coming more and more into the grid; we need a plan around transmission; we need a plan around storage and we need a plan around generation, not just ad hoc announcements by a government addicted to wedge politics.
That brings me to the master of wedge politics in this place, the member for New England, and his new announcement. The thing I love about the member for New England is: as often as he loves to wedge Labor, he likes to wedge his own side; he's an equal opportunity wedger. I'm very confident that he's going to give me a free character assessment after my contribution, and that's fine, but I'll just say this. I'm grounded in reality. I face my electors every day and I talk to them about what's true. I don't live in an alternative reality—'Joyceland' or whatever it's called—which is a return to the 1950s and which is not grounded in economics at all.
Let's refer to the member for New England's amendment to allow so-called 'high-efficiency low-emissions coal-fired power' into the grid. The problem with his amendment—and there are multiple problems—is that it's just completely impractical. It argues that we should support HELE in this country if it has an emissions intensity of 80 per cent or lower of NEM intensity. The problem with that is that the least emissions-intensive HELE plant in the world runs at 670 kilograms of CO2 per megawatt hour. To hit his 80 per cent goal, he would need to find a HELE plant at 576 kilograms of CO2 per megawatt hour. His amendment is already contradicted by the physical reality of the NEM. We might talk about carbon capture and storage accompanying the HELE, and that's the way of the future, but the truth is: this government cut funding for CCS. This government abolished the CCS flagship fund that Labor put in place that was there to develop the technology of CCS which is still a long way off and is still not economical. So for this party or the coalition to talk about CCS as the future when they abolished a CCS flagship is utter hypocrisy.
The truth is: they'll talk about power prices and the need to lower power prices—and we do need to do that in this country because this government has presided over record power price increases—but what they're arguing for is a recipe for higher power prices. The market has spoken and the truth is: the cheapest form of new power in this country is renewable energy—wind and solar made completely reliable, 100 per cent reliable, through a combination of pumped hydro and batteries. The price of that combination, which firms up renewable energy, is around $75 a megawatt hour—completely reliable at $75 a megawatt hour. New coal at best will cost $120 to $150 a megawatt hour. New coal with CCS, if it actually exists, is north of $300 a megawatt hour. If the member for New England's bizarre fifties utopia were ever to be adopted in this country, he would be responsible for doubling power prices—not reducing but doubling power prices.
In my last two minutes I'm going to reflect on my view about coal, because I'm guessing it's going to get touched on very shortly. I'm proud to represent a coalmining region. I'm proud to represent a region that was built on the wealth of coal—the coal that industrialised this country, the coal that's still being dug up by miners who fight every day against companies intent on slashing their wages. They're miners who need reform to labour hire to give them decent wages—something the member for New England goes missing about. When it's talking about the beauty of coal, he's there; when it's talking about improving the wages of coalminers, he's nowhere to be seen. I've never heard him talk about the return of black lung to the industry—no, of course not, because he doesn't care about workers; he cares about headlines and being mates with Yancoal and Whitehaven.
The truth is: coal-fired power generation in this country has lost the economic race. It's not about the environment; it has lost the economic race. We should keep exporting it while there's demand. My strong view is that the last tonne of coal consumed in this world should be Australian coal, and we should continue to export it as long as there's global demand for it.
I'm proud of the industry. I'm proud of the contribution miners make every day in my area. My neighbour's a coalminer. My kids go to school with coalminers' kids. I go to the footy with coalminers. I'm proud of their contribution. I want the last tonne of coal mined on this planet to be Australian coal. And while that’s being mined, I will defend the industrial rights of workers. I will argue for equal wages for equal work. I will argue for better health and safety to make sure that we abolish black lung. But I won't argue for higher power prices in this country, which is what the member for New England and the government are arguing for, through their ideological obsession with coal-fired generation and gas-fired generation. I stand with coalminers. I stand with the export industry. I stand for a strong future for them. But I also stand with my consumers, my households, who want lower power prices and cleaning up of the grid.
I will stand by to enjoy the normal incoherence from the member for New England, but I can guarantee you it won't be grounded in economic reality.