Motions

Electricity Market

Adjourned debate on motion of Mr Marshall (resumed on motion).

Mr WINGARD (Mitchell) (15:37): I rise to speak on this motion:

That this house expresses its concern at the state of the South Australian electricity market and in particular, notes—

(a) the state government's energy policy over the last 15 years has delivered South Australian consumers the worst outcomes in the nation;

(b) the first ever statewide electricity blackout in Australia occurred in South Australia on 28 September 2016;

(c) electricity supply reliability in South Australia is the lowest in the nation;

(d) electricity prices in South Australia are the highest in the nation;

(e) the impact that high household electricity prices add to cost of living pressures;

(f) the impact that high business electricity prices add to unemployment pressures;

(g) unemployment in South Australia is the highest in the nation;

(h) both the Victorian and South Australian electricity markets were privatised at similar times, yet Victorians pay the lowest electricity prices in the nation; and

(i) the closure of the coal-fired electricity generator at Port Augusta has led to the increased importation of coal-fired electricity from Victoria.

I fully support this motion. We know that, after 15 years, this government has South Australia in an electricity crisis. They cannot keep the lights on in South Australia. Wherever you go across South Australia or around the nation, that is what people say immediately when you tell them you are from this state. They want to know why the Labor government in South Australia cannot keep the lights on. Business, in particular, is really feeling the pinch.

As we said, 15 years and the Labor government's policy in South Australia to bank on intermittent renewable energy has pushed out the reliable and affordable base load power in South Australia, and now businesses struggle to have the base load power they need to run their businesses. We know about the blackout—we mentioned the statewide blackout in September last year—and consistent blackouts across the board in South Australia, because this government in its energy policy has put an unrealistic reliance on renewable energy.

There is an excessive amount of wind and solar-powered energy in South Australia and the mix is wrong. The state Labor government has got the mix wrong, the point being when the wind does not blow and the sun does not shine, there is a power crisis in South Australia. That is what causes the problem. Where do we go when the wind does not blow and the sun does not shine? We go to the interconnector with Victoria and we get their coal-powered electricity. That is how we top up our system in South Australia. Of course, if capacity is pushed over the limit when we are using the interconnector in Victoria, then we have the rolling blackouts and the load shedding, as this government has come to deliver to all South Australians across the board.

We know businesses are struggling, and I get out and speak to businesses regularly. It is the number one agenda item whenever I visit them. Be it a small business, be it a large business, power is the key issue. They just want to know when the lights are going to be kept on, when they can get reliable energy. Big businesses looking to invest in South Australia, and small businesses for that matter looking to invest in South Australia, just cannot get that reliability. It puts uncertainty into the market.

Businesses say, 'Why am I going to set up in South Australia?' They say, 'Why am I going to stay in South Australia?' One business I spoke to last year said comparatively to their operations in WA, which are a little bit larger than they are here in South Australia, they pay exorbitant amounts more for power in South Australia. So, they are looking at what they are going to do, whether they rationalise, whether they stay in South Australia or whether they move to WA where they have other interests. The push is on for them to go to WA. We are seeing jobs leave South Australia because of it and that is disappointing.

We heard about Coca-Cola just last week. Again, they do their rationalisation. They are willing to invest $90 million in Queensland and shut down operations here. They are alarm bells, and the alarm bells are ringing nice and loud. Since the government allowed Alinta to close down—again, losing good reliable base load power and plenty of jobs from up north—the moment that happened, bear in mind that Alinta said to the government, 'We know that you are wanting to transform and we know we need to transform to efficient energy systems that are good for the environment. We know that. Everyone knows that, but it has to be a transformation that happens and does not shut down business, industry and jobs in South Australia.'

Alinta said to the government, 'Let's negotiate a deal and let's do this transition so that it is smooth and does not hit and have a big impost on businesses and workers in South Australia.' But the Treasurer, the blackout minister as he is also known, said, 'No, don't worry about that. You go your own way.' The moment Alinta said that they were leaving, power prices in South Australia went up.

A local business in my area, just so you have the numbers, was paying 6.926¢ per megawatt hour at peak and off peak, 3.617. The moment that changed, the prices went up to almost triple what the prices are now. From 1 January 2017, their peak power is 16.615¢ per megawatt hour, and their off peak is 8.273. So, off peak is now more than peak, all because this government closed down the Alinta power station willy-nilly, let it go, let it depart, and just said, 'No, we are going to rely on the system,' and that is the system they put in place—the system that has wind power and solar power and has not got that base load generation. That is the sort of cost that is hitting business, and as a result that rolls on to families as well.

We know from the September blackout, figures have come through from Business SA which has calculated the cost to South Australia at $367 million. Those on the other side will say it was a weather event, it was a storm, it was everything else—and it was. There was a storm, there is no denying that. Queensland has storms all the time but the whole state does not black out. That is the imperative here: the whole of South Australia, right to the border, north, south, east and west, blacked out in its entirety, and that is what we have been given from this state Labor government.

The whole state can be blacked out because there is a storm. Then there was the time it took to recharge. We all know, and it has been reported quite widely, that it took so long to get things going because we did not have the base load power in the system to fire the system back up again after the weather event. It is really a great shame that, when you travel the state and travel the nation and you speak to people, they say, 'Why can't the powers that be—the state Labor government—keep the lights on in South Australia?' It falls very heavily and squarely with the Premier and the energy minister, who is also the Treasurer, or, as they are often known, the blackout Treasurer and the blackout Premier, and it is a real disappointment.

The figures showing the rise in power prices are astronomical for business. It is really hard for businesses to survive when they are paying those sorts of prices, and that results in jobs coming out of South Australia. We know South Australia, again on trend, has the highest unemployment rate in the nation and has done for 23 of the last 24 months. We are sitting at the bottom of the table. We are cellar dwellers in that area, and that is often raised with me when I am out talking to people.

Youth unemployment is another incredibly high figure for South Australia, and the latest for youth unemployment in South Australia is 16.9 per cent, which is just astronomical. For underemployment, we are also the highest on the mainland, at 9.8 per cent, and underutilisation is 16.7 per cent, which is again the highest on the mainland, which is a real disappointment and an alarming problem.

I spoke about Alinta. When you go back even further, this state government was warned in 2005 by ESCOSA that, if it went beyond 20 per cent of renewable energy, the grid would suffer. The state government was warned again in 2010 by ESCOSA about the same situation, that if they went above 20 per cent of renewable energy, the grid would suffer. It is about getting the balance right. Of course we want more renewable energy, we want to move in that direction, but it is about the rate at which we move, and this government has gone too fast, got the balance wrong and South Australian businesses and families are suffering as a result.

This state government has a renewable energy target of 50 per cent. Federally, it is 23 per cent, but the state government is pushing ahead with a bigger renewable energy target—a target we do not think is right and good for South Australians, South Australian businesses and, as a result, South Australian jobs. They were warned in 2005 and warned again in 2010, but the state government decided that they would just keep going on regardless. They would do this to the detriment of South Australians and, as a result, South Australians would suffer, from small households, as we said, to large employers.

This government just pushed ahead anyway with its renewable energy target of 50 per cent. Despite the warnings, that is what they did, and as a result, after being warned in 2005 and 2010, here we are in 2016 and 2017 seeing constant blackouts, and South Australians are feeling it as a result. That is the real underlying current of this issue. The Treasurer wants to spin it any which way in this place and, boy oh boy, does he try. I think, if you could harness some of the wind that comes out of his mouth when he is spinning this away, there would probably be some energy that could help with the problem.

The fact of the matter is this is the situation we are in, and we are in this situation because of the policy, after 15 years of a state Labor government that has got the mix wrong, and as a result South Australians are suffering. I have talked in this place before about the premiership table and where South Australia sits. Again, because of this state Labor government, we sit at the bottom.

The Hon. P. CAICA (Colton) (15:48): Deputy Speaker, you may well remember cracker night because I think you are around a very similar age to me.

The DEPUTY SPEAKER: I was born on Guy Fawkes Day, so I know exactly what cracker night is.

The Hon. P. CAICA: There you go—you know Guy Fawkes Day and you know cracker night. If you were anything like me, you would have bought what they used to call threepenny bombs. I am sure what the opposition leader was hoping today when he came in to introduce this particular debate was that he would go off like a threepenny bomb. The reality of the situation is you know those other little ones that are either called squibs or duds—those ones that do not go off—and that is more like the performance that we saw today.

I can say this to you, Deputy Speaker, and I know you might rule me out of order. I have been here for 15 years, and it will be 16 years by the time of the next election. I would say that, without doubt, this is the weakest opposition I have seen in my time here—there is no doubt about it.

Members interjecting:

The DEPUTY SPEAKER: If the interjections could stop, you might hear me asking the member for Colton to come back to the nub of the debate.

The Hon. P. CAICA: One thing is for certain: you may well say that—

Mr Marshall: We'll let him go; he's having fun.

The DEPUTY SPEAKER: You are enjoying it.

The Hon. P. CAICA: I was slotted? But the reality is that the opposition never laid a glove on me in that time and you have yet to lay a glove on any one of the—

Members interjecting:

The Hon. P. CAICA: Well, seven years is long enough, and I hope one day you become one. I find that very doubtful because I do know about the lack of talent there should they ever get into government. Anyway, I think it is one of the most pathetic oppositions that I have seen in my time here.

I often hold street corner meetings, like we all do. I held one last week—the week before last, four; and the week before that, two—in the lovely suburb of Lockleys, in the electorate of Colton. One of the issues raised there was the reliability of power, the cost of power and, just as importantly the shedding. We had a good conversation with the people who were there. Fortunately, we had a person—Paul Roberts is his name—

An honourable member: Paul?

The Hon. P. CAICA: Not the Paul Roberts who is with Power Networks, another Paul Roberts (Polly). He was very useful because he was able to explain, from his perspective of working on Torrens Island, where he had worked for 30 years, some of the difficulties associated with the system we have in place. What we need to understand, and the point was made very well by both the Minister for Energy and the Premier, is that we have a system that is not working at the national level. It is broken and it needs to be fixed.

I also explained to them that the shedding that we had that night never had to happen. It never had to happen. Indeed, not only did it not have to happen, but some person decided they were going to shed more than they originally thought they needed to do. So, it is an issue out there. What I would also like to say is that what is not striking a chord with the people who are in my electorate in particular—and I presume that the people of my electorate are no different from people in other electorates—is that it is not, in their view, and they do not believe that it is, renewable energy that is causing the problem. In fact, they support renewable energy.

They want to see a day when all our electricity is guided by a system that has within it certain componentry that provides different forms of renewable energy. Storage is one of them.

An honourable member: Transition, Paul.

The Hon. P. CAICA: You talk about transition. I think your trouble, if you ever do get into government, is you making the transition to government from opposition. That is the transition you should be mostly worried about.

An honourable member: We look forward to the challenge, Paul.

The Hon. P. CAICA: It will be a challenge for you, that's for sure.

An honourable member: We look forward to it.

The Hon. P. CAICA: It will be a challenge, yes, and whether you are up to it or not, time will tell.

The Hon. J.M. Rankine interjecting:

The Hon. P. CAICA: Yes, that's right. That's where you deserve to be. If we look at the Prime Minister, for example, I do not want to be too horrible, but he is a hollow man. That is what he is: he has become a hollow man. He is a captive of people within his party and he is succumbing to their views, even though he does not believe in them, purely for reasons of survival.

Even my wife said, 'I could vote for this bloke.' I said, 'No, you couldn't, darling. He's not in the right party.' But she and others were attracted to him because they saw him as a breath of fresh air, someone who was holding up high policies on renewable energy, policies on a whole host of issues that were indeed sound, sound enough for my wife and others to say, 'I could vote for this bloke.' But he has let the people of Australia down. He is a hollow man, and it appears that he is not going to take us anywhere. Indeed, the Leader of the Opposition is falling right behind a Prime Minister who is a hollow man and is certainly not the person people thought he was. Either he did not believe in those things in the first place, or he has just changed his view for base political reasons.

I was not in parliament at the time of the privatisation and the sale, but I know that the member for Wright was at the time when we were in opposition and I know that you were, too, Deputy Speaker.

Mr Gardner: So was the member for Waite.

The Hon. P. CAICA: In fact, the member for Waite was the person we feared most of all when he was leading the opposition. He was actually in charge of what was the best opposition we have had over the last 15 years. You interjected, 'If you lead with your chin and you are going to get it back at you.' The member for Wright was here and the Deputy Speaker was here—

The Hon. J.M. Rankine interjecting:

The Hon. P. CAICA: Yes, and you would recall the press releases that were issued by the Leader of the Opposition, Mike Rann, at that stage. Those press releases serve as a reminder of what was going to happen.

Members interjecting:

The DEPUTY SPEAKER: When members would like me to enforce the standing orders, do let me know, but if you continue to interject and respond to interjections it is going to be a very long afternoon.

The Hon. P. CAICA: The outcome of privatisation was well detailed in those press releases. Lo and behold, that is where we find ourselves today—exactly where, when we were in opposition, we said we would be through the privatisation of ETSA in South Australia. I know that my friend the member for Giles, a very good-looking man—

The Hon. T.R. Kenyon: You have a similar hairstyle.

The Hon. P. CAICA: That's right. He forgot to seek leave to continue his remarks, so I am going to touch on a couple of issues that he wished to raise. In contrast to the opposition, these are the alternatives that need to be considered. This is what we can do, from South Australia's perspective, to be of assistance in fixing the mess that is the National Electricity Market.

The first thing in and around the Whyalla area is the possible hydro proposals that are being looked at, which would use sea water. Of course, that is just one component of renewable energy that could assist in making sure that our electricity is more reliable than it previously was. I understand that ARENA is going to fund that study. It is in its early days, but it is a serious study and it is something that I, along with the member for Giles, warmly welcome.

He also wanted to acknowledge the work done by former BHP senior engineer John Scott, who has lobbied many people about the potential for marine-based pumped hydro in the range of hills that run parallel to the coast between Whyalla and Port Augusta. The point I am trying to make is that we on this side will continue to support alternatives with respect to reliable energy so we do get that mix of renewable, reliable energy because of the breadth of the initiatives that will exist, that is, those energy technologies that will exist.

We have talked about power prices. I was what was called a legacy customer with AGL and I think to a great extent AGL took advantage of me. I was too lazy to shop around. I came home one day and my wife, Annabel, said, 'You better talk to this bloke.' He was a young fellow and he was working for a company.

Mr Whetstone: Power prices too high?

The Hon. P. CAICA: No. I think I am getting a very, very good deal. I hear people talk about the cost of electricity, and in reality I am getting the cheapest bills I have had for over seven or eight years because I have shopped around. AGL took advantage of me and I was paying way too much. The only time I ever heard from them was when they were required to come back and talk to you when you change over. So, I told the bloke, 'No, nick off. You're only ringing me up now because you want me to stay and I am not going to.'

So, if you do shop around—and I know it might seem like a pretty pithy point, but it is not—you can get a much better price than is offered by some other providers. I am going to finish off there. All I want to say is that I wish that the opposition would show some leadership and come up with some alternative ideas, instead of being the carping, bagging mob that they are.

Mr WHETSTONE (Chaffey) (15:58): I rise to support the motion put by the Leader of the Opposition, the member for Dunstan. I think it is one of the most important private members' motions that has been put to this parliament all year. Even though the year is only but a pup, we are dealing with one of the biggest issues in South Australia. The issue is affordable, reliable power in South Australia and how we address it.

For far too long we have heard the blame game from a lazy government. I listened to the member for Colton talk about a lazy opposition. Well, goodness me, the government has been in power for 15 years and what are we seeing now? We are seeing arrogance, a blame game and the responsibility shifted onto someone else. A famous musician Joe Strummer once said:

When you blame yourself, you learn from it. If you blame someone else, you don't learn nothing, cause hey, it's not your fault, it's his fault, over there.

This pretty much started two years ago, when large power consumers came to me and every MP in this place to protest against the cost of power and the cost of doing business in this state. Sadly, the shift has gone only to power. It has come down to not only the cost of power but also the issue of reliability. We have now become South Australia, the Genset capital of the globe. We are now seeing adverts in the media—on radio, on TV and in the papers—about backup generators for businesses and homes. If you cannot afford to buy a generator, maybe you should go out and buy bulk candles because that is one way of keeping the lights on in South Australia.

I do not want to talk about the blame game, and I do not want to talk about the state government using every excuse under the sun and that it is everyone else's fault and not theirs. However, I want to talk about something that is dear to my heart, and that is the far-reaching impact of both power reliability and cost in South Australia. It goes to the heart of what it is all about.

South Australia's manufacturing and agriculture sectors, all our industry and economy, were based on affordable and reliable power. It was built around affordable and reliable power to invest, to draw investment into South Australia. While we are trying to bring investment into South Australia, and while we are trying to grow confidence in already existing businesses, all of a sudden the primary South Australian business advocate, Business SA, has done a blackout survey about the cost and impact on South Australian businesses. The $367 million is a blight on investment and confidence in South Australia.

It is all about how we can grow our businesses, how we can grow our economy and how we can look at exports. The telltale is in today's ABS statistics, which show merchandise has now free-fallen to $10.5 billion from $11.5 billion in 2015-16. The minister's target was $18 billion by 2017. Well, the last time I looked it was 2017. That revised figure of $18 billion was another revised figure. It is beyond belief that a lazy, consumed and arrogant government continues to revise their figures. They are not revising their figures up; they are revising all their figures down. The Australian Industry Group chief, Innes Willox, said:

...SA’s current energy crisis has many causes, but the closure at Port Augusta has helped set the scene.

'The loss of that generation capacity raises the likelihood that shortfalls in the interconnector or renewable generation send prices soaring,'...

That is called the futures, which is about how we set that price and about the scare mechanism in our market. When Port Augusta closed, it sent out a wideranging forecast of fear within the energy supply in South Australia. Willox continues:

'But most of all, the closure happened so fast that the market had little time to prepare or adjust. It’s a clear marker of the danger of disorderly transitions.'

I think that is what we need to focus on. It is not that the South Australian opposition backs coal. We back renewable, clean energy, but we also back a transition into those renewables. We back a progressive transition, not just this step change. We all know that no-one likes step change—no-one. Whether it is the price of food or day-to-day living, no-one likes to be hit over the head with change, and that is what happened in the power market in South Australia.

Yes, ETSA was sold in the late nineties. We continually hear the government carping on about the sale of ETSA. That was 20 years ago. You guys have been in power for 15 years and nothing has changed. What has changed, other than the blame game? Nothing, not a thing. We continually hear about the blame game. No-one is putting solutions on the table and no-one in the government is putting forward policy settings to the people of South Australia—no-one.

We continually hear, 'Where are your policy settings?' Well, hang on a minute. We are in opposition: you are the government. What are you doing to lead the state to greater prosperity. What are you doing to lead South Australia to be the great state it was before 2002? What are you doing about getting South Australia's exports back up to the 7.4 per cent national footprint that we had? Today we hit a 6-year low—4.08 per cent of the nation's exports. That is an absolute disgrace.

We hear the member for Colton talking about the shining star, the new trade minister, saying that he is the guy they most feared. On his watch, we are seeing exports fall to a low. This is an absolute disgrace. As a proud South Australian, as an exporter for 25 years, I watched our exports grow. I came into this place to make a difference and I am watching exports disappear. They are going south: they are not going north. No-one over there has any solutions.

You have your star minister. They are taking myriads of businesses over to all our export destinations. Well, what is happening? Where are our export figures? Here he is. Come in. Join the conversation, minister. Come and show your credentials. Tell us about the latest ABS statistics. Tell us about business confidence in South Australia. Tell us about the energy crisis in South Australia. I am sure you have a solution for it. Just get into the conversation and be a part of it.

To date, what we have seen from you is a criticism of a party you once led. The best thing that ever happened to this party was that you walked away. That was the best thing that happened to this party. We do not have party room leaks. We do not have disgruntled members of our team.

Members interjecting:

The DEPUTY SPEAKER: Order!

The Hon. M.L.J. HAMILTON-SMITH: Point of order: I ask the member to address his remarks to the Chair, perhaps.

The DEPUTY SPEAKER: Yes, and perhaps to the motion before us would be useful.

Mr WHETSTONE: Thank you for your protection, Deputy Speaker—

The DEPUTY SPEAKER: That is a really broad interpretation of what just happened.

Mr WHETSTONE: —but one thing that is really getting under every South Australian's skin is the blame game. It is about the solutions that we are not seeing.

The Hon. M.L.J. Hamilton-Smith interjecting:

Mr WHETSTONE: The blame game.

The Hon. M.L.J. Hamilton-Smith interjecting:

Mr WHETSTONE: No, I am putting facts on the table. What we are trying to do is talk about driving the South Australian economy, building business confidence, putting that confidence in place so that we can grow our economy. The ABS numbers do not lie. Today, we have seen another example of where our trade figures are going. Our merchandise numbers are heading south and all we hear is, 'Let's talk positive because that's going to fix it.' Let me tell you, business confidence in South Australia is at a low.

If you want to talk about business confidence, let's talk about the businesses that are actually driving our economy, such as the Central Irrigation Trust. Their power costs have gone from $1.3 million to over $5 million in seven years. Let's talk about the barriers to making South Australia competitive. The almond industry is one of the shining lights in South Australia's economy, yet Almondco, a great Riverland business, has just invested $25 million in New South Wales. Why? Because the power to run a hulling plant is too expensive in South Australia.

Why are all our wineries complaining about the cost of power? Why is Kingston Estate Wines investing over $1 million in diesel-powered generators? They are investing money in generators instead of investing money in growing their business and making their business a better South Australian exporter. The power issue in South Australia needs to be addressed but with good policy settings.

Time expired.

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Small Business, Minister for Defence Industries, Minister for Veterans' Affairs) (16:08): I am delighted to respond and I hope the member remains in the chamber. I am a little disappointed with the contribution of the member for Chaffey. I predict that the member for Chaffey will struggle against the Xenophon candidate to hold his seat at the next election for a host of reasons. He demonstrates, in what is supposed to be an energy debate, a lack of understanding of both the energy market and the very basics of trade and investment in this state. Because the two are connected and because the member has used a bit of licence and gone into trade rather than energy in his debate, I will ask for the same licence.

The reason that South Australia's share of exports is not as great today as it was 10 years ago, I say to the member for Chaffey, is that there was a little thing called the mining boom. To give you an example, in Western Australia exports rose from 2002, from around $20 billion a year to nearly $100 billion a year on the back of the mining boom. During the same period, ours have risen from around a little over $9 billion a year to around $15½ billion a year, so they have gone up by 500 per cent and we have gone up by about 50 per cent. This is grade 7 arithmetic.

When Western Australia, Queensland and New South Wales go up like that and we only go up like that, and our share of the national cake appears to have declined and we do not have oil, gas, coal and quantities of iron on the massive scale seen in other states, of course there is a difference. He quotes statistics without understanding them. You have to analyse what the statistics are telling you. No matter how hard you try, you will never have mountains of coal in South Australia. You will never have the multibillion-dollar investment opportunities of WA, Gorgon and what is going on in the Northern Territory. These are monumental scale infrastructure enterprises based around resources. We just do not have that.

It is ignorant to try to compare the two and look at the statistics and try to make the case the member tries to make that somehow the government is not working hard enough to help lift our exports because we have not enjoyed the mining boom. It just demonstrates how unprepared the members opposite are for government. You have to look at the things you can influence as a government, and we cannot influence commodities on a massive scale. We can influence wine, food, education and services. There are SME sectors and we can help them, and we have been helping them. They are overwhelmingly happy with what we are doing. They keep complimenting what we are doing.

I just point out to the member that what we have implemented is the very policy I took to the last election when I was on the other side of the bench. I have done exactly what you would have done, and I have done that because if things had worked out better, and those opposite were able to run a competent campaign and did not have a leader who got up and told everyone to vote Labor and had come out with the resources policy that I had written and given to them months before but did not run because they were afraid of what the Greens might say about it, and if they had just demonstrated a little bit of discipline, a little bit of organisation and a little bit of competent campaign management, I might very well be over there doing exactly what we have done now.

But do you know what? I lasted 14 years—14 years I will never get back—with an incompetent group of people. I even tried to fix it. This is the party that was divided in the seventies and that stabbed Dean Brown in the back before I was even there. If you want to talk about leaking in the Liberal Party, go back and look at what they did to Dean Brown. I was not even there then. I came in and had to witness the counterattack when the moderates decided to destroy the premiership of John Olsen, and it was unbelievable to watch. I sat there silently in gobsmacked awe.

I had come in from a disciplined career of 24 years in the Army. I remember my first party room meeting—it was like Syria. I thought I had made a serious mistake going into state politics. I could not believe the behaviour of the people in the room, that is how bad it was, and it was that bad for the whole 15 years I was there.

Mr Whetstone: I saw you in action.

The Hon. M.L.J. HAMILTON-SMITH: Did you?

Mr Whetstone: Yes, I did.

The Hon. M.L.J. HAMILTON-SMITH: Did you? When I was the opposition leader, we actually got our primary vote up from 29, the lowest it had ever been since World War II, to fifty-fifty. If you want to look at someone in action, when I was the leader we decided to move football into the city. We actually came up with policy ideas. We engaged in the battle of ideas, member for Chaffey. What are you doing now? You are going out and telling everyone to vote for the other side. What you do now is wok-in-a-box economics. What you do now is come in here and try to spin arguments about what is wrong with trade investment—

Mr Whetstone interjecting:

The DEPUTY SPEAKER: Member for Chaffey!

The Hon. M.L.J. HAMILTON-SMITH: —without even understanding the facts.

Mr Whetstone interjecting:

The DEPUTY SPEAKER: Member for Chaffey, you are on two warnings. No, you are not: you can have another one.

The Hon. M.L.J. HAMILTON-SMITH: But let me get to the nub of the issue with energy. Let me get back onto the subject we are here to debate because I could repartee with the member for Chaffey, but it is a little bit like the boat trip on One Flew Over the Cuckoo's Nest—you will not get much sense out of it.

What we are here to discuss is energy. Again, let me point out to members opposite that they need to understand the market here. The world has changed. We are not living in the Dark Ages anymore, whether the opposition like it or not. The world is moving on to a cleaner world where renewables, not brown and black coal, will dominate energy generation. It is an inevitable process. It is global. The vast majority of Australians are signed up to it. They understand the need for it. They do not want to kill the planet with what remains of our carbon fossil fuel sources and walk away from renewables—they just do not.

The momentum is unassailable. What the energy market needs to do is respond to that change. Yes, there will be a place for coal in the world for a long period to come, particularly in large countries like China and India, and also probably in Australia, but its days are numbered. That is why people will not invest in coal. They see no future in it. They know that a future government is more than likely to sway to the momentum, the inevitable momentum, of global movements towards renewables. We need a market that has a set of rules which recognises renewables are now part of the mix and which is able to adjust.

We have a 21^st century energy generation mixed with a 20^th century management system. We need to fix the rules. We need to build the transmission lines that were sold. I just want to say that I was with members opposite when we decided to sell ETSA, and I supported that decision. I think at that time it was the right thing to do, but we were told two things: firstly, that a regulatory regime would be put in place to ensure that the market competition and the rules provided for no unreasonable increase in prices for punters and, secondly, that a transmission line, called Riverlink, would be built into New South Wales to ensure interconnectivity. They were the guarantees we were given.

Of course, neither of those two things has happened: we do not have a satisfactory regulatory regime, and we do not have the promised transmission line. I am saddened by that because I think that what was fundamentally the right decision was messed up by the failure to deliver those two things: a proper regulatory regime and a transmission line to New South Wales. We were told at the time that would happen; it was later changed, and I am very disappointed about that. We need to fix the system. There needs to be new generation and there needs to be a new set of rules. We need new generation and more competition in the Australian market.

The answer is not to rip down wind turbines, tear up solar and start building brown coal burning power stations all around the country—that is not the answer. Technology is transforming the sector. Consumers are driving change. We need to change the market to reflect that. We need more interconnection. Technical standards and markets need to be improved. Gas is the transitional fuel, yet we are exporting our gas in liquefied form instead of keeping gas for our own use one way or the other. We should have cheap gas—we do not.

We are a major gas exporter. We have the market wrong. There needs to be greater competition and firmer market power, innovation and better governance, and until we get those things we will not have an answer. Sadly, those opposite, instead of wanting to contribute solid solutions, simply want to criticise. The solutions I have heard in the debate today have been poor. What would you do? What I have heard will not work. Let's have a battle of ideas instead of a battle of insults and we might get somewhere.

Ms HILDYARD (Reynell) (16:18): I rise today to speak on this motion and also to defend our government's proud record on energy generally, on renewable energy and on ensuring the sustainable future of energy networks within the constraints of a privatised power system, constraints continuously and relentlessly defended by those opposite. For 17 years, I had the great privilege of representing workers in the energy industry, highly skilled, technical workers with the knowledge and expertise to run South Australia's energy network. These workers worked originally at ETSA and then in power stations, at SA Power Networks, at ElectraNet, at AGL and at many other organisations engaged in many different professions.

I remember when our South Australian electricity trust was privatised by those opposite, and I absolutely know the difficulties that these workers, who were subsequently engaged by different companies from around the world, have faced. These workers have continued to provide extraordinarily high-quality service to South Australians but were forced by those opposite into doing so in an environment which increasingly had sections of its workforce contracted out, where bargaining across the industry for decent wages and conditions became fragmented and more difficult, and where they were forced into being at the front line of dealing with the South Australian community's anger at the privatisation of one of our state's best assets.

In every one of our debates in this place, these facts are something that those opposite have continued to ignore, have continued to pretend did not happen. These workers know, and South Australians know, what the selling off of ETSA meant to our energy prices and what it continues to mean. I encourage those opposite to talk with these workers. They are absolute experts on the energy market and I think that they could provide some excellent information to them.

Our government is committed to ensuring South Australia's clean green energy future, and we have announced a series of comprehensive policies that will take us towards that future. I am proud, as I know all on this side of the chamber are, that in 2014 our government set a renewable energy target of 50 per cent by 2025. We have already been considered leaders in the nation and the world for this commitment, with a network consisting of more than 40 per cent renewables.

Renewable energy is the only future for energy in this country and, indeed, the world. Those who do not believe this are climate change deniers and do not understand that there is a much greater threat, that of climate change, that we must be concerned about. Renewables are safe. They are reliable and they are efficient. They are our future. They are what will keep our planet safe for future generations of South Australians.

Additionally, every renewable project in South Australia has been underwritten by federal Liberal government subsidy through its Renewable Energy Certificate program. This has bipartisan approval. Yet, from this opposition, with our current challenges and as we further shape a plan for our future, all we hear is negativity. This ongoing negativity is an interesting tenet from the very same people who privatised ETSA, who sold one of the South Australian people's best assets. Their cronies in Canberra now do not have solutions either, only finger-pointing and absurdity. As our Premier said last month:

South Australians are not prepared to put up with being ridiculed and having the finger pointed at them by a federal government that has absolutely abdicated its responsibilities.

The opposition, as we have heard all day, have little grasp on the realities of energy generation. They are far too focused on blaming others than developing policy. They are anti renewables, they are negative about our energy future, they are negative about our state and they are incapable of understanding the complexities of our system.

They have no plan for the future. That, to quote the member for Chaffey's words, is indeed 'a disgrace'. The Leader of the Opposition has announced a ban on gas fracking and now they are planning to scrap the state's renewable energy target. In this day and age, this is also a disgrace. I am no longer sure of what their position on nuclear power is. I think it depends on which of those opposite you speak with. The opposition must stand up to Canberra, to Mr Turnbull and the rest of the climate change deniers who now make up our federal government. They must join us in pursuing a positive plan for our energy future, and I invite them all to do just that.

Mr GARDNER (Morialta) (16:23): I am very pleased to speak in favour of the Leader of the Opposition's motion, which is a very important motion. The motion, I should remind members, is that this house expresses its concern at the state of the South Australian electricity market. I hear from the government accusations that the opposition has been relentlessly negative in this debate, but I think it is entirely reasonable for the opposition to express its concern at the state of the South Australian electricity market.

Anyone over the last four months who is a member of parliament who has been circulating in their community and who has not been getting feedback from members of their community expressing concern at the state of electricity in South Australia has not been listening to people in the community. Over the summer break, almost every conversation I had with a constituent at an event or walking down the street or going to a supermarket or in between Christmas and new year just being at the shops tended to start with questions about what we are going to do about the state of the South Australian electricity market.

If, as I suspect, the government vote against this motion in the next hour or so, then I remind members of the government that they are putting their names against a motion that is moving that this house expresses its concern at the state of the South Australian electricity market. Members of the government who vote against this motion are voting against a motion that notes the following:

(a) the state government's energy policy over the last 15 years has delivered South Australian consumers the worst outcomes in the nation;

By voting against this motion, I assume government members are therefore suggesting that they think we do not have the worst outcomes in the nation, yet when our prices are the highest and our reliability is the lowest, it is just fanciful to suggest that the first point of this motion is not entirely reasonable and correct. The second part of this motion notes:

(b) the first ever statewide electricity blackout in Australia occurred in South Australia on 28 September 2016;

I have heard a lot of accusations of fake news this week from the Treasurer and others in the government, but I am fairly sure that even they would have to admit that that point is true. The motion goes on to identify that this house should note its concern that:

(c) electricity supply reliability in South Australia is the lowest in the nation;

(d) electricity prices in South Australia are the highest in the nation;

These are just plain facts. The motion goes on to identify that we express our concern at:

(e) the impact that high household electricity prices add to cost of living pressures;

I am concerned about that, and my constituents are concerned about that. My constituents facing those increased cost of living pressures, based on having the highest electricity prices in the nation, are concerned about that. I invite government members to identify if they are not concerned that their households are facing those high electricity prices. The motion goes on to identify that we should be concerned about:

(f) the impact that high business electricity prices add to unemployment pressures;

When I first ran for the parliament at the 2010 election, the state government—the Labor Party—had a policy, a promise, that they would deliver 100,000 new jobs by 2016. We are now past 2016 and the jobs they promised they would deliver by then are nowhere to be seen. The unemployment rate over that period has continued to scrape along the bottom of the national barrel, and businesses in South Australia are facing the highest electricity prices in the land.

We hear example after example of businesses in South Australia identifying that the cost of electricity is what is causing them to doubt their future here in South Australia. It is causing them to doubt that there is any opportunity for expansion or investment here in South Australia. For members of the government to argue against a motion that says we should be concerned about the impact that high business electricity prices add to unemployment pressures only identifies to me that these people who stand against this motion are not fit anymore to be the government, if they ever were. The motion goes on to identify:

(g) unemployment in South Australia is the highest in the nation;

I know over the period of time it has been. It certainly was when notice was given of this motion, but even when we have not been the highest we have been the second highest. That goes back and forth, but we are consistently the highest in the nation, and we have been getting worse and worse over the years. The motion goes on to identify:

(h) both the Victorian and South Australian electricity markets were privatised at similar times and yet Victorians pay the lowest electricity prices in the nation;

Again, these are just bald statements of fact, and we are noting that we are concerned about these facts. Finally, the motion closes by stating that this house expresses its concern and notes:

(i) the closure of the coal-fired electricity generator at Port Augusta has led to the increased importation of coal-fired electricity from Victoria.

In reading this motion, I identify those individual points and invite government members who are still to speak to explain exactly which of those points they are voting against. Are they saying they are not concerned that the cost of living facing South Australian households is unacceptable? Are they voting against this motion because they do not consider that it is something to be of concern that our electricity supply is not reliable?

Are members of the government considering voting against this motion doing so because they are arguing that there was not a statewide electricity blackout on 28 September 2016? It baffles me, yet the member for Reynell and other government members accuse us, the opposition, of just being relentlessly negative. It is an extraordinary piece of sophistry for the government to argue that the opposition is being negative for expressing the concerns—the entirely reasonable concerns—of members of our community. We need to be focused on how we can make the lives of the people in our communities and the people in South Australia better.

The environmental future of the nation and of the world is beyond dispute important. The fact that renewable energy is going to play a key and critical role in that future is not disputed. The transition point between the electricity generating capacity that we have at the moment and have had in the past, and how we get to a carbon-free future, is the key question of the concern. But it is not of concern, it seems, to the government because they have expressed no interest in dealing with that transition.

In fact, the debate today has been an appalling example of just pure partisanship and political advantage brought out by the government who seem to be identifying this motion in ways that it is not. By voting against it, they are demonstrating that they are only interested in political outcomes and have absolutely no interest whatsoever in the best interests of their communities.

We need to be focused on the reliability of our electricity supply because the people in our communities expect it, deserve it, demand it, and they have every reasonable expectation that we in government and we in the parliament are going to deliver it. This is a 21^st century First World nation, and a state that should be proud and able to offer perfectly reasonable services to our community.

People should not be worried about whether their embryos are going to be safe at the Flinders Medical Centre. People should have absolutely no stress about whether medical equipment in their hospitals and in their homes, potentially, are going to be sound. People should not be stressed about food going off in their fridge because the power is going out due to unseasonably warm weather in the summer when the wind is not blowing. This is not something that is reasonable for our communities to be putting up with. It is completely unacceptable and we should not accept.

Energy reliability is important, and that is what this motion identifies. That is what the Leader of the Opposition has been saying. The Leader of the Opposition has identified that no solution should be taken off the table to ensure that energy reliability is our first demand. Energy affordability is equally a very important matter. That is what the rest of this motion identifies: the impact that higher household electricity prices are having on our communities, the impact that higher power prices are having on our businesses, on our economy, and on employment and jobs for our future. These are entirely reasonable concerns for the opposition to put forward in the parliament—and the government calls us negative. It is an extraordinary state of affairs that they would do so.

The transition from the types of electricity generators that we have been using for many years to those that are going to be more prevalent in the future is a challenge. Nobody is saying it is not a challenge, but this government has vacated the field on even trying to have a challenge because they are interested in a political argument and rhetorical debate.

I was a candidate in that 2010 election when Mike Rann (who was then the Premier) used this as his central point, being so proud that his government had driven the increase in renewable energy in wind and solar to being the highest in the nation—he took credit for it. So it is entirely disingenuous now for the government—the Treasurer, as he so often does—to say, 'Oh no, that's all Canberra's fault. It's the federal Liberal government that's doing that.' This is the government that has been claiming credit for that for 10 years, right up until the point where the lights started turning off. They cannot have it both ways.

The member for Reynell and others cannot say that the opposition, the Liberal Party, are negative and climate deniers, while at the same time the Treasurer is blaming Canberra for the renewable energy schemes that are going national. We need a national scheme, but having a state scheme is entirely counterproductive and negative. The motion that we are talking about today is entirely reasonable, and I urge all members to vote for it.

Ms COOK (Fisher) (16:33): I rise today to vehemently oppose the motion moved by the opposition leader because it is not my wish to rob our children of a cleaner future. In late September, South Australia saw freakish, never before seen cyclonic storms, we saw tornadoes tear 23 transmission towers from the earth and we also saw outages on 27 December as a consequence of winds which recorded speeds of over 110 km/h, with falling trees bringing down 350 powerlines. These events make it almost seem that the climate in South Australia is changing.

We have been hearing a lot about climate change, so maybe as a reminder to members present we may just want a quick recap on what it actually is. The international scientific community accepts that increases in greenhouse gases due to human activity have been the dominant cause of observed global warming and climatic change since the mid-20^th century. Continued emissions of greenhouse gases will cause further warming and changes in all components of the climate system.

South Australia has seen these unusual, never before seen climate events happening, and what do we see from the opposition? They say we need more coal, more greenhouse gases, more unseasonal and unforeseen weather events. The opposition leader has called for the Northern coal power station to be put back online, pumping more greenhouse gases into the atmosphere, bringing about more extreme weather events and making the planet more uninhabitable for our children.

So, when AEMO handed down their report that put storm damage for both of these blackouts down to extreme never before seen storm events, did the Liberals back down on their attacks on renewable energy? No. When asked what he wants to do with the state's renewable energy target, his only answer is to hand it over to the federal government, which has the most dysfunctional environment and energy policy of any federal government.

We have a Prime Minister who supports a price on carbon, and then he does not, and whose only policy now is to bury his head in the sand and hope that it goes away. But is that the position of the rest of the federal Liberal Party? No, I do not believe that. They have a Treasurer who is obsessed with coal, openly brandishing it in parliament and extolling its virtues. If the Leader of the Opposition had his way, these are the people he would turn our energy policy over to. He thinks they are the best people to handle our energy policies, the right wing of the federal Liberal Party. It is unable to see eye to eye with anything related to energy with the party's far right wing.

In Western Australia, leading up to the election, they are also currently partnering with our friends in One Nation. They are not supporters of climate change fact. Thankfully, the state government can see through them and quite rightly sees that this federal government is not fit to set South Australia's energy policy. We wholeheartedly stand by the renewable energy target, which ensures that South Australia is playing its role in trying to prevent global apocalyptic climate change.

We would very much like to see the federal government break its internal impasse, do something to benefit the country and have some coherent vision for Australia's energy future, but it does not. Whilst the federal government occupies its time dealing with splitters and unhappy former leaders, we are unable to foresee a time when they will be ready to pick up the mantle and lead on climate change.

On 8 February, we saw AEMO decide to engage in power shedding across Australia whilst Adelaide blistered in 41° heat. Unable to see that a hot day might increase the demand for electricity, they made incorrect calculations on what power sources needed to be running on the day. South Australia had extra capacity to produce energy, but the market operator decided to stand up for the profits of the privatised electricity generators and not for the energy security of South Australia.

The South Australian Labor Party opposed electricity privatisation and we are now paying the price of the short-term decision-making of that previous government. The private market simply cannot deliver on the energy security required and expected for South Australians. I look forward to hearing the state government's proposed interventions into the electricity market to take back control of the state's power supply and security and unpick the damage of privatisation.

The market is just not delivering for South Australians. South Australians have faced significant trials recently with energy security. We cannot turn our back on renewables—because they are the only tool we have to deliver the energy needed without exacerbating the issue of energy supply with more extreme climate events.

Mr GEE (Napier) (16:38): I rise to oppose the motion. I became involved in the energy debate early in 2000 when the organisation that employed me decided to look at the science of climate change at the time. It was a difficult time because so many of the people we represented worked in those industries that contribute towards global warming. We examined what the future would look like, what had to change and what would happen if change was not embraced. Fortunately, over a couple of years of engaging the membership of around 200,000 people, the science was overwhelming.

Policies were made to campaign at local, national and international levels to see governments and progressive movements become climate activists. South Australia is at the forefront of the challenge, along with Tasmania. It looks like we need to challenge those states that have their heads in the sand when it comes to renewables. Those opposite really have to abandon their love of coal. It will be the death of them and the rest of our planet. They are not listening to the community. The community will choose life and a long future. The future is not coal.

One of the concerns that we looked at 20 years ago was at what stage humanity would need to start living below the ground. It sounds dramatic, but had the international community not adapted strict reductions in carbon emissions this would be a reality. The relentless use of our fossil fuels is happening at a rate never seen before. The release of carbon into the atmosphere is causing our oceans to heat at a rate that will be catastrophic for all sea life. All sea life can really exist in only a very small range of temperatures within the ocean.

In terms of the way the oceans are heating now, we see examples in the Arctic, where massive shelves, tens of thousands of kilometres long and 20 to 30 kilometres inland, are now breaking away from the main ice and slipping into the sea. With oceans warming, the prediction is—and I hope this never happens—that, if that shelf ends up in the sea and melts, ocean levels would cover Mount Lofty; there would be no life left. When we talk about global warming, we do not talk about how hot it is outside, that we have had too many hot days; we talk about how much carbon is in the air and how it is heating the ocean.

One of the really important things is how many resources we use as humanity. Instead of using fewer or using them smarter, which is brought about by the use of renewables, we are using more than ever before. The targets were set up for around 2050, which is around the date that we thought we would have to start living more and more underground. Coober Pedy is a good example of that, which has been the case for a long time. It is happening at such a rapid pace that—I hate to say this—if we were to reduce the population of the world by 50 per cent now, we would probably make those targets. That is how far behind I think we are in terms of surviving climate change.

It is a much bigger issue than the problems expressed by those opposite in terms of people experiencing blackouts and not having reliable power. Our government is looking at having a grid that is modern and clean and can deliver a future, a long future, of sustainable energy in this state. We need other states to buy into that. We need a federal government that will buy into that. We need an opposition that wants to work towards that goal. I cannot understand an opposition that wants to get into power and then reintroduce fossil fuel. What I say to the opposition is: wake up. If you want to be re-elected at some point in the future, you need to get on board with what the community really wants.

The Hon. T.R. KENYON (Newland) (16:43): I will briefly start my contribution by taking up a point made by the member for Morialta, who said that the government is only seeking a political outcome. If this motion sought to be anything other than political, it would have included some sort of policy prescription. It might have included some sort of contribution to the policy debate. We do not have that. What we have is a purely political motion from the Leader of the Opposition. So, contrary to the claims of the member for Morialta, it is not us who are being political: it is those on that side who have wandered in with a motion aimed at negatively portraying the problems and challenges that this state faces.

The fundamental problem, of course, comes from the sale of ETSA—the fundamental problem of a loss of control of a power network. We sold the interconnectors or the transmission system separately, we sold the distribution system separately, we sold the generation separately and we sold the retailing separately. We broke it up, we sold it off and we lost control.

It is very difficult indeed for a state government to control the way the energy generators switch on and switch off when control of the generators themselves have been passed to the private sector which, quite rightly, operates for money. They have never pretended to be doing anything other than operating for profit, rather than for the economic good of the state or the social good of the state, as Playford intended when he first nationalised the system back in the forties. One of the problems with the national market is the lack of interconnection between South Australia and New South Wales.

That is the result of a roadside bomb left by the Hon. Mr Lucas in another place when, in the process of selling the assets, he ramped up the price by making competition all the more difficult. That scotched the interconnector. But a national market requires a national solution and national leadership. We are not seeing that from the federal government and that is part of the problem. We certainly need the federal government to be involved in a discussion about the energy distribution system and the energy generation system in this country, and we are not seeing that. These are all parts of the problem.

The only solution I have seen the opposition offer up was on 9 February when the Leader of the Opposition suggested that we look at nuclear power. I must say I am deeply ambivalent about nuclear power. I am more than happy for someone to do it should they choose to, but everybody who has ever looked at it in an economic sense has said that it is expensive and probably too expensive. Even the royal commission found that.

The royal commission found that the nuclear power option for the state was not economic. They found that the nuclear waste proposal was economic and certainly worth investigating further, but the Leader of the Opposition and the Liberal Party did not choose the economic option: they chose the uneconomic option. The irony is that nuclear power, of course, uses nuclear fuel which, over time, becomes spent. The spent nuclear fuel requires a repository, so we would still have to build the dump: we just would not have overseas people paying for it. We would take the full cost. Burying the nuclear waste from one generator is almost as expensive as burying the nuclear waste from 100 generators.

The incremental difference is some tunnelling, but the costs associated with building a nuclear waste dump are site selection, which you would have to do for both options, geological studies underground, which you would have to do for both options, and building a decline down to the depth, which you would have to do for both options. The only difference between the two is how much tunnelling you do to store the nuclear waste you need to put in.

It is an incremental increase in cost to store, for instance, waste from multiple sites, including that from overseas, on top of the cost of building it just for one. The Leader of the Opposition is not proposing to take foreign income to pay for building a nuclear waste dump that would be an inevitable result of building a nuclear power station, so he is actually increasing the cost of the waste storage and having none of the benefit that the royal commission found is very likely to be available as a result of storing foreign nuclear waste.

I welcome the opposition back to the discussion about nuclear power because I think it needs to be had. I think we need to have the interconnection to New South Wales and changes to the national rules, again with the help of the federal government, that may actually make nuclear viable. That is a discussion worth having from my point of view. I think all those on this side of the house would welcome that discussion about whether in fact nuclear power, in a truly integrated national market, has a contribution to make.

I welcome the Liberal Party back to that discussion, but they have to necessarily accept that that means we are also having a discussion about a nuclear waste repository, and that means we need to work out how we are going to pay for that and whether we want to accept the full cost of that repository being borne by the electors of this state or whether we want to accept foreign waste to help us pay for that.

In fact, deciding to use nuclear power to help solve the energy challenges that face us actually makes a foreign solution to nuclear waste, or at least storing foreign waste, more likely because that would be one way to offset the enormous costs we would face in building a repository for one nuclear power station.

I am more than happy to get involved in that debate. I have been advocating for it for a very long time. I will continue to advocate for it and I welcome the Liberal Party to that discussion, but they have to do it in the full knowledge that we are back to talking about a nuclear fuel dump via the back door, and that is a discussion, in my view, that is definitely worth having.

Mr BELL (Mount Gambier) (16:50): I will be very brief, but I just want to make a couple of comments. I rise in support of this motion.

The DEPUTY SPEAKER: Before you start, it has just been drawn to my attention that we need to extend before 5pm.

Sitting extended beyond 17:00 on motion of Hon. G.G. Brock.

Mr BELL: I think there are a couple of points that have not been made in this debate. The first one is that it is okay to set a renewable target that you want to achieve. Nobody is debating that and, in fact, we have a national target. But when a state decides to set an overly ambitious target without any consideration of the overall effect on the network, it is reckless at best and negligent in many other ways.

Knowing the system, a 40 per cent renewables target means that we were always going to be running into problems. It is like saying to every man, woman and child in South Australia, 'Here is a car. You need to drive on the roads. We have no public transport.' All of a sudden the roads start clogging up and you look for somebody else to blame (i.e. the federal government is not doing enough to improve the roads in South Australia).

As to the renewable energy system and also the market, the Treasurer has stated in this house in a committee hearing in 2015 that the National Electricity Market has delivered high levels of reliability to South Australia. In fact, he is quoted as saying, 'We have designed it, we have built it and it's worked and served us well.' Well, 2015 was not that long ago, so obviously the Treasurer at that point was not fully aware of the issues or did not have his eye on the ball. He comes in here and says that the operators have been gaming the system. I ask the Treasurer: what have you been doing about it? You have been in government for 15 years and, if there are examples of operators gaming the system, what have you been doing about it?

The renewable energy target is one issue that is very rarely brought up in this place. The RET, for people's information, creates a market where certificates are currency, so one megawatt hour of renewable energy becomes one certificate. They are created by power stations and bought by electrical retailers. To participate, you must be an accredited renewable energy power station. Those producing power above what is called the baseline (which I believe was created in 1997) are able to sell, trade or offset the cost of generation, but it is a floating price—one certificate, as of 23 February, was about $85—so that puts a price on power straightaway.

The problem with renewable energy, particularly wind energy, is that it is intermittent, so it has to be backed up by base load power, a fact that is quite often lost on those opposite who do not understand the market. The other problem is that it is very tricky to balance the network and keep it in harmony. To keep it in perfect harmony, it has to be within 50 hertz every second of every day. If the frequency gets out of tune, the system identifies a fault that could destroy it and trips the shutdown switch. This electrical harmony is called synchronous supply, and thermal power is very good at delivering this to the grid.

Wind power is asynchronous. Its frequency fluctuates with the breeze, and it has to be stabilised by the give and take of other sources of demand and supply. With 40 per cent of our energy mix generated by wind and a high uptake of rooftop solar panels, the reduction in demand driven by rooftop cells, coupled with the low price that subsidised wind farms can bid into the electricity market, has shut down all of the state's coal-fired power plants. Now we rely on three sources for power: wind, gas and—and this may come as a big shock to the government—coal-fired power imported from Victoria through two interconnectors that are the lifeline to the National Electricity Market.

This government bemoans the National Electricity Market. I go back to my point before: if they have realised problems, why have they not done anything about it? They have been in government for 15 years, and I think the people of South Australia are getting sick and tired of this government blaming everybody except for themselves. The National Electricity Market has five trading regions: New South Wales and the ACT, Victoria, Queensland, South Australia and Tasmania. The trading regions are interconnected via high-voltage transmission lines.

There are some rules governing how the AEMO manages this trading. Maybe this is where the Treasurer can find some of the work he needs to be looking at. The demand for electricity is matched with supply from generators in five-minute periods in the order of generator bid price. Nowhere in this chamber have I heard the term 'bid price', yet if you talk to anyone who knows something about the energy market they will say that one of the problems is that a renewable source can bid in at a low price knowing, via the rules, that the National Electricity Market regulator then takes the highest point at that five-minute interval and sets all the bids at that highest price.

The Hon. T.R. Kenyon: Any generator can do that.

Mr BELL: Exactly. Why is the Treasurer not looking at that as an area of reform? No, not every generator can do it, because they have a break-even point without subsidies. That is what has forced coal out of the South Australian market. Six dispatch prices are averaged every half an hour, which determines the spot price for regions at each half-hourly trading interval. The National Electricity Rules stipulate a maximum spot price of $12,500 per megawatt hour, which is the market price cap—and quite often we have been paying that—and a minimum spot price of minus $1,000 per megawatt hour, which is the market floor price.

This negative market floor price allows generators to pay to stay online when the cost of staying online is lower than the cost of shutting down and restarting their plants. For a renewable generator, staying online may also cost less than the generators receive from support mechanisms, such as the RET scheme, plus their own costs. What I am trying to get at is that we hear a lot of rhetoric in this place. If this government is serious about sorting out the power crisis that is engulfing this state, then they need to look at some of the rules and bring proactive solutions to this parliament.

Mr MARSHALL (Dunstan—Leader of the Opposition) (16:59): I would like to conclude by thanking everybody who has made a contribution. The reason this particular motion was brought to the house is that the Liberal Party has been raising very legitimate and sensible questions about the energy policy of this government, not just for days and weeks and months but, in fact, for years. The Liberal Party has raised very legitimate questions about the government's ideological pursuit of their utopian ideal to have the entire state supplied by renewable energy. This is what the government has pursued and the opposition, of course, has been asking legitimate questions.

This week has been a perfect example, with question after question to the government with no answers—no answers whatsoever to very basic straightforward questions. There was some sort of rhetoric, some sort of rubbish that came from the minister's mouth for minutes, and then today, of course, he was completely cut off by the Premier. I think even the Premier is sick to death of hearing him, so he answered all the questions today but, unfortunately, the content was no better.

Today we had a line-up of people from the government trying to talk about this very important point that we need to be considering, and it was disappointing. I think the kindest thing I can say about the contribution from the government today is that it was variable. There was a lot of variety in the answers but they were all around a single theme, which was to blame somebody else and take no responsibility. Quite frankly, I think the people of South Australia are sick to death of that attitude. We are where we are. It is a mess. The mess was created by Labor. Take it on the chin.

Where do we go going forward? We have heard virtually nothing. The parliament has been consumed with this issue for hours now and there has been virtually nothing from those opposite. They are the ones, of course, who have put this current ideological position in place. By contrast, on this side of the chamber we have been raising legitimate concerns for years about the penetration of intermittent renewable energy in South Australia regarding the viability of the Alinta plant at Port Augusta, regarding the response of the government to the call from Alinta representatives to provide a subsidy to keep that facility open, to manage the transition to renewable energy in a more orderly fashion and in a way that would ensure that we maintain energy affordability and energy reliability in South Australia.

All those legitimate concerns raised by the opposition over an extended period of time were dismissed by the government, who knew better. However, now we find ourselves in the situation where we have the highest electricity prices in the nation and the least reliable grid in the entire nation. We have become the laughing stock of the entire nation because the Premier and the minister's energy policy has humiliated this state and, of course, has done almost irreparable damage to the future attractiveness of this state to attract investment capital at a time when we so desperately need it.

What else have we been talking about on this side of the chamber? First of all, we have come out with our plan to scrap the renewable energy target at the state level. We do not want to see our state put at a disadvantage to the other states, those states that we have to compete with. We do not accept that we should have significantly higher rates than the Victorians. It is soul destroying for producers and families in the South-East and in the Riverland who can see into another state and know that the power there is half the price of what it is here in South Australia.

The human face of the government's policies is absolutely soul destroying. Families are doing it tough, businesses are doing it tough and, of course, unemployment is going through the roof. The Liberal Party says: let's scrap the state-based renewable energy target and let's put everything back on the table. Let's take a look at whether or not we can get the Alinta plant at Port Augusta fired up again for a transition period as we move through to renewables. Let's look at managing our demand, lowering our peak demand in South Australia and therefore lowering our overall costs of energy in this state.

Look at improving base load: that base load cannot be from where the government is finding it from wind energy, it has to be from areas like coal, potentially nuclear, solar thermal, for which the member for Stuart has been advocating for quite some time, or from pumped hydro—a project which the Prime Minister himself is very positive about.

We have also been saying that it is great to have all this intermittent energy, but what we need is the storage of that intermittent energy so that we can use it when we need it. The Finkel report is about to come down, the AEMO final report is about to come down. They will be instructive. It is now over to the government to tell us what their plan is, listen to the experts, tell us what the plan is and how they are going to dig us out of the hole which they have created for South Australians. I commend the motion to the house.

The house divided on the motion:

Ayes 17

Noes 22

Majority 5

Motion thus negatived.