Ministerial Statement

DESALINATION

The Hon. M.D. RANN (Ramsay—Premier, Minister for Economic Development, Minister for Social Inclusion, Minister for the Arts, Minister for Sustainability and Climate Change) (15:13): I seek leave to make a ministerial statement.

Leave granted.

The Hon. M.D. RANN: I am pleased to advise the house that the government has delivered on its commitment that the $1.83 billion Adelaide desalination plant will be powered by 100 per cent renewable energy. I am also pleased to advise that AGL has been chosen to supply that renewable energy. AGL will supply renewable energy to meet 100 per cent of the electricity consumed by the Adelaide desalination plant over a 20 year contract period. This also includes the electricity consumed by the marine works and the transfer pipeline system.

The agreement with AGL ensures that 100 per cent of the renewable energy will come from GreenPower accredited sources—located in South Australia—now and in the future. The use of GreenPower accreditation standards will ensure clean and sustainable energy for the desal plant, one of South Australia's largest infrastructure projects.

We are confident that the approach by SA Water and AGL will ensure we have an energy solution that achieves the best environmental outcome for this project. This purchase means the electricity consumed by this desalination plant be met by generation that does not create greenhouse gas emissions. Obviously, when people heard about the desal plant, people expressed concern—environmentalists and others—about the large amount of energy it consumed, and so we are very pleased that that energy will be renewable energy.

In concert with the commonwealth's renewable energy target, this investment will provide a stimulus for more renewable energy development and investment in the future. This purchase will provide an environment for more investment in renewables by removing renewable energy available to meet the commonwealth's renewable energy target. There has already been $1.6 billion invested in wind farms in South Australia. Before this government was elected there was not one single wind turbine operating that I know of. We now have $1.6 billion invested in wind farms in South Australia.

In 2008-09, it is estimated around 2,000 gigawatt hours of electricity was generated from wind farms in South Australia, and this project will consume about a maximum of 480 gigawatt hours per annum. The opposition sneer—not one single wind turbine operating in their watch. We have more wind power not only than any other state but we have more wind power development than the other states combined. Currently, around 14 per cent of South Australia's electricity generation comes from wind farms.

South Australia is committed to remaining a national leader in renewable energy. We are home to about half of the nation's wind power, about 25 per cent of Australia's grid connected domestic solar panel systems and more than 90 per cent of national investment in geothermal energy. We are also increasing South Australia's renewable energy production target to 33 per cent by 2020, well above the national target of 20 per cent by 2020.

AGL has demonstrated a strong commitment to the development of renewable energy projects in South Australia. It is Australia's largest private owner, operator and developer of renewable generation, with more than $2.3 billion worth of accredited renewable projects either built or under construction. This is a significant contract for South Australia and follows a comprehensive and competitive tender process that included assessment against a range of criteria. SA Water has negotiated an outcome which is value for money, which provides flexibility of electricity usage and which is highly mindful of the environment.

The Adelaide desal plant is on track to produce first water by December 2010, and when it reaches full capacity in 2012, it will produce 100 billion litres of water per year—up to half of Adelaide's drinking water needs. The plant will provide water security through a guaranteed climate independent source of water for Adelaide that will reduce our reliance on the River Murray.

I am proud that the South Australian government is undertaking this project, powered by 100 per cent renewable energy, a project that will take pressure off our iconic river. Because we know that the drought is having a devastating effect on the River Murray, the Lower Lakes and the Coorong. But it is not just drought that is doing the damage. Over allocation and over extraction by the upstream states is doing potentially irreversible ecological damage to the Murray, Lower Lakes and Coorong.

The simple truth is that, of the water extracted from the Murray-Darling Basin, 93 per cent of it is drawn from New South Wales, Victoria and Queensland—93 per cent from the upstream states. Only 7 per cent is taken out in South Australia. However, it is in South Australia where the effect of overuse by upstream states is being most acutely felt. The Murray is dying from the mouth up. The Murray Lower Lakes and Coorong face an emergency. The government is doing what it can in the face of this emergency, including the purchase of 50 billion litres of water that will be delivered to Lake Alexandrina this summer—considerably more than the Liberals called for, if one remembers.

However, South Australia cannot avert the disaster alone. The government has advocated strongly for a truly national approach to the problems faced by the Murray-Darling system. Despite the Murray-Darling Basin Intergovernmental Agreement being signed last year, unacceptable barriers to water trade still exist in Victoria. These trade barriers severely hinder the ability of the federal government and South Australia to purchase water for the environment and increase the flow of water into our stressed Murray Lower Lakes and Coorong.

As you are aware, South Australia is therefore preparing a constitutional challenge in order to remove barriers to water trade in the Murray-Darling Basin. In particular, South Australia objects to Victoria's 4 per cent trading cap and 10 per cent non-water user limit. I am pleased to inform the house that the proposed constitutional challenge has already had a positive effect. The Victorian government has indicated that it is prepared to change certain aspects of its control over water trade. Victoria has undertaken to remove its 10 per cent non-water user limit by the end of October this year.

I, of course, welcome this move, but let me say this: the government is continuing with preparations for the High Court challenge on trade barriers. If Victoria does not remove the 10 per cent non-water user limit by 31 October, as promised, we will immediately proceed to the next stage of the challenge. I have written to the Prime Minister and the premiers of Victoria, New South Wales and Queensland stating South Australia's unwavering position on the proposed High Court challenge and our determination to do whatever it takes to save the Murray-Darling Basin and especially the Murray Lower Lakes and Coorong.

However, it is not just over-allocation and over-extraction by upstream states that is the problem. Water theft is a crime that takes water from all who depend on the Murray, but it is ultimately the environment, including the Murray Lower Lakes and Coorong that pays the highest price. South Australia is raising the stakes on those who thieve water from the River Murray by dramatically lifting penalties. Currently, the maximum fine for stealing water is $35,000 for an individual and $70,000 for a corporation. Under the new provisions, the maximum fine will increase to $700,000 for individuals and $2.2 million for corporations. The state government is massively increasing penalties for water theft. If anyone illegally takes water out of the Murray, the penalty will fit the crime.