Page 2608 - Week 07 - Thursday, 2 August 2018
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transport or holding on to wireless as copper wire telecommunications changed forever how we connected with each other.
Basing a policy on this premise also fails to grasp the challenge that is being faced. That challenge is how to manage the rapid transition occurring in our electricity sector to ensure affordable, reliable and secure energy generation at the least cost. As I have said the change is being driven by the market—by cost. Renewable energy costs are falling and so are the costs of storage and other products that enable greater and longer deployment of wind, solar and other renewables. Let us make the changes that facilitate this. Surely we have learnt that costs for new technologies fall more quickly than predicted. Change should help new technologies, not preserve outdated ancient ones.
New technologies also bring jobs and investment. The current national energy guarantee, the NEG, appears to do the opposite. According to the Climate Council, the NEG could see the nation forgo 20,000 jobs in the electricity sector. This prediction is based on modelling from Ernst and Young.
If the energy sector does not lead emissions reduction then the burden will fall on other sectors. Limiting renewable energy means that other sectors will have to do more. This is another key failing of the NEG. By capping emissions reductions in the energy sector, as the Turnbull government has proposed, the task of emissions reduction is disproportionately shifted to others, such as our farmers.
Madam Assistant Speaker, you do not have to take my word on this. The potential for the national energy guarantee to do this has been raised by a range of stakeholders. For example, the Agricultural Industries Energy Task Force, in relation to this, has said:
It is important that appropriate consideration be given to outcomes which do not unfairly shift the burden of reductions onto other sectors.
Another consequence of saying no to this motion is saying yes to higher power prices. Placing caps to limit renewable energy or creating barriers to its deployment means that our ageing fleet of electricity generators will not necessarily be replaced with the least-cost option. By not choosing the least-cost path, consumers lose out.
The design of the national energy market, the NEM, means that the cost of replacing these aged coal-fired power stations is ultimately passed on to households and businesses. Consumers may also lose out because the current NEG design could facilitate less competition in the market. The proposed reliability mechanism may make it difficult for new entrants to enter the electricity market because of the complexity of hedging against the obligations under the mechanism.
Price concerns have been raised by experts. Bruce Mountain, Director of the Victorian Energy Policy Centre, in relation to the NEG, has said:
That just makes no sense. If the objective of the policy will be met by the first year of the policy—quite why the policy brings the prices down is not clear.
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