STATUTES AMENDMENT (ENERGY EFFICIENCY SHORTFALLS) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 5 March 2009. Page 1926.)

Mr WILLIAMS (MacKillop) (11:01): I indicate that I am the lead speaker for the opposition. I also indicate to the house that the opposition will be supporting this particular measure but wants to make a number of points about the measure and question how clever the government is being. I will come to that shortly.

First of all, I will speak to the bill as the opposition sees it. On 1 January this year, the government's Residential Energy Efficiency Scheme commenced. The scheme did not require any legislative changes for that commencement; the necessary legal instruments were all created through regulation.

The REES scheme is aimed at assisting South Australians, particularly those on low incomes, to reduce their energy bills, cutting greenhouse gas emissions and preparing households for the energy price increases that will result from emissions trading beginning in 2010 under the commonwealth's Carbon Pollution Reduction Scheme.

REES is now a licence condition for all retailers of electricity and gas in South Australia. The framework for the REES has been regulated under both the Electricity Act 1996 and the Gas Act 1997. Under REES, retailers are obliged to meet three targets as part of their licence conditions.

They must achieve a certain amount of greenhouse gas savings (measured in tonnes of carbon dioxide equivalent) by incentives or special offers to households of one or more of the following: the installation of energy-saving light globes; the installation of low-flow shower heads; persuading householders to retire second refrigerators or freezers; the installation of energy-efficient hot water systems (solar, heat pump or gas); the installation of ceiling insulation; draught-proofing or the installation of energy-efficient heating and cooling systems.

Another target stipulates that they need to achieve a certain portion of these savings in priority households: that is, households where residents hold concession cards such as veterans' cards, pensioner concession cards or health care cards, or households where the South Australian energy concession has been granted, having been approved for the energy hardship program. The third target that must be met under the scheme is that retailers must also conduct a certain number of energy audits in priority households.

The scheme targets are set by the Minister for Energy, and the program is administered by ESCOSA. The scheme expires in 2014, and targets will be reviewed every three years. The government envisages that, over the next six years, approximately 2,000 households will be targeted by retailers and supposedly benefit from the scheme.

Retailers under the scheme are free to offer audits and incentives both to householders who are their customers and to those who are not. The bill amends the Electricity Act 1996 and the Gas Act 1997 to set up a penalty regime to underpin the REES scheme to ensure that retailers are obliged to meet their commitments. A retailer is obliged to participate in the scheme if they have over 5,000 residential customers under their licences per year. If a retailer has more than one licence (as in the case, for example, of AGL, which holds both electricity and gas licences), they will be obliged to meet targets for those licences.

At this time, retailers who are obliged include AGL, Simply Energy, Origin, TRUenergy, Powerdirect, Red Energy and SA Electricity. It is likely that this list will change each year as small retailers take on or lose customers and fail to meet the 5,000 residential customer threshold. Retailers will face penalties if they do not meet more than 90 per cent of one or more of their targets under the scheme.

If ESCOSA issues a retailer with a noncompliance notice, the retailer can choose either to pay a monetary penalty, which is variable and based on the shortfall amount, or opt to be prosecuted for breach of licence and risk a criminal conviction and a fine of up to $1 million. Should the retailer opt for the monetary penalty, they will be fined a flat rate of $100,000 plus a dollar value for each tonne of carbon dioxide equivalent not saved and each energy audit not undertaken.

The dollar value for penalties will be set above what it would have cost to comply. The actual dollar amounts will be set by regulation following the passing of the bill. All penalties will be paid into the Consolidated Account. If a retailer does not meet their obligation and ignores the notice issued by ESCOSA, or refuses to make a penalty choice, ESCOSA can enforce the monetary penalty as debt or prosecute the retailer for breach of licence. ESCOSA can commence prosecution for breach of licence at any time but, if this course of action is taken, ESCOSA cannot also recover the monetary penalty.

Retailers who do not meet their audit targets will have their shortfall rolled into the next year to prevent companies from just paying a penalty each year, rather than conducting audits. If they do not meet their greenhouse savings targets, they can pay the fine and have the debt wiped. If retailers exceed their targets, the excess is banked and can be credited to the next year's targets. These credits can also be sold between retailers.

I have approached several retailers to ascertain their position on the bill, but I have yet to receive any reply from them. It is interesting to note that, when contacted by the media about a week ago, at least one electricity retailer on the list I read did not seem to have any idea whatsoever about the REES scheme or their targets.

As I said, the opposition will support the bill but, in doing so, we wish to make a number of points, not the least of which (and I am sure one of my colleagues will point this out) is that one of the targets with respect to hot water services is a nonsense in certain parts of the state; however, I will not steal the member's thunder, as I am sure she will put on the record herself the situation in her electorate.

We have a number of concerns. I did, in fact, draft an amendment to the bill, but there is some debate about whether or not this will be classed as a money bill, so I have chosen not to put it on file. However, I suggest to the minister that, if any fines are imposed through this scheme, the government should place any such fines into a fund to support the renewable sector instead of putting them into the Consolidated Account, as the bill proposes They might go into a fund to support and subsidise the installation of photovoltaic cells in domestic circumstances. That is the thrust of what I would do if I was the minister imposing this particular scheme.

I draw the attention of the house to the front page story in The Age of yesterday. The crux of the story—and I will quote parts from it—is that a high-level ministerial brief has been leaked to The Age. The article states:

The leaked brief reignites debate over the environmental benefits of billions of dollars in green outlays by households and government, from an individual choosing to spend more for an energy-efficient refrigerator, through to Mr Rudd's $3.9 billion for insulating homes as part of his economic stimulus package.

It states further:

The confidential ministerial brief advises the state government that it should now only bother with green measures if they are more cost effective than alternatives.

It goes on to say:

In practice, Labor's plan to reduce Australia's carbon pollution by between 5 and 15 per cent by 2020 means that any voluntary efforts to cut emissions will only reduce the price of permits to pollute, not actually achieve additional cuts [to greenhouse gases].

It is interesting that this minister has introduced this re-scheme. I think I am right in saying that the minister is on the record in this place during estimates saying that the answer to this is not necessarily having a whole host of small schemes all trying to achieve the end. At this time, when the Howard government was in power in Canberra, the minister said, 'What we need is a comprehensive emissions trading scheme.' I think at the time he said that that should be a cap-and-trade type scheme. It appears that the minister was thinking along the same lines as the advice that has been given to the Victorian government. The Age article continues:

The harder households work, the harder the Melbourne or Sydney city councils work, or the harder the state governments work to cut emissions, the less the big polluters have to work.

We are heading towards a national comprehensive carbon pollution reduction scheme, and it will cost us a significant amount of money. Apparently, the brief to the Victorian government says that, if other smaller schemes are achieving reductions in carbon pollution, the net effect will be that the targets set by the commonwealth will not be changed—they will be the same—and some of the reduction that needs to be made to meet those targets will happen through these small voluntary schemes managed by the states, and the major polluters across the nation will actually have reduced targets.

The Hon. P.F. Conlon: Industry.

Mr WILLIAMS: Industry will have—

The Hon. P.F. Conlon interjecting:

Mr WILLIAMS: No.

The Hon. P.F. Conlon: Well, who are you talking about?

Mr WILLIAMS: The reality is that industry will be set targets by your federal colleagues, and your scheme is going to transfer the burden to meet those targets from industry to households. That is what is happening, minister. That is what the Victorian government has been advised, apparently. I would suggest that it is very similar to the advice that the minister himself gave this house several years ago. Of course, at that time John Howard was in power and the minister was keen to make a different point. The reality is that it appears that the Victorian government had been advised that a plethora of small schemes will not reduce the total amount of carbon because that will be capped under the commonwealth scheme and that cap will not be reduced or changed for industry because individuals and householders have done their part. The reality is that industry will be let off the targets it would otherwise have had to meet.

That is part of the problem that the opposition has been talking about for some time with a range of schemes. Interestingly, we can get more of a feel for the government's position on this—and I have made this comment with regard to this government on a number of occasions—as the importance of this scheme to this government is the fact that it gets it a headline in the media.

I notice the government has been keen to ensure that everybody knows that this is the first scheme and that it is at the cutting edge of these sort of schemes and out the front of the pack in an attempt to give the image that the government is doing something new and that it is doing something at the cutting edge, is in front of everybody else and is leading the world in this area, but in reality the net impact of this scheme, as far as emissions trading is concerned, is zip. It will be zip. I think the government understands this and that is why it has only put a three or four year life on this as it will expire in 2014. The government knows that it will not have any real impact on the total amount of carbon pollution across the nation, particularly in South Australia.

With those few remarks I again implore the minister that, if he is to impose fines on electricity retailers, he might reconsider where that money goes: whether it ends up in the Consolidated Account or goes back into the renewable sector to try to support some of the efforts there. Having said that, I indicate that the opposition supports the bill. We question how much net benefit we will get, other than a headline.

Mr PEDERICK (Hammond) (11:18): I, too, support the bill. I looked at the dot points on what will become part of the residential energy efficiency scheme, and they include: the installation of energy saving light globes; the installation of low flow shower heads; persuading householders to retire their second refrigerator and freezers; the installation of energy efficient hot water systems; the installation of ceiling insulation; draught proofing; or, the installation of energy efficient heating and cooling systems.

These are all fine points for anyone to take on board, especially as we move towards the unknown of where electricity and energy prices will get to under any scheme, whether under this scheme or the federal government's carbon pollution reduction scheme. There will be a definite cost to the population and market forces will work out what people can afford to do. Some of this is a little unrealistic. People in regional areas may run a couple of freezers for a big family, or a couple of fridges—

Mr Venning: Keep a bullock in it.

Mr PEDERICK: Yes, as the member for Schubert says, you could have a bullock in a freezer. I remember once I had a big kill of prime lamb—13; I guess it was an unlucky number—

The Hon. P.F. Conlon interjecting:

Mr PEDERICK: We had quite a bit of home-killed meat in the freezer.

Mr Venning interjecting:

Mr PEDERICK: Absolutely.

Mr Williams interjecting:

Mr PEDERICK: No. Just for the benefit of the house, they were definitely my lambs, and they were very good eating. My family does not enjoy the same benefits as the minister to just be able to duck around to Woolies or the corner store at a moment's notice. There is nothing quite like home-grown beef or lamb: at least you know that it is properly labelled, so to speak. So, there are certainly some difficulties moving forward with respect to whatever proposals are put up as far as energy saving, which I commend. I think we all need to do it, and sometimes monetary measures are what is needed to do so. However, we also do not want to place an unnecessary impost on people, especially those who can least afford it.

I digress a bit to talk about clean coal technology, which is our main baseload power source at the moment. Some say that the attainment of clean coal (which may never happen) would involve a carbon permit price of about $100 per tonne. I would say that that would increase electricity prices not by 16 per cent, as has been stated, but by 40 per cent or better, which would really hurt the man and woman out there in the greater electorate. Those are my concerns with respect to any of these schemes.

I am all for reducing emissions, but not at all costs. Industry representatives to whom I have recently spoken say that, whatever part they take in an emissions trading scheme, if it all gets too hard they will just go offshore and build their industries in countries where they do not need to record their emissions.

I think that we must be very careful about how any sort of scheme is managed, because we have to make sure that we have a real benefit to a global issue—and it is a global issue. If we just fritter around the edges, the only people we will fool is ourselves. However, I fully endorse making energy savings.

I remind members that, with the introduction of an emissions trading scheme, the coal industry has the benefit of being able to access free permits. I hope that similar industries, such as agriculture, are looked on just as favourably, because there is not much point switching off a light or putting in an energy efficient globe if a company can just put its hand up and obtain free permits and there is no encouragement to reduce emissions.

I note that a retailer is obliged to participate in the scheme if it has over 5,000 residential customers under its licence per year. I just wonder whether, under the scheme, companies might just split themselves up into different entities and keep under that level. I know that would be difficult, but I guess—

The Hon. P.F. Conlon: They are not able to do that.

Mr PEDERICK: That is good. I think that would create a lot of logistical problems. However, I guess it would be up to each company to assess that in the broader market. Obviously, retailers will face significant penalties if they do not comply with the scheme.

As I was saying, we do have concerns about the implications for energy prices, especially in relation to the impending carbon pollution reduction scheme. Obviously, at the moment, they have the South Australian renewable energy feed-in scheme. It has been stated that, if you wanted to enter the scheme, you would have to buy the metering to hook into that scheme. That is worth $400, and some say that it takes 18 months to pay for it. I think it is a commendable scheme but, as with everything, people add up the costs of getting onto all these things and work out whether or not it is worthwhile. With that contribution, I do support the scheme, but we do need to be cautious.

The SPEAKER: The member for Schubert.

Mr VENNING (Schubert) (11:25): Thank you, Mr Speaker.

The Hon. P.F. Conlon: What have you got in your freezer?

Mr VENNING: It varies from time to time. It does vary: it depends which one you're talking about. As the member for MacKillop said, we are supporting this bill, but it does raise a lot of material which could be debated in this house. I believe that we can all save power, because, like everything, power has been too cheap for too long and we have been on the gravy train, so to speak. It is a very appropriate time to say, 'Hang on; regarding the saving of energy, we ought to be looking at how we use this valuable resource.'

I remind the house that the Liberal Party's record on electricity is the best of any party and, in fact, probably of all the parties, it is the thing with which I am the most impressed. The Liberal Party's record in relation to electricity and its distribution is fantastic. Visit a farmhouse in any country in the world and see whether that house is connected to the grid as it is here. It was the Playford Liberal government that must have spent a fortune—an absolute massive amount of money—connecting all the little communities. All the distant farmhouses are on the grid via a SWER (single wire earth return) system. It is fantastic.

People have forgotten that, but it must have been a huge impost to the then government. It had to be—massive. You can imagine what it would cost to do that today. Go to any of the rural communities and you will see the wires going across to the houses—sometimes six to eight kilometres just to get to a single house. Just imagine that. What did it cost? I am afraid that people have all become very blase, and we ought to appreciate what was done and what it must have cost for that power to be connected.

The problem is that much of that was built in 1960. That is nearly 50 years ago, and the cost of maintenance, repair and sometimes replacing it will be of great concern. In many areas, the single wire system is no longer big enough to take the load because there can be up to, say, 30 or 40 various users on a single wire system and it gets overloaded, particularly with the larger welders and larger air-conditioners of today. So, there is a problem with that, too.

It is all part of it, and I think energy efficiency comes into this. This also enables us to fairly share this resource on a system like that. If it is more efficiently used, there will be more power, particularly for those on a single wire system. It concerns me very much that, over the years, we have accepted this wonderful asset but we have not done anything about putting away something for asset replacement or maintenance. I think we need to consider that, certainly within the next 25 years, we will have a problem. We should not forget about that—

The Hon. P.F. Conlon interjecting:

Mr VENNING: I hear what the minister says. I remember the debates back then. You need to read the debates back then. It was a great debate between Sir Thomas Playford, Sir Arthur Rymill and others. It is great reading; you have a read of it. Isn't it funny what history tells us? It was a great debate, because Playford was then the great regulator, the agrarian socialist—the greatest Labor premier that the Liberals ever had, I have been told. However, I do not care; whatever he did was fantastic—and look at the results. I applaud the previous federal Liberal government and the now federal Labor government for the rebates they give to encourage people to fit solar cells.

Personally, I and my family have considered this but we have not done anything because it is just not worth it. When you fit these facilities, your current tariff alters with your supplier and you change to a different level of tariff. We have worked out that as a result of our own usage it is of no benefit to us. Even over 10 years cost recovery, there is still no benefit. It needs to tie in the supplier. If we could maintain our tariff level at the same rate, I am sure we would be in there. We ought to be doing something about that and we ought to be encouraged to do it. It is fantastic that people install these cells.

In our regions where there is a lot of sunlight, people ought to be encouraged to do it. I have renovated several homes in my time but there was never enough incentive to install a solar hot water service, which is the single biggest saver of power. We have a solar hot water service installed in our house and for only one or two days a year we switch on the power. After four or five cloudy days, we just switch on the booster. The single biggest saving is a solar hot water service, but there is not enough incentive—and there has not been an incentive for years—for people to find the extra cost to install it. After all, it is far cheaper to install it when you are building a house rather than trying to install it afterwards.

Retrofitting of these things, as well as buying the equipment, is extremely expensive. We have made huge inroads, but I would like ministers at both the state and federal levels to consider why more people have not jumped onto the rebate system. They have not done so because of the arrangement in which suppliers tie you up. They do not want you to do that and they hold you to ransom, purely because they say, 'If you fit one of these things, your tariff range will change.'

Mrs Geraghty: Ours didn't change.

Mr VENNING: Well, I am happy to hear that. I saw the minister make a note then, and I hope to hear what he has to say. Certainly, we would be doing it tomorrow, particularly when we hear that it will not continue forever. I believe that we should be looking at this issue.

I also note that the bill lists several things that we and the general consumer should consider in relation to doing our bit about the Residential Energy Efficiency Scheme—which this bill is about. The first one listed is energy efficient globes. I have messed around with these globes for years. When I bought my first ones it was at a huge cost. It is my experience that I never get the life out of these globes that they say I should. Whether it is because of the voltage drop, I do not know. We are now told that there is a problem with the disposal of them because of their mercury content. So is it such an advantage? The old globes were cheap at $1.50 or $2. These globes cost $9 or $10 for quality ones.

Secondly, the bill refers to the installation of low-flow shower heads. We fitted those but they are now in the shed because I did not like them. More work needs to be done on them. These things are just back stinging devices. I call them squirt aerators rather than a shower head. Most of us are used to a nice flood of water rather than the squirt that comes from these little shower heads.

Mrs Geraghty interjecting:

Mr VENNING: Maybe the member for Torrens has a newer one. We shower in rainwater. Maybe we should do something about that. In relation to a second freezer, most of us have fridges in the laundry or on the back veranda. It is usually only half full.

Members interjecting:

Mr VENNING: You are right; we have been rather extravagant about that. Often we have the car fridge which is in the car and which is plugged in. When you count them, you would be surprised how many refrigeration items are plugged in. We need to be reminded about that; and I have no problem with that.

In relation to energy efficient hot water systems, solar heat pump or gas, as members will tell you—and I know one member will do so—in some areas we do not have gas and in other areas, particularly in the South-East and the Adelaide Hills, there is not much sunlight on some days, so we need to have a bit of flexibility.

Mr Pederick: It's always raining down there.

Mr VENNING: Well, that would be nice. I'll take the rain, you can have the sunlight. We need to be flexible about that. With respect to ceiling insulation, I understand that the federal government has something going on there at the moment. I just hope that that is accessible because I have had several calls to my office and we could not give people the exact information they required because it is all a bit fuzzy. I hope that has been resolved, but I think it is a great thing. That ought to be automatic. It should be mandatory that every new house has adequate ceiling insulation and also draught-proofing of ill-fitting doors.

You go into some homes and you see heating devices and you know that they are absolute power guzzlers, particularly the oil columns that you wheel around. They are convenient, yes, especially for the nursery, but do they gobble up power, particularly in these large country, stone homes. These things gobble up electricity, and people leave them on all day. Again, an education program, minister, would be a good idea. Let these people know what these things cost to operate versus, say, a reverse cycle air conditioner, which is—

Mr Pederick: Or a door snake.

Mr VENNING: A door snake? That is right, he is the minister for door snakes, isn't he? All jokes aside, he is correct. After his comment, we went and bought a couple of door snakes and they are used. They are common sense, especially when you can feel a draught under a door on a cold night. We are supporting this bill, but we need to have an open brief on this. I have put several questions and, when he closes the second reading, I hope the minister will address them.

Mrs REDMOND (Heysen) (11:36): As has already been indicated, the Liberal Party is supporting this bill. Essentially, as I understand it, the bill relates to the imposition of penalties, and it certainly makes no sense to me to introduce a compulsion regime without having penalties in place. In that sense I do support the essence of the bill. I wanted to speak more particularly about one aspect of the bill, that is, the Residential Energy Efficiency Scheme (REES), because I do have some questions that I will be pleased if the minister can answer. He did indicate during the contribution of, I think, the member for Schubert, that these companies that are obliged to comply with this would not seek to avoid complying by reducing the number of households on their licence and dividing themselves up into smaller companies to avoid these obligations.

I am sure that the minister will be able to tell us the details of why he is so certain that will not occur. I am quite happy to take him at his word on that, but I will be interested to hear just how they audit the auditing process. My understanding is that each of these retailers is obliged to go around to houses and conduct audits and supply a range of things to them, including the famous door sausages (as we used to call them)—the door snakes or draught excluders (whatever you will), energy efficient light globes and low-flow shower heads.

All that sounds very well in theory but, when you start to think about it, what I want to know is how you then audit the outcome in terms of greenhouse gas reductions. I agree with the member for Schubert's comment that draught excluders really do make a difference. I use them, and, in fact, I can recommend a very clever innovation on a draught excluder. The big problem with a draught excluder is that you can have it at your door but, when you leave your house, you open the door, close the door behind you and, if it is just a door snake, the thing is there. Some smart person figured out that if you put a bit of material underneath and joined another one on the other side, you have a double-edged draught excluder, so that when you pull the door shut you stop the draught from going in.

My question really is more about the issue of how you then determine, having supplied your low-flow shower heads and all those things—

The Hon. P.F. Conlon: It's energy use.

Mrs REDMOND: The minister is saying that it is about energy use, and I have to say that I am trying to be more conscientious. So, in spite of the rate of payment for electricity going up, I am managing to reduce my bills. I find very useful the little diagram on my bill comparing my usage this year with my usage last year, and I can tell I am using less energy all the time. I have put in heaters that use J tariff (the off peak tariff) and I have noticed also that the J tariff is going up at a much faster rate in terms of cost than the other tariff, so it is gradually becoming less useful having your heating on J tariff.

I wonder about the value of a range of these things, for example, so-called energy saving light globes. I have found them to be singularly inefficient. They do not provide light that is as good. I do not mind the fact that they come on a moment or two after the other lights. My house is an old house and has several light fittings which take five and seven light globes, and certainly they have not lasted nearly as long as ordinary light globes and, increasingly—

Mr Pisoni interjecting:

Mrs REDMOND: As the member for Unley says, they cost a lot more. So they are costing me a fortune for no apparent improvement in efficiency. I would be prepared to tolerate the slightly lower level of light that I achieve, but it seems to me that they are preposterously overpriced and extremely hard to dispose of. I get complaints to my electorate office about where we can take these, and I think I may have even written to the minister about how we do that. They simply do not last. In fact, I had one the other day explode across my lounge room floor, and I am still getting out bits of glass and it took a long time to get the rest of the globe out. So, I have a light at the moment which is not working because I installed some of these things.

The minister is already well aware that I have some difficulty with the idea that it will now be compulsory when your hot water service reaches the end of its useful life to replace it with a service which is either solar, gas or electric heat pump. I thank the minister for making his officers available to talk to me about that, and we will no doubt talk about that further.

However, at the end of the day, I really wonder about the benefit in terms of creating lower greenhouse gas emissions of promoting to customers the idea that they perhaps get rid of their bar fridge. The bar fridge, especially if it is only opened very occasionally, does not seem to me to be a really big problem in a household. I would have thought that an inefficient fridge without a good seal on it is more of a problem. I would have thought that using dishwashers is more of a problem. I would have thought the same about using a clothes dryer, which is one of the most inefficient things in the world. I constantly try to get my children to use solar power to dry clothes—I think hanging them on the line is the best way to dry clothes.

I am fearful of the situation in some states of America. In some parts of America it is actually unlawful to hang your clothes on the line, and it strikes me as an absolute nonsense that America can regulate that. I know this from having spent time there. I was in North Dakota during one summer when it was 110º Fahrenheit, quite hot weather. We were the only adults using the local swimming pool—it was all kids. However, the interesting thing was that when we came back to the house I would, of course, rinse the clothing and get the towels and swimming costumes and put them on the line to dry, and my mother-in-law would rush out to the clothesline and grab them all, take them down to the basement and put them in the dryer—and it was 110º Fahrenheit outside! I worry about the thinking of these places, so I am pleased that we are heading in somewhat the right direction.

However, as I said, I worry that we are concentrating on the idea of removing a second fridge or a bar fridge which, although the minister says it is on all the time, uses a minuscule amount of energy if it is not being opened and used—

The Hon. P.F. Conlon: That's not true.

Mrs REDMOND: It certainly does not use anything like the energy of a clothes dryer, yet I think people use clothes dryers far too much in our society, as they do dishwashers.

The Hon. P.F. Conlon: That's why you like the scheme; it mandates nothing.

Mrs REDMOND: As I said, I thoroughly endorse the idea that we have penalties for non-compliance because it is silly to have a scheme where you have a compliance regime and then no way effectively to enforce it. However, I raise some questions in terms of the underlying scheme about how effectively we are going to reduce greenhouse gases, and I absolutely endorse our desire to reduce greenhouse gases. I just do not see that some of these things are necessarily the most efficient things. I think that ceiling insulation, for instance, is an absolute win—easy, no questions—putting in ceiling installation is going to fix a whole range of these things.

The Hon. P.F. Conlon: You don't mandate anything; you've got to get the reduction.

Mrs REDMOND: The minister keeps talking about not mandating anything, and I am glad about that, but at the end of the day, if you have teenagers at home, it will not matter whether or not you have a low-flow shower head. If they are going to shower for 45 minutes, you will still have problems with the energy use.

I am pleased to report that I no longer have teenagers and, as well as saying to them that 'board' in our household is no longer spelt 'bored', we have a new concept of board in our household. Furthermore, because the electricity bills were going up, I said, 'In addition to paying board, you are now going to pay a percentage of the electricity bill.' That actually had quite a good effect on their attitude to how much electricity they wanted to use, how often they wanted to use the dryer and how many lights they left on.

My youngsters (I say youngsters although they are in their 20s) have been working lately and have been down in town by 7am, so they have been leaving when it is dark. Some mornings I get up and find that every light in the house is turned on. I am pleased that, as in all good systems, there are carrot-and-stick approaches and, to some extent, the carrot works and sometimes you enjoy using the stick in terms of saying that you must pay a share, and that has had some beneficial effect.

As I said, I absolutely endorse the idea that we want to reduce greenhouse gases. I am not persuaded that these schemes are likely to be as effective as we would want. I absolutely agree with the minister that we do not want to be mandating what people have to do, but I think we need to think a bit more about what other approaches we might take, what other things we might do to induce people to behave in a way which is going to result in the reduction of greenhouse gases and unnecessary use of power in our community overall.

Mr PISONI (Unley) (11:49): I take this opportunity to make some comments about energy-saving and the things we can do as governments, societies and communities. I was made very aware from a very young age about the value of saving electricity and keeping the house warm by being smart about the way we operate the house. Although my father is Italian, I did not learn a lot of Italian as a kid but I did learn 'Chiudi la luce' which was 'Turn off the light' because my father was mad about making sure that the light was always turned off in rooms that we were not occupying and would run around after us whenever he was home, shouting 'Chiudi la luce, chiudi la luce'; in other words, 'I do not want to have to pay the excess power bills that we will get because the light is operating in a room that I'm not using.' Unfortunately, I was hounded with that message as a young boy and, as a result, I drive my own family mad. I do not actually demand that they turn off the lights, I just follow them around the house and turn the lights off after them.

When my wife and I were renovating our homes, both in Nailsworth and Hyde Park, we were quite taken by Art Nouveau pendant lighting. Therefore, we collected Art Nouveau pendant lighting as we restored the house room by room, and we took that with us when we moved from Nailsworth to Hyde Park. We then found that the light fittings take the so-called energy-saving globes; but, as the member for Heysen said, we experienced some frustration with the length of the life of those globes to such an extent that we have now started to write the date that we purchased them on the globes themselves, on the ceramic section just near the bayonet, so that we can confirm whether or not we feel we have received value from that globe. I think that the shortest period of time that we have received light from a globe before it has blown is about three weeks, which is a bit frustrating. We have found that the trick seems to be that, if you leave the light on and do not switch it on and off every time you leave the room, you tend to get a longer lasting—

An honourable member interjecting:

Mr PISONI: Well, the globes last a lot longer. At 12 and 15 bucks a pop it is tempting to leave the globe on when you are not in the room. Of course, it does save you that warm up period for that minute or two after you switch on the light when you enter the room. I would also like to contrast the way that this government, for example, tries to perceive itself as a so-called green government as opposed to actions that it takes.

I want to tell the house about the success of a green project in a high school I visited in Forest City, Iowa, last year, where a genuine wind proposal created real energy for their school. I documented this story in one of my newsletters last year, which went out to my electorate. Iowa is a very flat state and, of course, it can be quite windy; so, a lot of wind farms have been set up in Iowa over the past 10 years or so. Forest City High School felt that this was an opportunity for it to not only save energy from the grid for the school but also to use it as a school project for schools to introduce wind power and understand the benefits of wind power for the whole community.

The school project was set up whereby students and a teacher were given the task of doing calculations as to whether a proper 30 metre wind turbine tower on the school grounds would, first of all, generate electricity and whether that electricity would generate enough for the school to make a substantial saving. To cut a long story short, they estimated that the wind turbine would produce about 75 per cent of that school's power. Consequently, they went on to lobby the local government. In many states of the United States local government tends to have responsibility for schools rather than the state government.

They obviously needed about a $3,000 outlay to get the wind turbine built and installed. The residents might not necessarily have had children as students of that school at that particular time but, at some stage, would have had their kids going to that school because it was the only high school in the town. Forest City has a population of about 5,000 people. They held a plebiscite, if you like, of the town, and everybody agreed to placing a levy on their property taxes to enable the school to raise the money to purchase this wind turbine. That levy would have a sunset clause, so when enough money was raised over several years they could purchase the wind turbine and the levy would be removed, having served its purpose. Consequently, that is what happened and the wind turbine was built—and they were right: it does provide about 75 per cent of the school's power.

Let us contrast that with the Green Schools program of the Department of Education and Children's Services here in South Australia, the Minister for Education and Children's Services, the Premier, Mike Rann, and their so-called green credentials. When I asked questions of Public Works about the solar panels and wind turbines that were to go into South Australian schools and what they would deliver, I was told that the question could not be answered and that they would have to get back to me. When they did, we found out that, provided of course the wind turbines were working (and I will cover that shortly), on a windy and sunny day the renewable energy component of that school would power three computers for about eight hours. Of course, if there was cloud cover or it was one of those beautiful, still days, that would be greatly reduced.

On top of that, we have a DECS policy that schools must reduce their power consumption to 2001 levels. I know that the school at which I am a parent, and where I am on the school council, now has a $30,000 shortfall for this year's power bill because its budget has been reduced accordingly. It has been impossible for the school to meet that reduction in power consumption, particularly, as we know, because in 2001 a computer in a school was a novelty, yet it is now a tool of trade. We will see even more of those computers introduced into schools, whether they be laptops or desktops. They will, in fact—

The Hon. P.F. CONLON: I rise on a point of order. The bill before the house relates to penalties for the residential energy efficiency scheme. The member for Unley has been talking about schools for the last 10 minutes; they are not in any way, shape or form within the purview of this bill.

The SPEAKER: I uphold the point of order. The member for Unley has drifted away from the bill in question.

Mr PISONI: The bill is, of course, about saving energy. I am a strong supporter of saving energy, and I spoke earlier about the measures I have taken in my own home to save energy. I know the energy minister is embarrassed about the government's policy in relation to schools, and he will be even more embarrassed about the failed wind turbines—

The Hon. P.F. CONLON: I rise on another point of order. The member for Unley is not taking any notice of me and I do not think he is taking any notice of you either, Mr Speaker.

The SPEAKER: There is no point of order.

Mr PISONI: I would like to quote from the September 2006 edition of E-mission, the government's climate change newsletter, regarding the mini wind turbines that the government purchased. The newsletter stated:

Mini wind turbines are being installed on prominent buildings in Adelaide's CBD as part of a Rann government's commitment to renewable energy. 'The first of five [wind] turbines was installed on the roof of my office-building—

this is the Premier speaking—

in the State Administration Centre in Victoria Square and a second has been commissioned on Wakefield House,' Mr Rann said. 'This is the first installation outside of the United Kingdom—

another world first, incidentally, for South Australia—

of…rooftop wind turbines, which can provide a cost-effective renewable energy source for homes—

and this is the residential section for which the minister has been waiting—

communities and industrial buildings. The mini wind turbines installation, as part of the Capital City project—

and I suppose residential homes are included in Capital City projects as well—

is another example of our commitment to renewable energy initiatives.

Well, let us just look at the story behind these wind turbines. In November 2006, Swift 1.5 kilowatt turbines were installed on the roof of the London Climate Change Centre, and these were the very wind turbines the Premier was boasting about. Six weeks later, the wind turbines were recalled because of faulty components. Replacements were promised to be delivered within weeks, but the new wind turbines did not arrive until early 2008.

In June 2007, Rann extended the mini turbine program and announced funding of $331,000 for 20 turbines. The Premier claimed that the investment would cut 280 tonnes of greenhouse gases per year, or 1.4 tonnes per turbine. So, that is the claim made by the so-called green Premier. Obviously, the Premier was hoping other states would be green with envy about his policy.

In November 2007, there was a report in the Guardian newspaper stating that mini turbines in urban areas produce only a tenth of the power predicted and that the manufacture and maintenance was likely to add to the owner's carbon footprint. Oh, okay! Experts suggested that solar heating and better insulation would be more effective investments in renewable energy. I note that those sorts of things are covered in the minister's bill, and I support those measures.

Autodom Limited, a subsidiary of aiAutomotive, an automotive components company, became a joint partner with Insurance Australia Group in the distribution of the Swift micro wind turbine, which is the same micro wind turbine located on the administration building that Premier Rann was boasting about—and he had just spent $330,000 to buy more of these wind turbines. Their new venture—Micro Wind Turbines Australia Pty Ltd—was capitalised with $500,000.

A company announcement on 13 January said that the venture was 'driven off the back of the South Australian government's leadership in developing business opportunities for companies that want to get on board its climate change initiatives'. The announcement also claimed that the South Australian government had provided an order for 40 Swift turbines for its buildings. Swift's owners, Renewable Devices Pty Ltd, a firm started by two young Edinburgh engineers, claimed that it was now valued at £30 million, having sold a 2 per cent stake to an Australian company. Interestingly, that Australian company was the provider of the Rann wind turbines.

On 16 February 2008, the London Climate Change Centre's experiment with mini wind turbines was revealed to have cost £UK436,000 for 14 turbines and had resulted in an economic value of £3,560. The London Assembly was told that the scheme was an expensive flop. Peter Hulme Cross MP said:

So much for this being a flagship project. The lesson for anyone concerned with energy conservation is to look elsewhere for energy-efficient solutions. The scheme is a flop.

I suppose it would be a flop, regardless of whether the installation involved the roof of commercial or residential premises.

On 16 April 2008, the education minister, Jane Lomax-Smith, announced that wind turbines (the very same wind turbines that had collapsed in the UK) and solar panels would be fitted to South Australian schools when they underwent a major upgrade, as part of a Rann government initiative to help 'green' state schools and preschools. She claimed the move would help schools improve their energy efficiency and environmental sustainability, and 13 schools were named as being the first to get the wind turbines.

In July 2008, aiAutomotive's CEO resigned. On 31 August 2008, in an announcement to the stock exchange, Autodom stated that it would 'write off all the carrying value of investments made in Micro Wind Turbines Australia Pty Ltd'. Its 50 per cent investment was listed as $300,000.

On 16 September, Zelco Lendich resigned from the board of Autodom, the parent company of MWTA Pty Ltd, and was replaced by Scott Mutton, a South Australian and former owner of Henderson Components now acquired by Autodom. Scott Mutton's job is to run Project Refocus, aimed at turning the company around after what is described as a 'dreadful financial performance', and obviously he was referring to this investment in the Premier's wind turbine.

The SPEAKER: Order! The member for Unley is canvassing issues that go way beyond the scope of the bill. They may be valid issues for him to raise, but this is not the time nor the place to raise these other issues. The member for Unley must confine his remarks to the bill and to the passage of the second reading of the bill. That does not give him licence to probe into other areas of the minister's portfolio. The member for Unley.

Mr PISONI: Certainly, sir. I thank you for your advice. In closing, I would say that the opposition is supporting the bill, but we do need to remember that things tend to start at a smaller level and move out into bigger areas. Although I may have been speaking about schools and the Premier's claims about his wind turbines, this does affect every household because we are all very concerned about energy use.

We are concerned about global warming and the effect that global warming has on the environment. This bill will help South Australia go some small way to pulling its weight in the world as a global citizen in helping to reduce energy use and consequently, because here in South Australia we do rely heavily on fossil fuels for our energy production, this will have an effect on our contribution to reducing greenhouse gases.

Mrs GERAGHTY (Torrens) (12:07): I have listened to members opposite and I feel somewhat disillusioned, disheartened and quite depressed about the whole thing. You can contribute to saving greenhouse gases and, while you are doing that, save money. We have installed solar panels at home, so we have saved money on electricity.

Ms Bedford interjecting:

Mrs GERAGHTY: Thank you. Yes, the member for Florey says that we have had them for a long time. So, we have saved money on electricity. We use energy efficient light globes; in fact, we have been using them for donkeys years, and I have never had one explode. We do not always buy the most expensive, but I have never had one explode.

I agree that some have not lasted as long as we would have liked, but the normal old globes—I cannot remember what they were called—did not last very long either in a lot of cases. Some of that is the light fitting. Some light fittings—I would say the cheaper made ones, but still expensive—do damage the globes, and so the globe goes. So, we have saved money on electricity. We are putting power into the grid and saving ourselves some money.

On the weekend we were looking to replace one of our freezers, because we have a fridge freezer and a separate freezer and we were looking to replace that. I know everyone says that that will cost more, because we are looking to replace it with a bigger one, but there are those now that have new energy efficient gases. I think it is an R600a gas, or something like that. I am not really up with this stuff so do not take my word for it. You can buy freezers and fridges with this new gas in, but they are difficult to come by, which is the problem that we have found. We have been shopping around for one because it is more energy efficient.

We have also had to replace our air conditioner in recent years, so we looked for an air conditioner that had an inverter in it which is more energy efficient, contrary to what the member for Schubert says. We have water-saving shower heads. It takes a little bit of getting used to but we get a really good flow out of it. We have reduced our water consumption quite dramatically, not just through the use of the shower head but through other means, as well.

So, I think there really are ways that we can contribute to saving our environment and, at the same time, save ourselves money. It requires a little bit of homework. You can either get onto the net where there is plenty of information available or you can go through government departments, as we have done, to get advice about items that can be purchased which are energy-efficient and which, in the long term, contribute to our environment by saving greenhouse gases and, most importantly of all to quite a number of us, save us money. I would not be pessimistic about any changes that people can make, and I most certainly support the bill.

Mr RAU (Enfield) (12:11): I have been listening to this very informative debate with considerable interest and I have found a number of the contributions thought provoking. The member for Schubert has provoked me into thinking about a matter which I now want to put before the chamber. I hope the minister can listen to this matter a little bit. What I am about to say is as relevant as most of the contributions that have gone before, with the exception of the honourable member for Torrens.

I do not know how many members in this place have been to the toilets in Parliament House but I assume that, at some point or other, most people have been there. Members may or may not know that approximately 12 months ago (it might have been a little bit longer) the fairly majestic large porcelain models which were there disappeared—completely disappeared—and, overnight, a number of very sort of art deco looking super thin models turned up.

What I think is very important to be considering in the context of this debate, and particularly in the context of the honourable member for Schubert's contribution about his shower, is that they are apparently intended to save water, because the cistern is smaller than the cistern in a normal regulation device.

However, whoever invented them did not put enough water in them for them to do the job properly (if you will excuse the pun) when being used only once. What happens is that—and, minister, I would like you to consider this in the context of the bill—people are obliged to press the button and then wait and then press the button again. It has come to the point—

An honourable member interjecting:

Mr RAU: I have not been into the ladies area so I cannot comment on that but I can tell you that, in the gentlemen's area, there is now a sign on these things—I will not go into what it says on the sign because that is probably a bit tasteless—but it does invite people to use the brush. If that is not an admission—a tacit admission, at least—that there is a design flaw with these things, I do not know what is. It is very frustrating.

I contemplated whether to raise this with the JPSC or whether I should have spoken to Madam Deputy Speaker or perhaps the Speaker, but I thought that, since we were in the context of this particular legislation and since the contributions of the member for Schubert have focused on so many of these issues, it was probably an appropriate matter for me to raise. It comes out of the school of thought that gave us the contribution on the shower rose; that is really how we come here. I ask the minister whether, in working his way through this problem, he can take some account of this, and his own experience, no doubt, in this building, where he has seen this inefficient efficiency.

The Hon. P.F. CONLON (Elder—Minister for Transport, Minister for Infrastructure, Minister for Energy) (12:15): The debate today is on the penalty scheme for an act already passed by the parliament. I do note that people then took the opportunity to debate the previous act—fair enough! We get off it a bit, and some went a little further. Then we had the member for Unley essentially going on with whatever was plodding through his stream of consciousness at the time. However, I can say that I do not know if the member for Enfield reached new heights or plumbed new depths.

I will answer some of the issues that were raised, even though I think they were not entirely on point. I refer, firstly, to the member for Unley and the absolute lack of any depth to his contribution. The member for Unley says that Iowa is a success because the school has a wind tower and South Australia is a failure.

I wish he were here so that he could tell me just what the installed capacity of wind is in Iowa, because I am sure he knows. I am sure he could tell me what the installed capacity of wind in Iowa is as a percentage of the overall installed capacity. I could tell him that South Australia has a percentage of installed capacity in wind that is exceeded, I believe, only in some part of Scandinavia. It is outstanding.

Mr Bignell: It was zero under the Libs.

The Hon. P.F. CONLON: It was zero under the Libs. It is now recognised by many world commentators as being one of the greatest achievements in renewable energy in the world but, according to the member for Unley, apparently it is not a success because the wind towers are not built in schools.

I am struggling with that one, and I am not quite sure how many schools would like a wind tower out on the oval. It might make a mess of the footballs when they are kicking them, for example. It is a tremendous example of the lack of any depth of analysis when dealing with what is a serious matter.

Coming to that matter, this bill is about penalties for failure to meet the Residential Energy Efficiency Scheme. It is not about mandating any type of power, and it is not about any type of renewable energy. It grew from some acts interstate but, also, from a scheme of low income energy audits which we ran at government expense which proved to be outstandingly successful.

The central point is that it is an energy efficiency scheme for residences where people do it primarily—oddly enough, in this world—because it will save them money. It will also, as a result of using less energy (you would think) reduce carbon emissions. The audits have worked and have worked in an outstanding fashion when they were run by us.

I thought maybe, for some of the speakers on the other side, it would be a bit of a giveaway that the scheme is particularly aimed at low income households for two reasons: they are the people we would like to see benefit from residential efficiency and they are also the type of people who have not had either the information or the capacity to make the investment to improve energy efficiency in their homes.

Another important element of residential energy efficiency not touched on by the other side is that part of the audit that goes to making the homes more efficient at times of what you might call weather extremes. In particular, if we make homes more efficient in times of heat, the demand on air conditioning comes down. That is only 5 per cent of the year, so, in terms of overall energy efficiency, it is not so relevant but, in terms of the cost of installed infrastructure for electricity, it is enormously important and goes very much to the price of electricity and the dangers people face.

The lead speaker for the opposition relied on a minute, which I have not seen, from the Victorian government saying that you should let the most cost-effective way of reducing energy proceed. That is exactly what the scheme does. The retailer is not told what to do, nor is it mandated. The retailer is mandated to achieve energy efficiency in the best way they can. I would have thought that what they were purporting to read was support for the scheme.

However, what I could not get over was the criticism that, by doing this and by reducing emissions voluntarily, we were letting off the polluters. This is such a tremendous example of how the opposition loves to walk both sides of the street. During the Frome by-election of blessed memory (wasn't that a marvellous time?), they were up there running around telling people that the emissions trading scheme would punish industry—in this case, a zinc smelter.

Mr Pederick interjecting:

The Hon. P.F. CONLON: I am talking about this notion that we are letting off the polluters. According to the opposition, one day they are industry, the next day they are polluters; you cannot have it both ways. I say to you: if voluntary action, voluntary improvements, saves people money and reduces the burden on industry, I do not have a problem with it, and I do not know why you do. I certainly do not have a problem with it. Can I tell you this: if you take your logic to its conclusion—that we should not have these voluntary improvements in existing homes—you must then say that we should not mandate new designs for new homes to make them more energy efficient because that just lets the polluters off the hook.

In his confusion, the opposition spokesman said that one of his criticisms of the scheme was that our achieving energy efficiency in homes meant that industry (or 'polluters' as they call them) faced a lower target. If you take that to its logical conclusion, we should not impose building standards, either, because that will also let them off the hook and lower the standards. It is patent nonsense. On this issue, the opposition demonstrates nothing but its confusion.

It was good to see that one or two opposition members actually made some reference to the bill before us, rather than to something that was not before us. Retailers with under 5,000 residential customers should not be very common in the industry. The reason they would not break themselves up into fewer than 5,000 homes in small businesses is not only that they must have a billing scheme for each and every one of them but also that the South Australian energy market is extremely volatile, and the larger retailers are better able to manage that volatility. No-one in the market is exposed to greater risk than small retailers, particularly at a time when liquidity in the market seems to be very tight. I have no fear of that occurring, unless it were done by some ruse, and we would not allow that to happen.

In terms of the penalties going somewhere other than consolidated revenue, my view is that we will see very few penalties out of the scheme, and I would hope that to be the case. The government is aiming to achieve not fines but outcomes. The government ran a substantial number of audits (I do not know the exact number) through welfare agencies, and we know that if the retailers make a modicum of effort they can get outstanding results. So, we are confident that, as long as the retailers apply themselves, no-one needs to face a penalty.

Everyone had a bit of fun talking about the best way to reduce energy and improve energy efficiency. We are quite happy to hear all that but, at the end of the day, it is about the retailer finding the most cost-effective way of achieving that and aiming it at low income households; if they do not do that, they face a penalty, as per the bill.

We believe that this is a small piece of a comprehensive approach and not a piecemeal approach. One of the things that we have achieved out of the previous energy audits was the removal of a lot of very bad second fridges. In low income households, the second fridge tends to sit there running all year, even though there may not be a lot in it and, because it is an old fridge, it may well be leaking through a seal. The truth of the matter is that removing those second fridges was one of the great successes of the previous audit. So, even though some people may think it is not effective, I can tell you that it does work.

Overall, it is about the outcome. It is not about mandating a way to do it. I want to make the point that that does not work, because some people are doing this stuff already. They are not the households you aim it at. You do not go out to an energy-efficient household and seek to improve it: you go to an energy-inefficient household. Because this does not mandate an outcome, it may well be that, in conjunction with what is happening separately, installation is one of the major outcomes in terms of the move to energy efficiency.

Members would not believe some of the things that were seen in the audit of low-income households regarding energy efficiency. There were air conditioners sitting in windows with gaps to the open air. Many improvements can be made. This is a scheme to work in conjunction with new planning laws that require energy efficiency in buildings. It is about not wasting energy. This is not a scheme to get more renewables on, as some people seem to believe. It is certainly not a scheme about mini turbines or schools, as the member for Unley—in that dimly-lit world of his—seems to believe. It is a very useful thing for those who save money, and it is a very useful thing for the environment. It is a scheme that I think should be embraced a little more warmly and without the carping, whingeing, whining and complaining from the other side, and I commend it to the house.

Bill read a second time and taken through its remaining stages.