Powering Our Future: inquiry into modernising Australia's energy grid

February 05, 2018


I want to start by thanking the Secretariat for the brilliant job they've done in putting this report together and by complimenting the Chair of the Committee, the Member for Mallee, and all the Members on what is a very strong report. In the energy policy arena, which is probably the most heated part of the national policy debate, a consensus was achieved across four parties.

It's a rare issue that gets the Member for Mallee, the Member for Hughes, the Member for Melbourne and myself to agree on anything, and this report recognises that and represents that. I think it signifies a way forward on the energy debate in this country.

There are a stack of recommendations, 23, and I won't go through all of them, but I want to highlight quickly seven really important recommendations, starting with the first one, about the drastic need, the desperate need, to resolve the uncertainty in energy policy that has bedevilled this country since 2009.

The report makes reference to calculations by the Energy Council, the peak body for generators, which says that the effect of the inability of this place—the House of Representatives and the Senate—to agree on a settled energy policy since 2009 is the equivalent of a $50 a tonne carbon price. That is because people in this place cannot agree on a policy that people can invest in for the next 40 years. It is essential that we resolve that uncertainty in energy policy and get an enduring mechanism to tackle our greenhouse gas abatement requirements.

Recommendation 4 talks about speeding up rule-making. Recommendation 5 talks about greater parliamentary oversight of the Finkel recommendations. There are recommendations around industry demand and responses around energy efficiency which will be essential to reduce demand in the sector, while providing a revenue stream for our manufacturers.

There are recommendations around AEMO studies into more interconnectors, which the member for Mallee has referred to. There is a strong recommendation around reviewing the RIT-T test, which is very short-sighted in its regulatory oversight for new investment in transmission infrastructure.

The recommendation I'm particularly passionate about, besides the uncertainty recommendation, is recommendation 16, which is that AEMO consider establishing Renewable Energy Zones. This is essential if we have to decarbonise our grid. We need serious investment in renewable energy zones to take advantage of the greatest solar radiation in the world and great wind resources, but to do that we need adequate planning and adequate investment in the grid, and AEMO has a lead role in this. These are really important recommendations.

There is some really important commentary around system security. Our review found that renewable energy can provide all the security services that the grid needs around frequency control, ancillary services and inertia responses if there is adequate planning and investment.
It is not that these sources of generation can't provide these services; it's that they've never been called upon to do that. With adequate planning and a good regulatory framework, they can provide them.

The final thing in this report which is really important is the commentary around geographic diversity. We are an energy island, and some people say that, because we are an energy island, we can't invest in renewable energy because we don't have nuclear from France to draw upon or hydro from Canada to draw upon—as you can if you're in New York.

But our geographic diversity and the sheer size of the land mass in this country means that that diversity provides reliability, north and south and east and west. If we invest in renewable energy with good planning, we can have solar going in Western Queensland backed up by wind and wave power in Tasmania and great support in South Australia.

These are things that can be provided—they occur in other countries—if we do the planning right.

I want to thank the Speaker personally for approving overseas travel for this committee. Often this travel is portrayed as a junket, but I, as one of the four members of the committee who had the privilege of going to Germany and the United States, learned so, so much about the energy infrastructure and approach in those countries, and it informed this Committee report. I can absolutely assure you that this report would not be as strong, credible and well researched as it is now if we hadn't had that trip, so thank you very much, Speaker.

I commend this report to the House, and I would recommend that everyone who is interested in energy policy have a read of it with an open mind, because it does chart a way forward.