Bills

Emergency Management (Electricity Supply Emergencies) Amendment Bill

Introduction and First Reading

The Hon. J.W. WEATHERILL (Cheltenham—Premier) (11:02): Obtained leave and introduced a bill for an act to amend the Emergency Management Act 2004. Read a first time.

Second Reading

The Hon. J.W. WEATHERILL (Cheltenham—Premier) (11:03): I move:

That this bill be now read a second time.

The national energy market is failing South Australia and the nation. The events of 8 February 2017 are a key example of how the system is letting down South Australians. Rather than directing an offline generator into service to meet a supply shortfall, the Australian Energy Market Operator decided that a large part of the South Australian community should be denied electricity in a time of extreme heat.

Another example is the events of 28 September 2016. In the lead-up to the statewide blackout, we contacted the Australian Energy Market Operator to express concerns over the Bureau of Meteorology's forecast of severe weather conditions. However, no direct action was taken by AEMO to reduce the risk of outages from any damage to the South Australian power system.

There has also been a distinct absence of national leadership on energy policy, particularly over the question of a price on carbon. This uncertainty has led to a lack of investment in new electricity generation, and we now have a small number of power companies with extraordinary control over the market pursuing profits at the expense of reliable, affordable power.

South Australians have faced blackouts throughout our history, and networks with above-ground infrastructure will always be vulnerable to weather and interruptions. Consequently, no government can guarantee that the power will never go out. However, South Australians have the right to expect the highest possible levels of electricity reliability and security.

On 14 March 2017, the South Australian government released a comprehensive energy plan to take charge of the state's energy future and deliver reliable, affordable and clean power for South Australians. Our plan is designed to put South Australia first and give our state greater control of our local energy security.

Ms Chapman interjecting:

The SPEAKER: I call the deputy leader to order.

The Hon. J.W. WEATHERILL: The Emergency Management (Electricity Supply Emergencies) Amendment Bill 2017 is an essential component of the energy plan. It will ensure that, in times of electricity supply emergency, the minister responsible for energy will be able to make directions to protect the needs of the South Australian community. The minister responsible for energy will be provided with the power to declare an electricity supply emergency if it appears, on reasonable grounds, that the supply of electricity to all or part of the South Australian community is disrupted to a significant degree or there is a real risk that it may be disrupted to a significant degree.

There is an urgent need to enact these powers. We have seen a year of extreme weather events in South Australia, testing the power system. On top of this, we are seeing coal-fired power stations closing, which reduces supply in the National Electricity Market. Without clear national policy settings, little or no investment is occurring to replace the generation that has exited the system. Relying on existing provisions for the management of emergencies is not an option. Electricity supply emergencies occur very swiftly. Currently, where severe or prolonged electricity supply shortfalls occur, there are legislative powers under the Essential Services Act 1981 that enable the South Australian government to impose directions.

The Attorney-General has responsibility for the administration of the ESA, and process requires the Governor to declare a period of emergency and declare energy as a specified essential service for that period of emergency. On 8 February 2017, there was less than two hours between the notice of a lack of reserve and the instruction by the Australian Energy Market Operator to the network operators to shed load. Under the current process, it would not have been possible to act quickly enough to avoid load shedding. The bill establishes an efficient process for the declaration of an electricity supply emergency that gives a responsibility to the minister responsible for energy and allows the government to rapidly respond to scenarios as they emerge.

The bill also provides that the minister responsible for energy may refer matters regarding the electricity supply emergency to the Essential Services Commission of South Australia and the Technical Regulator for inquiry to ensure that South Australians are provided with transparent and efficient reporting on the management of these events. Exercising these powers will require the government to monitor conditions, to have information available to determine whether the electricity supply is insufficient or likely to become so, and have information to inform the issuance of directions.

It is likely that persons holding information relevant to the exercise of the powers under this bill will be willing to share information. However, they may question whether they have the right to provide such information. To provide clarity, the bill includes the right to require information from any person to support the minister's functions and at any time, not only when an electricity supply emergency declaration has been made. Electricity supply emergencies will be for a limited period of time. The bill recognises this and provides that an electricity supply emergency declaration can only apply for a maximum period of 14 days. A declaration can only apply for a longer period on the approval of the Governor.

During an electricity supply emergency, the minister responsible for energy may issue directions to a generator, retailer or the Australian Energy Market Operator. It is intended that the issuing of directions is only used as a last resort. The government expects that both market participants and the Australian Energy Market Operator will take all action available to them to ensure that the community needs are met in a potential or actual electricity supply emergency.

An important feature of the bill is that it removes any doubts that may have arisen under the ESA that the minister may, in the context of an electricity supply emergency, issue specific directions to the Australian Energy Market Operator. This will include directions requiring AEMO to restrict electricity flow over the interconnector, requiring AEMO to direct other market participants in accordance with the National Electricity Law, or requiring AEMO to suspend the spot market in South Australia.

Providing these directions is a function that government should perform, if necessary, in an electricity supply emergency. This is, in fact, complementary to the national electricity framework, which expressly contemplates governments performing such a role, with the National Electricity Rules requiring the Australian Energy Market Operator to liaise with jurisdictions in relation to the use of emergency services powers. This bill represents one component of the government's energy plan. Overall, the energy plan will make our power supply more reliable and secure—

Mr Pederick: It couldn't get much worse.

The SPEAKER: I call the member for Hammond to order.

The Hon. J.W. WEATHERILL: —with the introduction of battery storage into the power system and increased energy security services such as inertia to help manage frequency disturbances. It is therefore considered appropriate that the bill provides for a review and report on the powers after five years of operation. South Australians are calling for action to ensure a reliable, competitive and clean power supply for all into the future. This bill represents an essential component for delivering these requirements to all South Australians. I commend this bill to members.

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (11:10): I move:

That the debate be adjourned.

The house divided on the motion:

Ayes 17

Noes 21

Majority 4

Motion thus negatived.

Mr PICTON (Kaurna) (11:16): This is a most urgent bill for the people of South Australia and for securing our energy future as a state. This government has a very bold, well thought-out, considered plan for securing our energy future as a state. It has been documented, it has been thoroughly worked through, to secure our energy future for households in South Australia, to secure our energy future for businesses in South Australia and to not be reliant upon the whims of private companies, to not be reliant upon the whims of the federal government and its inaction in Canberra, and to not be reliant on the whims of the national market operator when they are not looking out for South Australia.

This bill has a very important part to play in this. We saw what happened on 8 February this year in South Australia when we were let down by the national market operator not turning on Pelican Point power station in this state. We had enough supply to manage the load in South Australia, but the national market operator, AEMO, refused to order on the Pelican Point power station, refused to provide the extra supply until it was far too late for that to happen, and we saw load shedding in South Australia. That did not need to happen; that could have been prevented.

How do we know that could have been prevented? Because exactly the same scenario happened the following day, 9 February, and on that day AEMO did take preventative action and did order on the second unit at Pelican Point power station, and we did avoid load shedding in South Australia, so what happened was entirely preventable, and that is why this government is bringing this very urgent legislation to this parliament.

Those opposite do not want to debate it now—they want to put it on the backburner—this is not important to debate. They wanted to adjourn it, but we want to debate this right now. Dealing with this is very urgent for South Australia. We need these powers restored for this parliament for our emergency management issues for this state.

The federal government has no energy policy whatsoever and flounders on this issue, which has led to the fact that there is no investment in energy across the country going in at the moment. Their response, after the 8 February event, was that we should have used our emergency powers. Well, that is what we are going to do in the future: we are going to use our emergency powers, but they are not going to be cumbersome like they were in the past, when we would have to organise a cabinet meeting and get the Governor to sign off on using them.

We are going to have emergency powers, where the government and the energy minister can take the action necessary to prevent these situations occurring in the future, because that is what South Australians want. South Australians want this government to take control of our energy future and to take control of generators when they are not providing. Of course, it is very clear that some generators—and it is happening not just in South Australia but across the country—will make more money if they have less generation turned on.

That is a failure of the National Electricity Market. It is a sad thing to say, but the National Electricity Market has failed and we need to reform it. This is a very important part of doing that. This is the first step in doing that, and there is a whole range of other ways that are part of our plan to secure South Australia's energy future. Another important way is that we are going to procure a faster new gas generator that will be owned by the people of South Australia. It will not be privatised—

Mr Whetstone interjecting:

The SPEAKER: The member for Chaffey is called to order.

Mr PICTON: —like all the other generators in South Australia since those opposite and their predecessors privatised our energy assets in the 1990s.

Mr Whetstone interjecting:

The SPEAKER: The member for Chaffey is warned.

Mr PICTON: This will be a generator that will be owned, run and managed by the people of South Australia, all the taxpayers, for the people of South Australia, which is very important. It is not for private profit to be sent overseas or around the country: this is for South Australia's energy security. Very importantly, it will provide stability services to the grid and will also be there in times of peak emergency demand to provide energy security for our state. We are also investing in Australia's largest battery because we do have great renewable energy resources in this state and we need to make sure we are using them to the best capability possible.

Game-changing technology is happening in storage. We will be able to use that at different times of the day for the energy security of South Australians. We are also using our government load for hospitals, for schools and for all our government offices, and contracting that out with a new energy provider to bring another generator into South Australia to provide more competition so that households and businesses have another option to go to when they want to contract for their electricity.

More competition will bring down prices in South Australia. Sadly, one of the big problems we have had is not enough competition in our energy market. It is an oligopoly controlled by a very small number of market participants, and the people and businesses in South Australia are suffering because of that. We are going to use our powers in terms of our contracting load—

Mr Whetstone interjecting:

The SPEAKER: The member for Chaffey is warned for the second and final time.

Mr PICTON: —to bring another energy supplier into South Australia. We are, of course, also a gas state. That is very important. If we look at the gas prices and the increase we have seen, it tracks very neatly with the increase in electricity prices because we are a gas state. Sadly, we have not seen enough exploration and drilling of gas in South Australia recently, and a lot has been sent overseas. We are incentivising gas developers to get out there and drill for more gas—more gas in Moomba, more gas in the South-East.

We want to get the gas out of the ground. Very importantly, as part of those contracts they are going to be used for South Australian electricity generation for South Australian households and for South Australian businesses first. That is very important for the future of South Australia. What is the alternative policy?

An honourable member: A ban.

Mr PICTON: A ban—a ban on gas development in South Australia. That is what the opposition want to do. They want to ban gas developments happening in South Australia. They want to send shivers down the spine of every investor in gas developments in South Australia, which are of course the backbone of our electricity system in South Australia. The people of South Australia will be very wary of your ban. It is a cheap ploy to win a few seats from Nick Xenophon down in the South-East, and it is putting all of South Australia's electricity future at risk.

Ms Sanderson interjecting:

The SPEAKER: The member for Adelaide is called to order.

Mr PICTON: We are also going to introduce the energy security target. We have been working on this with Danny Price, who is Malcolm Turnbull's preferred electricity economist, because we have such a lack of action from the federal government, remembering that everybody—from BHP to all the energy companies, to the Business Council—wants to see an emissions intensity scheme introduced in Canberra because that is what will invest more money into getting new generation off the ground.

Sadly, we see no action on that front from Canberra, so we are having to take our own action in the interim to bring in an energy security target that will be important not just for providing security for our system but, also, the modelling shows it will help to bring down prices in South Australia as well, which is very important for businesses and consumers.

So, all of those packaged together is a well thought-out package. It is something about which you would think the opposition would say, 'We will support this. We will jump on board and support this in the bipartisan interests of South Australia.' But no. They have no policy whatsoever, except for banning gas, except for saying to Canberra, 'You can look after all our targets for renewables, we will have no say here in South Australia over our energy policy.' They will just say, 'Leave it up to Canberra, whatever is in Canberra's best interests.'

We have a different view. We say South Australia first. We say protect our state, protect our energy first, and that is what this bill is doing. This is a bill to bring in the powers we need to put our state first, to put households and businesses in this state first, and it is something that should be supported by this parliament on completely bipartisan terms. Unfortunately, that is probably not going to happen. This is going to be a significant test for those opposite. We will see if they really are supporting South Australia or if they just want to do Josh Frydenberg's bidding and support whatever it is they want to do in Canberra, because we know that the Prime Minister is now the South Australian opposition leader.

This is something all South Australians should support. We should support our government having the ability to control our energy future and be able to stop market manipulations happening that stop electricity being provided to businesses and households of South Australia. I hope that every member of this house will support this bill today.

Mr MARSHALL (Dunstan—Leader of the Opposition) (11:26): I rise to address this urgent piece of legislation which has been brought to the house by the Premier, the Emergency Management (Electricity Supply Emergencies) Amendment Bill 2017. It is interesting that the very next speaker the Labor Party pops up is a backbencher who cannot even make his way onto the front bench on the opposite side. There is so much talent on that side of the chamber that he cannot even manage to get there, and he uses half his allocated time to talk about the urgent, urgent need for reform here in South Australia.

However, I applaud him because he has finally realised that the situation we have in South Australia is indeed a crisis. The question everyone needs to be asking is: why have we got into this situation here in South Australia? I will tell you the reason: it is because those opposite have been sitting on their hands for 15 years. In fact, until very recently they have been telling us that their plan is world class, their plan is world leading, and that South Australia has this new nirvana it is heading towards with this massive push into intermittent renewable energy here in this state, the highest penetration of intermittent renewable energy in the world.

Of course, the reality is very different. It is very different for every business, every householder here in this state. What we have, as a consequence of 15 years of Labor maladministration in terms of electricity, is the highest priced, least reliable grid in the nation. They are the facts, and those opposite cannot escape those facts. They have stuck a wrecking ball through the South Australian economy with the highest priced electricity and the least reliable grid in the country, and now they come into the parliament today and say, 'We've got a plan, emergency powers.'

Who do they want to give the emergency powers to? They want to give them to the perpetrator, the person who has been in this parliament as the minister in this area for almost six years. They want to give him increased power. Quite frankly, this government and this minister should hang their heads in shame for what they have done to the people of this state—emergency powers to direct different operators in the national grid.

We are here to have a look at this piece of legislation, but it begs the question: if the government were so intent that this was the solution, why would they not follow the normal practice of providing a copy of the legislation in advance of the debate to the people in this parliament? No such courtesy was provided. Why? Were they trying to hide something? Are there errors throughout this piece of legislation that they did not want us to find in the parliament for their stunt today?

This is completely and utterly unorthodox. If they were serious about fixing the mess they have inflicted upon the people of South Australia, they would be working with us on this side of the chamber but, instead, all they are interested in is playing petty politics. Hazelwood closes this week, and that is going to put us under enormous additional pressure in South Australia because the fragility of our grid will be further complicated when Hazelwood, which we have been so reliant on in South Australia, goes offline.

When we have asked the Minister for Energy what the consequences are of Hazelwood closing, he has publicly stated that this will be good for South Australia. It is very difficult to see how the closure of Hazelwood this week is going to have a positive effect on reducing prices and increasing the stability of our grid in South Australia. It provides more than 20 per cent of the energy into the Victorian market, and we know that we have become completely and utterly dependent on energy coming across the border into South Australia to shore up the stability of our grid.

The reason why we have had to do that is that this government has been ideologically obsessed with intermittent renewable energy. They have driven out the base load providers from South Australia by continuing to undermine the viability of these producers such that the only option for South Australia going forward is this interconnector with Victoria.

Deloitte Access Economics warned the state government about this several years ago when they said that by 2019 we will be using the full capacity of the interconnector with Victoria for 23 out of every 24 hours. It does not sound to me like we have energy security in South Australia, but we did have energy security in South Australia. In fact, for a very, very long period of time, we had no blackouts in South Australia, and that was because we had Alinta operating the Northern power station at Port Augusta.

With regard to this power station, you will recall that Alinta announced to the market back in May 2015 that they would be exiting South Australia. Immediately after that happened, the futures contract price for energy in South Australia went through the roof. They closed that power plant in June 2016, and that was a very sorry day for every single South Australian business and every single household in this state because no longer did we have that base load power in our state to support keeping our prices low and also the stability of the grid. We know for a fact that there was a deal on the table. We know for a fact that Alinta had gone to the government here in South Australia and said, 'We have an opportunity to keep this plant open, and there are going to be consequences if we don't.' That has been widely publicised through the media.

It was interesting that, during the debate that was held between the Premier and myself only two weeks ago on the date marking one year until the next state election, when the Premier was asked to reveal the details of that offer, he said, 'There was no offer.' He said in front of 650 people, and then broadcast to the rest of the state that evening, that there was no offer. Of course, that was pretty embarrassing for the government because there clearly was an offer. The Treasurer was out at the next meeting saying, 'Yes, there was an offer.' They could not get their story straight within a 24-hour period.

The simple fact of the matter is the government rejected that offer. They still will not tell the people of South Australia what was contained in that offer, but I would bet my house on the fact that that offer was much better than the $558 million that this government is now going to inflict upon the taxpayers in South Australia to solve the problem that they themselves have created.

We have a disastrous situation in South Australia. It could have been avoided, but this was the deliberate policy of those opposite. It was not an accident, it was not something that somebody else had done to us in South Australia: this was the deliberate policy of this failed government here in South Australia. They have had an ideological obsession with intermittent renewable energy and no focus whatsoever, at any point in time, on ensuring base load power in South Australia.

So, now we have this situation where the Premier comes out and says, firstly, that the NEM is broken, which is in complete contradiction to his minister who, when he stood in this chamber only a few months ago, said, 'In fact, we are the lead legislator for the National Electricity Market and, by the way, we have done a great job of reform here in South Australia.' Now, of course, it is the NEM's fault, it is the feds' fault, it is Victoria's fault, it is the interconnectors' fault, and it is coal's fault. It is everybody else's fault except for the government which has been in power for 15 years, the government which has designed our energy policies, and our energy environment in South Australia, and left us in a dangerous situation with the highest price and least reliable grid in the country.

The problem for South Australia is not just limited to the cost of our power or the instability of our grid, but also our reputation. South Australia is making national headlines and, in fact, often international headlines for all the wrong reasons. Travel interstate at the moment and people say, 'I brought a torch just in case you need it when you go back to Adelaide.' The Premier, the minister and the Labor administration have put South Australia in an invidious position in that every time we travel we are having to defend ourselves.

The most recent statistics published by the State Bank in terms of the level of state confidence show that the confidence level in South Australia, our level of state pride, is the lowest it has been since they started recording this measure over 20 years ago. That is a direct response to the energy crisis which is currently in place in South Australia. Moreover, the problem for us going forward is the fact that it will be more and more difficult for us to attract investment into this state, because who will invest in a state that does not have the ability to keep the lights on? Who will invest in a state if they know that their power bill will be significantly higher than in any other jurisdiction in the nation? This government—this hopeless, dysfunctional and divided government—has put us at a competitive disadvantage from people in other states.

Recently, the Liberal Party travelled to the South-East where we held a conference. We spoke to many businesses who told us that if they were on the other side of the border, just a couple of kilometres away, their price would be half of what it is in South Australia. It is the same situation with the member for Chaffey, where many businesses in his electorate are shutting up shop on the South Australian side of the border and moving over to the Victorian side where they have better electricity, more reliable electricity, and their government is more supportive of the private sector. They want to ensure that their businesses can survive. Why do they want to do this? Why are other governments around Australia focused so intently on having reliable and cost-effective energy in their state? I will tell you: because they care about the people of their state. They care about the fact that people want to have jobs in their state.

South Australia has had the highest trend unemployment rate in the nation for 27 consecutive months. For 27 consecutive months, South Australia has had the highest unemployment rate. It is completely and utterly unacceptable, but the government has no plan whatsoever to address it. I find it very frightening to look at the most recent population statistics. They are a culmination of the failed public policies this government has put in place over an extended period of time. Our growth rate in South Australia is now just half a per cent—half a per cent—around a third of the national growth rate. It is like a bike race where the peloton is cycling off and South Australia is getting further and further behind that peloton.

In fact, when you look at the net interstate migration out of South Australia, the statistics are even more frightening, with 6,500 people lost to interstate last financial year alone—6,500 people who could be here in South Australia, contributing to our economy. We have already spent the money educating those people through the secondary system and often through the university system. They have good quality qualifications, but they cannot find a job in South Australia. So, what are they doing? They are moving interstate to Melbourne, Sydney, Brisbane, Hong Kong or London—maybe even Rio de Janeiro. Who knows? What they do not see is a future in South Australia because this government has not focused on creating an environment where business will flourish.

This was made very clear to the people of South Australia when the Premier spoke at the Business SA Property Council lunch recently and said, in front of that 650-strong group of business leaders in South Australia, 'I am not a market guy.' He is not a free market guy. He is a socialist. He believes in big government, big taxes, governments deciding what sort of energy you are going to have, how you are going to live your life, where you are going to go to school and what sort of health system you are going to have. How is that working for South Australia?

Now their response to the energy crisis, which they themselves have created of course, is to say to the people of South Australia, 'We have made a big mess and you are going to have to pay for it—$558 million.' Of course, $360 million of that $558 million is this new gas-fired plant. This is not going to be a plant that is going to operate 24 hours a day, seven days a week. When is it going to be used? Just when we have a blackout. This is a government that does not even trust itself to stabilise the grid because now they are saying to the taxpayers, 'You are going to have to spend $360 million to have an emergency, stand-by, gas-fired, peaking plant in South Australia.' It begs the question: are we desperate for more gas generation in South Australia?

In fact, there is a huge amount of gas generation capacity in South Australia that is completely and utterly underutilised. Why did the government not say, 'Let's put out a tender to the market to have 250 megawatts of power on stand-by. We will underwrite the gas contract. Why don't we put that out to the market and utilise some of that excess capacity?' I will tell you why: because the Premier is not a free market guy. He thinks the only people who can do anything are the government.

Following that logic, we should all be in some utopian existence where we have 100 per cent employment in South Australia and we are all basically excited about living in this state. The lowest state pride in recorded history, the highest unemployment rate for 27 consecutive months, the highest energy prices in South Australia and the least reliable grid, that is exactly what you get after 15 years of the public policy crises that we have had in South Australia under Labor.

We should not be spending $360 million of taxpayer funds to shore up Labor's failed energy strategy. There are better ways of ensuring the stability of our grid. One thing that is very clear is that $360 million is not even where it ends—$360 million is capital cost. Who is going to pay the interest, who is going to pay the depreciation and who is going to pay the operating expenditure each year? The government has not even come clean on how much it is going to cost each and every year to operate this plant at loss. How is this going to interact with the NEM, which South Australia is the lead legislator on? There is no detail from the government whatsoever.

Moreover, when they first announced this $360 million cost to taxpayers in South Australia, they said it would be in place by summer. They were not clear which summer, but they said it was going to be in place by summer. We do not know whether that is 2017 or 2018. Let us hope they do not put the health minister in charge of it. He does not have a good track record on delivering major projects on time or on budget. Three hundred and sixty million is just the guesstimate of what it is going to cost at the moment. We do not know where it is going to be, how it is going to interact with the market, how often it is actually going to operate or what the operating costs of this very expensive piece of kit are going to be.

I am concerned that we are heading for another desal white elephant. The government made a decision to double the size of the desal plant in South Australia. It was a very poor decision. Who paid for that desal plant poor decision? The water consumers in South Australia. It massively increased the regulated asset base that is now part of the maximum amount that SA Water can charge water consumers. Look at how our water bills in South Australia have gone up. They have gone up 250 per cent since this government came to power, and energy is exactly the same.

What we are going to have is a $360 million piece of kit in South Australia. If the government put it out to the market, we could have that insurance policy in place by summer 2017. Instead, what we are going to have under Labor is a promise to install it by summer—maybe 2018, maybe 2019—and in the interim we will just spend tens of millions of dollars, with diesel-fired generators dotted all over the state. These are the clean, green aspirations of this government. We are going to have diesel, we are going to have more coal coming across the interconnector from Victoria. There will be no benefit to the environment whatsoever. It is a failed policy, it is a bad policy, but it is what we have come to expect from a government that has become tired. They have become bored.

I think the Premier nailed it himself when he was doing his interview on 891 at the end of last year. Matthew Abraham or David Bevan said, 'What is one of your great failings? What do you think is one of the things that you could improve on?' He said, 'Really, I just get bored very quickly.' This is the Premier admitting on a broadcast that he gets bored very quickly. He has clearly got bored with energy policy, and that is the reason why South Australia is now at a massive competitive disadvantage.

If this government were serious about solving the problems, they would be looking at issues like demand management. They would be scrapping the renewable energy target in South Australia. They would have been looking at storage years ago, before it became a crisis situation like it is now. There are plenty of things that need to be considered. The Finkel report is coming down in June this year. The Liberal Party will be putting out a very positive policy to lower energy prices in South Australia to return stability and investor confidence to this state.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Industrial Relations, Minister for Child Protection Reform, Minister for the Public Sector, Minister for Consumer and Business Services, Minister for the City of Adelaide) (11:46): I am obviously rising to speak in favour of the bill. I think it is important for us to consider how it is that we are here at the present time confronting this issue, and the answer is that we are confronting a market failure. We have a situation where a so-called free market for electricity has resulted in electricity being rationed around the country on the basis of how the producers of that electricity can maximise their returns on their investments.

We have a classic example of where not that long ago in South Australia, in February, we had the power switched off to three times as many people as needed to have it switched off in order to accommodate load shedding which could have been rendered unnecessary by turning on an extra power unit. They chose not to for whatever reason. As a result, we had consumers who had the stability of their power supply interrupted.

Interestingly enough, it does not suit some people who are in this debate to recognise this, but this is not a uniquely South Australian problem. In fact, a day or so after that, load shedding occurred in New South Wales, which is the home of the coal-generating business. Because New South Wales had a particular contractual arrangement with a large aluminium smelter in New South Wales, that major consumer switched that off in order to make sure that consumption by the voting consumers in New South Wales was not interrupted.

But just remember this: that aluminium smelter in New South Wales was the subject of load shedding. As it turns out, there are contractual arrangements between that smelter and the government. I do not know that they have ever been relied upon before, but it is only because they shut down a smelter in New South Wales that they did not have lights going out there as well. So, all this rubbish about South Australia being unique in facing load shedding is completely false. We saw it only last month in New South Wales. It is just that in New South Wales they chose to do the equivalent of shutting down Olympic Dam rather than allowing consumers in New South Wales to feel the effect of load shedding.

In Victoria, as we all know, Hazelwood is closing down, but I will speak a little more about that later. The fact is that people want to have a conversation in this space and say it is all about South Australia, that South Australia is unique—not true. We saw the absolute proof of that only a couple of weeks ago. We have a national issue about the way in which the so-called electricity market is delivering for people and industry and business around the country. If there has ever been a market failure, this is it.

The people of South Australia have the reasonable expectation that the state government will do something to intervene in order to improve the reliability and security of the delivery of power in South Australia. That is not an unreasonable expectation for the public to have. The government accepts that, notwithstanding the fact that the present problems are not of the making of this current government, that is not really a conversation the public are interested in having. They are not so much interested in the fact that it was the former Liberal government that got rid of our power assets. They are not even interested perhaps in knowing about the failures of AEMO. What they are interested in is knowing what we are going to do about it.

The government has spent some time working up a plan to respond to this, and the plan is now the subject of public discussion. The plan has been generally well received by those people who are dispassionate observers of the market, and this legislation is a critical element of that plan. What this piece of the plan says is that the energy minister should have the capacity, when there is perceived to be a real threat of significance to the supply of electricity to South Australian consumers, to intervene and make certain mandatory requirements of generators and others in the market in order to put some stability and security into the market.

It is my view and the government's view that this is the sort of intervention that the public expects on the part of its government, and we are therefore taking forward this measure in order to ensure that the South Australian public know that their government, and in particular the energy minister, is empowered in circumstances where there is a real threat to the stability or continuity of supply of electricity to intervene on their behalf. At the moment, there is no such power on behalf of the minister, short of a state of emergency. Given the way the thing is currently constructed, that would involve a natural disaster, most probably in the nature of a bushfire or a flood. It involves cabinet meetings, Executive Council and the intervention of the Governor.

This proposal means that the energy minister will be able to respond in a nimble, timely fashion. Once he became aware of an event such as the outage that occurred in February, he would be able to move immediately to try to stabilise the power supply and ensure that there was not an interruption in South Australia. I think that that is the sort of intervention, the sort of response and the sort of leadership that the people of South Australia expect the government to deliver.

This bill is an important measure in respect of that. This bill needs to be dealt with as soon as possible. I was quite surprised to see that the opposition wished to simply adjourn the debate on this bill today. These are the people who made so much of a fuss about how terrible the circumstances are. We come in and bring that bill forward and we have the opposition making all sorts of noises about an urgent need for things to be done and asking, 'When are you going to act? When are you going to act?'

Members interjecting:

The DEPUTY SPEAKER: Deputy Premier. The Speaker has given us instructions this morning to make sure that the debate is heard in silence, so I remind members of the standing orders and trust that their cooperation will continue when they speak as well.

The Hon. J.R. RAU: We come in here to move quickly through this. It is not as if everyone has been taken by surprise. This has been the subject of—

Members interjecting:

The DEPUTY SPEAKER: Order! There is a ruling on audible laughter.

The Hon. J.R. RAU: And canned laughter as well, I think, isn't there?

The DEPUTY SPEAKER: Faux laughter.

The Hon. J.R. RAU: What has happened is that we announced some time ago what we were intending to do. Today we are delivering, and what is their response? Adjourn it off. No hurry.

Mr Bell: No heads-up to the whips. No speaking lists.

The DEPUTY SPEAKER: The member for Mount Gambier is called to order.

The Hon. J.R. RAU: The other thing that has emerged over the last few weeks—

Mr Bell: You just rewrite history, don't you?

The DEPUTY SPEAKER: The member for Mount Gambier will be leaving the chamber shortly.

The Hon. J.R. RAU: —as more and more of the credible people are coming out of the woodwork to comment—and only as recently as yesterday, Professor Garnaut was again out of the blocks on this topic—is that if there had been a consistent price for carbon sitting in a marketplace for the last few years, long-term investment decisions by people, whether they be coal producers, gas producers, photovoltaics or whoever they might be—

Mr Bell: What did AEMO say today?

The DEPUTY SPEAKER: Member for Mount Gambier, no. No more.

The Hon. J.R. RAU: —could have been made by those people. There could have been natural decision-making by investors to renew, refresh and supplement the sources of power in the Australian market but, of course, courtesy of the Abbott government with the repeal of the carbon-pricing mechanism, all of that fell away—

Mr Marshall interjecting:

The DEPUTY SPEAKER: Leader!

The Hon. J.R. RAU: —and we have no investment in coal-fired generators or gas generators for that matter or, in fact, any generators using fossil fuels. There is none at all. Why? Because there is no price on carbon. They know it is coming. They know we have signed up to the Paris Agreement, whereby we have promised to deliver emission cuts into the future. They know the only way that can be achieved is by changing the amount of use of carbon fuel. They know that, but they also know that, in order to achieve that, there will have to be a price on carbon.

They know there is no price now and they know they are not going to make a 40 or 50-year investment in plant worth hundreds of millions of dollars not knowing what the environment will be, other than to know the environment will definitely change and definitely change to add to the expense of carbon. The sooner we get a price for carbon, the sooner the market knows what is going to happen, and the sooner market mechanisms will work.

Everybody, except the current federal government and the opposition here, who wait for instructions—there is a red phone, a bit like the one that Commissioner Gordon had where Christopher Pyne gets on the phone, somebody picks it up at the other end, Christopher gives his instructions and they say, 'Yes, boss. No, boss,' and then put the phone down—

Mr Marshall interjecting:

The DEPUTY SPEAKER: The leader is called to order.

Ms Chapman interjecting:

The DEPUTY SPEAKER: Deputy leader! Deputy Premier, we will stop the clock. We cannot continue with continual interjections. I cannot hear what he is saying and I am sure Hansard cannot. Everybody needs to be afforded the same courtesy in the house. I know members understand the standing orders and I know they are feeling very passionate, but they will wait in silence to have their own turn to be passionate. Deputy Premier.

The Hon. J.R. RAU: Anyway, the phone goes and it is, 'What do we do now, Chris?'

Ms CHAPMAN: Point of order.

The DEPUTY SPEAKER: We have a point of order, which will not be frivolous, will it?

Ms CHAPMAN: This is clearly not relevant to the debate.

The DEPUTY SPEAKER: Well, I cannot hear what he is saying.

Ms CHAPMAN: Mr Pyne can be blamed for lots of things, but not this problem.

The DEPUTY SPEAKER: I will listen to him now carefully. Rewind.

The Hon. J.R. RAU: Can I make it clear that I am not suggesting that the member for Davenport gets these calls, and possibly not even the member for Schubert, but others do, I believe. What they do is follow this federal line. The only thing that surprises me is that they have not turned up here with lumps of coal to be able to make the point that—

The DEPUTY SPEAKER: Don't give them anything.

The Hon. J.R. RAU: Okay, right, well, I will move on then, but I think I have made that point.

Members interjecting:

The DEPUTY SPEAKER: Order! We have new carpet. We do not want coal dust on the new carpet.

Mr Marshall interjecting:

The Hon. J.R. RAU: Let me get to another—

The DEPUTY SPEAKER: Leader, I am loath to take you any further than a call to order.

Ms Chapman interjecting:

The DEPUTY SPEAKER: The deputy leader already has a call to order.

The Hon. J.R. RAU: Another fascinating intervention, which actually was—

Mr Bell: Diesel generators. Whose brainchild was that?

The DEPUTY SPEAKER: Not the member for Mount Gambier, who is warned for the first time.

The Hon. J.R. RAU: —foreshadowed for some time. It is foreshadowed, of course, in the great immortal words of Banjo Patterson, where, in The Man From Snowy River, he talked about the colt from old Regret getting away. Of course, we had the man from Snowy River a couple of weeks ago and there he was, the colt from old Regret. We do not have a carbon price, but there he is anyway—the man from Snowy River, standing there talking about nation building. Let's get a few things clear. Number one is that the Snowy scheme is not a base load power generation scheme.

Mr Marshall interjecting:

The Hon. J.R. RAU: No; Mr Frydenberg got on the telly, and the man from Snowy River was up there, talking about how this was base load electricity—not true. It is a peaking plant. It is generated by water running down a hill. When the water runs out of the top of the hill, the water running down the hill stops, the generators stop. You could build another five, 10, 20 dams up there and there would still not be enough to provide stable base load power; it is a peaking plant. If you have a look at what the Snowy River scheme does—

Mr MARSHALL: Point of order, Deputy Speaker: reference. I am wondering whether you could direct the Deputy Premier, who is also of course the Attorney-General in South Australia, to address the legalities of the issues contained within this bill rather than his current version of popular characters in Australia and world cinema history.

The DEPUTY SPEAKER: I am sure, in his usual—

Mr Marshall interjecting:

The DEPUTY SPEAKER: Order, leader!

The Hon. J.R. RAU: I am glad we raised the legals.

The DEPUTY SPEAKER: Just a second; sit down. Leader, you have made your point, then you spoilt your record by interjecting again. I was about to say that I am sure the Deputy Premier, in his usual stylish fashion, will draw everything together in the final 60 seconds.

The Hon. J.R. RAU: Tie it all together.

The DEPUTY SPEAKER: That's right. You only have seven more minutes to listen.

The Hon. J.R. RAU: I will start to bring the loose ends together.

The DEPUTY SPEAKER: I thought you would.

The Hon. J.R. RAU: On the Snowy River, I have been asked about legals. It may or may not be known to members that some years ago in effect the Snowy Hydro was taken away from the Snowy Mountains authority, which was a commonwealth government authority, and handed back to New South Wales and Victoria. One of the consequences is that all the state environmental laws apply in that region. It is an alpine region of Australia. Also, the EPBC legislation applies up there. So, I can assure members that any suggestion that you can go around digging great big holes and knocking over trees and otherwise interfering with wild rivers up there—

Mr Marshall: What about your bill?

The DEPUTY SPEAKER: Order!

The Hon. J.R. RAU: —is fanciful. Hazelwood—I am allowed to talk about that because the Leader of the Opposition talked about it.

Mr Bell: You said it is going to be good for South Australia.

The DEPUTY SPEAKER: I don't believe the member for Mount Gambier is saying something.

The Hon. J.R. RAU: It's just gas. He has gas.

Members interjecting:

The DEPUTY SPEAKER: Order! Back to the nub of the debate.

The Hon. J.R. RAU: Hazelwood is a terrific yarn. There we have this large antiquated power station in Victoria that is 53 years old. The owners of that power station had the choice: do we spend money and make it all nice and shiny to run it for another 15 or 20 years or do we decommission the thing? What makes sense? What makes sense at the moment, given the uncertainty of the environment, is what we are seeing: they are turning it off. They are turning Hazelwood off.

Members interjecting:

The DEPUTY SPEAKER: Order!

The Hon. J.R. RAU: Turning Hazelwood off has nothing whatsoever to do with renewable energy. Turning Hazelwood off has a lot to do with whether you reinvest hundreds of millions of dollars in a plant that is 53 years old when you do not know what the future looks like. That is what Hazelwood is about.

The interesting thing is that last week, or the week before, the opposition were berating the Premier and the Minister for Energy about why there was not some intervention to keep the Northern power station afloat. Northern power station should have had government intervention to keep it afloat.

Members interjecting:

The DEPUTY SPEAKER: Order!

The Hon. J.R. RAU: And, interestingly enough, I have an answer to that question, which is not my answer. It is from none other than the man from Snowy River himself. The other day, Mr Abbott, who often is very helpful in public discourse these days, got up and said to the Prime Minister, the man from Snowy River, 'Why don't you get in there and keep Hazelwood afloat?' For those who are not following this, Hazelwood is an analogy for Northern. 'Why don't you get in there and keep Hazelwood afloat?' That is what Mr Abbott said.

What was the response from the Prime Minister? The Prime Minister said, 'We're not doing that. That's outrageous. What a stupid suggestion that is,' and he knocked Mr Abbott about (metaphorically, of course) for saying such a foolish thing. There, not from me, from the Prime Minister of Australia, who is one of theirs, is what he thinks of their answer to the Northern power station. That is what he thinks of it.

Here we are, back on this very progressive plan. This plan is all about taking control for the people of South Australia of our future in terms of the supply of electricity. We have here bold intervention by a minister who is going to act in the interests of South Australia, not be content for a bunch of people chomping on cigars somewhere in the Eastern States to work out where the biggest profit margin can be made by the generators and not be concerned about whether turning on another power plant here will drop the price from $14,000 per kilowatt hour down to $200 per kilowatt hour and actually cost them something in terms of profit.

The minister will be looking after people having the lights on. Quite frankly, the people of South Australia are more interested in having the lights on here than whether or not some of the people involved in the generation market get to make a super profit. That is what the South Australian public want. They are not interested in super profits for an oligopoly of generators.

Mr Bell: How about super spin?

The Hon. J.R. RAU: Spivs—exactly, good word. They are more interested in seeing direct action by the state government. I strongly applaud the Premier and the energy minister for taking these bold steps because this is what the public expects the government to do: to intervene, to do something positive and to do something to make a difference for the people in South Australia. So, I for one will be strongly supporting this bill. I think this bill is terrific.

Members of the public who have spoken to me have said, 'This is exactly what we expect the government to do.' They want a government to take action. They do not want a government to sit back and say, 'Oh, well, do what you like to me, market.' They want a government to take action and take control, and that is what this bill does, so I strongly commend the bill to the house.

The DEPUTY SPEAKER: I go now to the member for Stuart, who is the lead speaker.

Mr VAN HOLST PELLEKAAN (Stuart) (12:07): Yes, thank you. Let me say first of all that the opposition will not oppose this bill going through this house, but we will consider it in great detail between the houses. It will not surprise anybody here to know that, essentially, we have no choice but to take that position.

We want the very best for all South Australians, but we were given absolutely no notice that this bill was coming into this place—none whatsoever. We were not even given a copy of the bill and there was no discussion between the whips. There was no advice whatsoever that this was happening. Do you know why that has happened, Deputy Speaker? Because the government is running scared on this issue. The government is running scared on this issue and they are trying to rush it through this parliament.

This bill is actually a plan for failure. The government is doing nothing that it says is actually going to fix the electricity crisis, which it created. The first thing it brings into parliament is a bill that seeks the right for emergency intervention powers for the failures that it predicts lie ahead of us. How absolutely ridiculous is that? What is worse is that they want the Minister for Energy to have those powers—the same minister who created the mess. This is the same minister who, on 21 October this year, will have been the Minister for Energy for six years.

He has been the Minister for Energy for 5½ years at the moment, soon to be six years. He is the one who has created the problem, along with all his government colleagues. They want him to have the authority to fix the mess. This is a plan for failure. It is an absolutely disgraceful situation. The government should be out there trying to fix problems so that they do not occur in the future, not giving themselves power to call emergencies in the streets of South Australia when the problems continue to occur, as clearly they predict will happen.

Absolutely none of this was necessary. After 15 years of Labor government and another year to go—do not worry about us, but I hope for all South Australians it is soon to be over—the government has created these problems, first under premier Rann and, secondly, under Premier Weatherill. They have created this absolute mess. It is not as if they were not warned; the government was warned.

The government was warned back in 2009, when it had a renewable energy target of 20 per cent and was contemplating moving that renewable energy target up to 33 per cent. It paid for external advice from two different consultants and asked those consultants, 'Tell us what might happen if we go from 20 per cent to 33 per cent.' The government was told by both consultants, 'Don't do it.' Both consultants said, 'If you move from a 20 per cent to a 33 per cent renewable energy target, you will destabilise the grid, and when you destabilise the grid you have wildly fluctuating prices and risk blackouts.'

They were given all of this advice. They received this advice and within a very short period of time moved from 20 per cent to 33 per cent anyway. There is no record of any other advice that contradicts the first advice. There is nothing that the opposition has been provided with by the government under freedom of information requests that says that it received any different advice that overruled the first advice. The only advice they had was, 'Don't do it,' and they did it anyway. They were warned; they were well and truly aware of where they were going. Subsequent to that, the government has moved from 33 per cent to 50 per cent renewable energy target, and that has made things much worse.

It is interesting that the government says that Danny Price of Frontier Economics is an independent person of national repute who supports what they are doing at the moment. Let me read you a quote from 25 January 2016, when Danny Price said on radio:

It's fine if people want more renewable generation that's all okay, it's just that it costs a lot more. It's more unreliable and it costs a lot more.

This is another quote from the same radio interview:

The options that South Australia have got are very limited now…simply because the Government keeps on driving towards a greater quantity of more expensive generation as part of their policy. The…South Australian government is to blame for electricity prices, not things that are outside their control.

This is the same person who the government says is a respected national economist and expert in energy. It is a shame that it did not listen to him back in January 2016. It is a shame that the government did not listen to the warnings that it received way back nearly 10 years ago. It is a great shame that the government seeks advice and that, if the advice does not suit its own political imperatives, it then just drives ahead and does what the government wants to do anyway in contradiction of that advice.

Do you know what the great shame about that is? All South Australians suffer. All South Australians are labouring under the highest electricity prices in the nation and the most unreliable electricity in the nation. Do you know what the worst part of it is? We have the highest unemployment in the nation. It is no accident that they go together. In South Australia, our largest electricity consumers are also our largest employers, so this goes right to every single household in the state.

There are households suffering from outrageously high electricity bills, suffering from blackouts and suffering from the fact that they do not have an income from a job coming into their household. The government has knowingly created this problem. Now what does the government want to do about it? The government wants to spend $550 million of taxpayers' money—keep in mind that South Australian taxpayers and electricity consumers are all the same people—and we have heard the Treasurer on the radio say, 'That's okay. Don't worry about where the money is coming from. We've got surpluses in the forward estimates, so you don't need to worry about the money.'

Those surpluses in the forward estimates belong to South Australians. This is not the government's money, it is not the opposition's money and it is not the Treasurer's or the Premier's money. That money belongs to South Australians. The government is going to spend South Australians' money to fix a problem that the government created for South Australians.

This electricity crisis that we are in at the moment has, conservatively, already cost our state half a billion dollars—$500 million just in the last 12 to 18 months. It is not very hard to add up numbers in excess of that. So, roughly half a billion dollars created by the government's policy and now the government wants to spend in excess of another half a billion to fix it. That is just absolutely ridiculous.

I heard the Leader of the Opposition refer to a comment by the Premier in a radio interview when the Premier said he gets bored easily. Maybe this is his recipe for his boredom: create a massive problem and then challenge himself to fix it. That might be okay for him, that might be okay for the government, but it is no good for South Australians who are caught up in all of this. Every single South Australian, from the smallest household to the largest employer, is suffering under the mess that the government has made.

We know this government is responsible for this mess for another reason as well, another reason shared with us by the energy minister. The energy minister, not very long ago, came into parliament (in question time, I think it was) bragging about the fact that the South Australian parliament is the lead parliament in the nation when it comes to energy policies. He was bragging about the fact that South Australia had experts advising it, experts who have contributed to South Australia leading the creation of the NEM.

The energy minister's words at the time were, 'We built it.' That is what he said: 'We built it.' Now, of course, the government wants to blame the NEM. Now the government says it is everyone else's fault. It is the federal government's fault, it is the Victorians' fault, it is the retailers' fault, it is the generators' fault, it is the NEM's fault. The South Australian government has created this issue and the South Australian government now wants to be given the authority to oversee emergencies when they occur. As I said, this legislation is a plan for failure.

We have seen, very recently (I think it was Friday), AEMO put out a report forecasting that over the next two years there will be 125 days when South Australia will not have a sufficient reserve supply of electricity. That reserve supply is an amount of electricity determined by AEMO itself. In fact, it is 570 megawatts under an LOR1 rating. Just to be clear, AEMO is not saying that we are going to have blackouts on 125 days; it is saying that on 125 days in the next two years we are at great risk of a blackout. It would mean that if something outside of the forecast went wrong then we would not have enough electricity, our reserve supply would not be sufficient.

Maybe it is a bit hotter than expected, maybe a generator is not available when expected, perhaps the interconnector is not available when expected, perhaps there is an unexpected weather event, or perhaps the government dreams up another energy policy unexpectedly and that creates all sorts of problems, too. AEMO is saying that on 125 days over the next two years we are at risk. Let me tell you, we will have blackouts, very unfortunately for South Australians, for South Australian households and for South Australian employers, whose businesses risk going belly up if they do not have electricity and cannot produce their goods on time and on cost, as they have committed to do for their customers.

Those businesses are at risk of going under. If those businesses go under, those businesses cannot employ people. If they do not go under and business gets tougher and tougher, they will employ fewer people. This goes right back to every single household in the state. That is why that is such an important issue and that is why we in the opposition are so frustrated with the government but so determined to fix this issue. We are determined to contribute to fixing it from opposition, and determined to contribute to fixing it from government, if we are elected.

The Liberal opposition has put forward many very positive and constructive suggestions. We have said all along that of course we need to have a sensible, well planned transition away from fossil fuels towards renewable energy. For anybody from the government to try to paint us as opposed to that is completely false and flies in the face of everything that myself, the Leader of the Opposition and my colleagues have said on the record very publicly.

We know that we need to make that transition. We want to make that transition, but we also know we cannot make that transition overnight in an overzealous, philosophical approach by the government trying to paint itself as ultra green and ultra good for the environment and hoping to pick up extra votes from that. We know that what actually needs to happen is for it to be done in a sensible, well planned and well managed way—not to try to do it overnight in a vote-grabbing exercise as the government is trying to do and has been trying to do for over a decade now.

We said very clearly, when it was obvious that government policy was going to force the closure of the Port Augusta power station, that they should not do that. We do not want coal burning in South Australia for ever and ever, but we do know that reliable base load electricity of any form is imperative to make that transition. Until we can store renewable energy at scale we must have fuel-generated base load reliable electricity being generated in our state. We do not want coal for ever and ever—far from it—but we know that we needed to have the Port Augusta power station operating for two or four or six years (or whatever the right amount of time is) longer than the government allowed it to operate, so that we could have that sensible, well planned and well managed transition.

The government has very seriously impeded that transition. It has made it tougher than it needed to be. It has significantly extended the time frame of when we can actually get to it by taking that base load electricity out of the market and by forcing through its policy in the closure of the Port Augusta power station. Not only did the government policy force the closure of the Port Augusta power station, but the government very deliberately rejected approaches from Alinta to keep their power station operating for a while. The government has done everything it possibly could to refuse the opposition access to any of that information.

I put a freedom of information request in in May 2015—that was after being rejected and rejected and rejected. Finally, the Ombudsman said, 'You cannot reject this any longer. Take it to court if you don't want it.' At the last possible minute, the government released that information with enormous amounts of key detail blacked out. So, the government released information and said, 'Yes, an offer was made back in January 2015 by Alinta to try to keep the power station open.' However, it is continuing to refuse to share any detail whatsoever with the opposition about what the offer was, the details of it and how it was constructed.

They have refused to give us anything through freedom of information, despite many requests for well over a year and a half to try to get that sort of detail. They just refuse to give it. Do you know why? Because they are ashamed of it. They are ashamed of that information. But do not worry, Deputy Speaker, we will eventually get there. The Ombudsman, I am sure, will eventually—it might be months or years from now—force the government to share that information. The government could easily have contributed to easing the burden on South Australians, but it deliberately chose not to by forcing through its policy of the closure of the Port Augusta power station.

When Alinta went to the government and said, 'But if this happens, these will be the really serious consequences for the state,' the government said, 'That's okay, we don't care. Bad luck, we're not going to help anyway.' I say again: I am not suggesting the Port Augusta power station should have stayed open forever, but it should have stayed open temporarily to make that sensible, well planned and well managed transition.

There are other positive things that the opposition has contributed. We have said very clearly that wind farms are fine and renewable energy is fantastic, but that there are only so many of them that we can have in this state until the energy they generate can be stored and then dispatched on demand, as necessary. We are way beyond the saturation point whereby we can create electricity when it is windy or when it is sunny and hope that the market will accept it at that point in time, but also not accept it and hope that, in fact, the market does not need it at another time when it is not windy and it is not sunny.

We know that renewables are fantastic, absolutely right, but there are only so many you can have until you can store them, otherwise you have too great a share and your generation throughout the state becomes intermittent. Some of it intermittent, fine, no problem at all, but you get beyond a certain point where too great a share of it is intermittent and that starts to destabilise the market, and that is the advice the government got way back in May 2009 and chose to ignore.

So, through that we have said that we should have an electricity market impact assessment statement attached to every new wind farm development application, keeping in mind, as the energy minister very often likes to say, that the federal government provides the renewables subsidies to the builders of wind farms, but the state government provides the permission to develop. The state government is the one that says, yes, a development application can proceed, or rejects it. The federal government provides the financial subsidies, but the state government controls 100 per cent how many of them are built in South Australia, and they have approved too many, and that is clear for everybody to see by the destabilisation of our market.

We are not saying no more wind farms; we are just saying that every wind farm development application should have a market impact assessment statement attached to it. For example, if a wind farm can show that it is going to be built in a different corner of the state where it has a wind resource that blows at a different time from the rest of the state so it will put electricity into the grid at a different time from the rest of the wind farms, we would say, 'Fantastic, that would be great: more renewable energy at a time when we need it, not more renewable energy at a time when we don't need it.' We have been very firm that the government must not allow any more base load generators to leave until we have this large, grid-scale storage, that the government cannot allow any more base load to leave the state.

We have said that Australia must have one jointly agreed, between the federal government and all the states, renewable energy target. It does not make sense for different states and the federal government to all have different targets. Some are developed quite sensibly with regard to what is appropriate for that state, some are essentially just bidding wars for green fancy. Some of them, which are pushed way, way too high—far, far beyond anything practical—are literally just out there so the state government can say, 'Oh, look how green we are, look how special we are; please vote for us', which is certainly what has happened in South Australia.

We are not saying that it should be an incredibly low target; we are saying that there should be one jointly agreed target across all the states—one country, one environment, one target. It does not make sense to have different ones when the states, particularly in south-eastern Australia, are all interconnected through the National Electricity Market.

We have said for a very long time that the government should support, and in fact incentivise, the development of large-scale battery technology. We have some really smart people in South Australia and some very high capacity companies in South Australia that are really good at this stuff, and they need to be helped. I am not suggesting that we do not share this information with other states, the rest of the nation or the rest of the world—far from it, we would want the opposite—but we want to support and incentivise South Australian companies to contribute to the development of large, grid-scale storage options that unlock all that renewable energy so that it can be generated when the wind and the sun allow it, but it can be stored and then dispatched on demand. We have been right there, right from the beginning of this debate, suggesting that that is what has to happen.

Another thing we have suggested very positively is that we must utilise the spare generation capacity we already have in our state. We already have surplus capacity. We do not need to go off and dream up new ways of creating electricity: we need to start to use the generation capacity we have at the moment, not because—and this is very important—we are opposed to new ways of doing it (that can come), but if we can utilise the spare capacity we have in our state at the moment we can help solve the problem immediately. The capacity is already here, so let us enable it, let us start using it straight away.

Let us not wait for new technology, let us not wait for new generators, let us solve the problem today and use the capacity that we already have in our state. We have been contributing constructively and positively to this debate for a very long time and we will continue to do so. We have regularly released policies in the energy space. We will continue to do so. After the next state budget, we will release a fully comprehensive policy. That will be much closer to the next state election, but we will not stop contributing in many ways to positive, constructive debate on this topic between now and then.

The government's suggestion, which they announced two weeks ago to the day, includes large-scale batteries. We have been supportive of that all along. Whether the government is going to do it exactly right, we will just wait and see what comes back from their tender, but we have been constructively and positively supportive of large-scale batteries for a very long time.

We will see what the government actually decides to do in that space. The government has also announced a peaking gas power plant. As I was saying just a few minutes ago, we have five open-cycle gas turbine peaking plants in South Australia already—one at Hallett, one at Mintaro, one at Penola and two in metropolitan Adelaide—and they operate under capacity. We should be doing what we can to get them engaged before contemplating building anything else.

One great concern about the government's suggestion to spend $360 million of taxpayers' money on building a new peaking plant is that the government cannot tell South Australians whether they have included in that the operating cost. Is that all capital and some other operating costs are still to come, or is that partly capital and a certain time frame's worth of operating money is included in that? They do not know. They cannot tell South Australians. Does that include the gas pipeline to get to the plant? They have not thought about it; they do not know that.

The government, of course, will say, 'We'll wait and see what tenders we get back.' They have thrown out that they want to have 250 megawatts and they want to have $360 million spent on it, but they do not know exactly how it is going to work. That flies in the face of statements made by the Premier and the energy minister many times in this place when we asked for some of the detail. We ask, 'What is it you are actually going to get for the money you've said you are going to spend?' or 'How much are you actually going to spend to get the product that you've outlined you want?' They say, 'We can't tell you that. That could disrupt the market. We're going out to tender.'

I have heard the energy minister say many times, 'We don't want to signal how much we're willing to spend on this project.' Guess what? That is exactly what they have done this time. They have said that they want to spend $360 million of taxpayers' money for a 250-megawatt gas peaking plant. It is extraordinary that the government would so often say that they cannot provide those details because it might thwart their efficient expenditure, but apparently on this occasion it actually does not matter.

The own-use contract is another component of the government's program. They are offering their 480 gigawatt hours of electricity (I think it is; I need to check this number) for the government's own-use contract to a private generator—75 per cent for a new generator, 25 per cent for a renewable generator. The government's own-use is approximately 4 per cent of the market, so I am not sure how they think that, by offering 4 per cent of the market, they are going to change the whole generation market in South Australia.

Let them have a go, but this is not new. This is something the government announced last September. Last September, they said they were going to do this, but then two weeks ago they tried to reintroduce it as part of their grand new plan to solve the energy crisis they created. Let's see how that goes, and I hope it works, but it is definitely not new.

Another component of the government's plan announced last week is $24 million of taxpayer money to subsidise the exploration and development of new gas resources. That is not new either. That was announced in October last year, I think. What they have done is decide that they are going to have another component. That was new two weeks ago. So, they are now going to spend another $24 million of taxpayers' money to help solve the problem that the government actually created.

Another component of the government's plan, announced two weeks ago, is an energy security target. That is not new: that is just the government wrapping up a price on carbon with a different set of words. I heard one of the government speakers talk about it as if it were a fault of the opposition for not wanting another tax from the South Australian government on the people of South Australia. Guess what? Whichever member of the government said that is absolutely right: we do not want another tax on the people of South Australia, not at all.

We are completely in support of reducing pollution. We are completely in support of a well-planned, well-managed transition away from fossil fuels towards renewable energy in a sensible time frame, to get there as quickly as we can without making every South Australian household and business pay a completely unsatisfactory price, as is happening at the moment. We are fully in favour of supporting our environment the best way we possibly can, but not through a tax.

Those last three components—the government's own-use contract, subsidy for new gas production and a tax on carbon—half of the things announced two weeks ago by the government, which it says are part of that solution to solve the energy crisis that the government created, are not new. Half of them were already out there.

The last component, the sixth component, is the one the government has put on the table today—the Emergency Management (Electricity Supply Emergencies) Amendment Bill 2017. As I said before, that is a plan for failure. That is exactly what it is. This is the government saying, 'We know we've created this problem, we know we can't fix it any time soon, so we want to have emergency powers to deal with these issues when they occur, as we know they will.'

In the last two weeks, since this government's plan was announced, the Australian Stock Exchange forward base contract prices have gone up by, I think, 7.65 per cent. We have heard the energy minister say, here in this house, that the very best indicator of future electricity prices is the ASX forward base futures market, the prices that the ASX actually publishes. There are other deals done, but nobody other than the buyer and the seller have access to that information. The only information publicly available is this ASX information, and the energy minister has said that is the best indicator of where electricity prices are going.

Guess what? Comparing the most recent information available at the moment with the information available immediately before the government announced its plan two weeks ago, prices have gone up. So the market, buyers and sellers, have looked at the plan—these are capable, smart, intelligent and well-resourced organisations, that have their electricity trades listed on the ASX—and have said, 'Oh, we'd better start buying at higher prices now than we were offered before the plan was announced, because we don't think it's going to work.' That is what the information tells us. That is the market saying that the market does not think the plan is going to work.

To be really fair about this, if you look at the increases—I think one month was a 25 per cent increase over two weeks and one month was a 30 per cent increase over two weeks—they are in the next few months, and nobody could expect the government's plan would have an impact in the next few months. Those are trades that have been done based on the failures of government policy up until the plan was announced. Those were deals that were done where consumers willingly bought electricity at 25 per cent and 30 per cent higher than the prices available in the market two weeks ago. They willingly did that. That is all based on the failures of government policy before the plan was announced.

Let me take you to prices released by the ASX for March 2020. I need to check this number because I was not prepared for this debate, because the government brought it on, but for March 2020 I think there was an 18 per cent increase. I think there is at least one consumer—a large consumer—who, since the government's plan to solve the electricity crisis, which the government created, was released two weeks ago, has said, 'To purchase electricity three years from now, I will pay 17 or 18 per cent more than I would have before the plan was released.'

What does that tell you about the market's response to the plan? The market does not think that this plan is going to reduce electricity prices. When the Premier is asked in press conferences or anywhere else, 'When is this plan of yours going to start to take effect? When will South Australians see lower electricity prices or fewer blackouts?' he cannot say. He is not really sure. He says some aspects of it might be in place by next summer and some will not be in place by next summer. Guess what? The market thinks that in three years' time this still will not help. The market now thinks that electricity will be more expensive in three years' time than it did two weeks ago, just before the plan was released.

Another interesting component of the plan is hidden pretty deep. It is not one of the six headline components of the plan that the government put out in the main, easy to access part of the documentation, which is the only information the vast majority of people would read. This component of the plan is diesel generators.

How absolutely ridiculous is this? We have a government that says it is putting South Australians through all this pain so it can be clean and green and save the environment. It says that it wants to reject the warnings it gets from its external consultants that say, 'If you do all this, you are going to create a lot of pain for South Australians.' 'It doesn't matter. We don't care. We are going to do it anyway because we want to save the environment,' says the government.

The government then releases its six-point plan because things are going so catastrophically badly. After costing the economy well in excess of half a billion dollars, it says it is going to spend another half a billion dollars trying to fix it all and then, deep down in the plan, it actually says, 'Since we are not really sure if or when this is going to fix it, we are going to import diesel generators so that we can help South Australians in the meantime.'

How ridiculous is that? It is absolutely preposterous. This government has created a problem. It has cost the economy well in excess of half a billion dollars. All South Australians, from the smallest households to the largest employers, are paying an outrageously high price. The government says it wants to do this to save the environment and be clean and green, but now it is going to import diesel generators because the plan may not work at any time and certainly will not be working anytime soon. This is ridiculous.

The government coming in here with this bill, giving absolutely no notice to the opposition that it is going to debate it, is a sign that it has absolutely no faith in itself. The government was not willing to go through the standard procedure and table a bill and give everybody the opportunity to read it and look at it. The media would know about it. The opposition would know about it. We could ask for government briefings in good faith. We could go to external advisers and get advice. The government did not want any of that to happen. It does not want anybody to know about it.

Either the government is ashamed of this bill or there is another option: it expects these powers to be necessary. It expects to have to use these powers before the normal time that would have elapsed—a few weeks or a month—to go through the normal consultation and debate process. I guarantee you, Deputy Speaker, we would have said to the government, 'We understand how important this is; we will go through it quickly. We will get advice quickly. We will deal with it quickly.'

The government must think it needs these powers tomorrow or the day after for it to have tried to rush this through, giving the opposition, the public and the media absolutely no opportunity to deal with this bill properly. Not even the whip was consulted. Not even the Opposition Whip was told, 'This is the plan for today. This is what we are going to do. We are going to throw the schedule that we have on the Notice Paper out, and we are going to do this.' The government has tried to hide this and the government should be ashamed of itself.

The opposition takes this issue so seriously that we will not oppose the bill in this house. We will do all our due diligence and we will get advice. We will do everything that we possibly can on behalf of South Australia to go through this bill appropriately, thoroughly and diligently. We will not oppose it today, but the government should be ashamed of itself.

The Hon. P. CAICA (Colton) (12:45): Fancy that, Madam Deputy Speaker.

Mr Duluk: Fancy what?

The Hon. P. CAICA: Fancy having to follow that diatribe.

Mr Duluk: I like to hear it.

The Hon. P. CAICA: I know you like to hear what he said. I know that, and I understand that.

I rise to support this bill, and I think it is a very important component of the plan that we have for South Australia. We have a plan for South Australia to make sure that our energy is available at all times when it is needed. That is what this plan is about. Why has this plan been developed? Because it is needed in the absence of anything else that exists at both a national level and throughout the rest of Australia. There is a vacuum, and that vacuum is the lack of policy, the lack of direction and the lack of security with our energy market. Despite what has been said by the opposition, it is not of South Australia's making that we find ourselves in the position we are today.

I am sick of all the people who say that we have invested too much in renewables and that that, as a result, has created a problem with the marketplace. That is nonsense. Without being too rude—and I know we are not supposed to use the word 'lie', but mistruths and untruths are being perpetuated in regard to the impact of renewable energy in South Australia. This very—

The Hon. J.M. Rankine: Deception.

The Hon. P. CAICA: 'Deception' is a very good word, and I will continue to take some advice on the powers of the English language from my good friend the member for Wright.

The DEPUTY SPEAKER: There should not be any interjections or response to them, should there?

The Hon. P. CAICA: No, there shouldn't be, but on this occasion there was, and for that I apologise. This is a very important component of our plan, and it will give South Australia greater local powers over national market operators and privately owned energy generators.

To date, we have found that the way the national system operates is that, as we recently witnessed in February this year, power is shed. It was unnecessary, and it did not have to be shed. Not only was it shed but, to rub salt in the wounds, it was extended to another 60,000 people for some mystifying reason. Then again, we have the nerve of those opposite, perpetuated by our media and the Prime Minister, claiming that the reason for this is renewable energy. It is a bloody nonsense. It is a nonsense, and people are not going to buy that out in my electorate or in other electorates. But what they will buy is a government that is standing up to do something about ensuring that we have security of electricity supply.

For the information of those opposite, this plan has been very well received in my electorate, and I am sure that it has been received well in other electorates, for two very good reasons: first, it is a plan that will ensure that we do have reliable electricity, and, secondly, it is a government that is standing up to make sure that we are going to ensure that there are electricity suppliers for all South Australians, that the lights stay on. It has been received very well within my electorate, and I am sure that is the case in other electorates.

It has also been very well received by businesses. The opposition has said that businesses have not supported this. Well, they have. I have not heard too many people who know their stuff in this area suggest that this is a plan that will not work. The plan will obviously work a lot better if there was some leadership at the federal level. The bill we are debating today is a very important component of securing our energy future, and it is a very important component of what I think is a very good plan.

As I said, my electorate supports renewable energy, and it will continue to support renewable energy. Indeed, I am very proud to be a member of a government when, in 2007, South Australia was the first Australian state to legislate a specific target to reduce greenhouse gas emissions. I was very pleased that South Australia was the first Australian state to sign an international agreement to limit global warming to under 2° Celsius. I am very pleased that in 2015 the state government and Adelaide City Council committed to Adelaide becoming the world's first carbon neutral city.

It was not that long ago when Prime Minister Malcolm Turnbull was holding up South Australia to the rest of Australia—indeed the rest of the world—to see how well it had done in reducing its carbon emissions through the introduction of renewable energy initiatives. Now, of course, he is deriding that and saying that this is the problem that has been created with respect to the intermittency of these renewable energy sources, which, of course, is a nonsense. He has changed his tack absolutely, utterly and completely.

We saw a reinforcement of that when Mr Frydenberg, the federal energy minister, came out and straightaway talked about an intensity emissions scheme, which is a price on carbon, and was thrown directly and immediately under the bus by the Prime Minister. Finkel, of course, was then required to adjust his interim report in such a way that that is removed from it. You can be deadset that it is not going to be included in the final report that is coming out in either late May or early June.

What I can say is that Frydenberg was right, and previous to Malcolm Turnbull changing his opinion he was right, that we need, for the sake of the security of our marketplace and the security of our investors, a price on carbon, in whatever form that might be, that provides security to investors and certainty to investors. Last time, I remember Malcolm Turnbull also signed the Paris Agreement, didn't he?

An honourable member: Yes, I think you're right.

The Hon. P. CAICA: He did, that's right. I notice that my friends down there are nodding in agreement, so it is Malcolm Turnbull who signed the Paris Agreement, which of course puts a significant obligation on Australia to reduce its carbon emissions. How are we going to do that? Has Malcolm come up with any idea, other than the fact that into the federal chamber they bring in great big pieces of coal and say, 'This is the future'? It ain't going to occur in the absence of some price on carbon, some policy by the federal government about how it is going to—

Members interjecting:

The Hon. P. CAICA: Clean coal—there is no such thing as clean coal.

Members interjecting:

The Hon. P. CAICA: Yes, that's right: they wash it with soap and that's how it becomes clean coal. It is just a nonsense and, because of the policy vacuum that exists at the federal level, and because of the policy vacuum that has existed with respect to being able to get any form of bipartisanship with the opposition here, the state government is intervening. Earlier, I heard the very good contribution by the Deputy Premier about governments in the marketplace. Like everyone, I believe in the marketplace, but when the marketplace fails the government has no choice but to intervene in that marketplace. There have been a heap of examples where that has occurred.

The opposition says that we should be hanging our head in shame. Well, in this chamber, the only person who is probably hanging their head in shame, in the afterlife, is this chappy up here—Sir Thomas Playford.

An honourable member: His party.

The Hon. P. CAICA: His party not showing any leadership on energy at all and blaming other things, like renewable energy, for the position we find ourselves in. I will tell you how we find ourselves in this position today. We find ourselves in this position because those opposite, back when they first took government, sold and privatised ETSA. Not only did they sell what ought be in the hands of the people of this state but, by increasing the price that they were able to get for that public asset, they did not agree to what should have been an important component, an additional interconnector.

They did not agree to that because, of course, they wanted to maximise the price of that public asset that should have stayed and still be in the hands of the public. What are the most important things in our lives? Water and electricity, the fundamentals of life, and they should be in the hands of the state. They are not, and they are not because you over there sold them and now we have to deal with what we have and not with what we wish we had. Part of that is making sure that we have a plan in place that, in turn, is going to ensure that we have safe, secure and reliable electricity and power generation for this state.

This is to give, as I mentioned earlier, powers to the energy minister. It is a bit rich for the lead spokesperson over there to say that the reason this is coming in is that we expect to use these powers in the next couple of weeks. I do not think that will be the case, but I will tell you right now that they will be there when it is required that they be used. We have a prime example of when we could have used that, and that was when the unnecessary load shedding occurred in February this year.

The National Electricity Market is broken, I believe, and needs to be fixed. We alone cannot fix it, but what we can do is have a plan to ensure that we can fix our component of it. The national market needs to operate nationally, but it does not. The opposition spokesperson talked about different states being at different levels with respect to renewable energy. That is going to occur because some states have started earlier than others, but they are at different levels because there does not appear to be any clear direction from the commonwealth government about how the marketplace ought to operate, how it can manage it and the role it should play in managing that marketplace.

We have talked about the Finkel report and minister Frydenberg getting tossed under the bus, and the opposition leader is waiting for that report. The opposition is always waiting for something. I have heard consistently through this debate that both he and the shadow spokesperson are saying, 'We have constructively and positively contributed to debate in and on this issue.' I say they are kidding themselves.

You have not contributed in a positive way whatsoever. You have a plan called '2036'. The people of South Australia do not care what is going to happen in 2036 and, if they do, they want to see the road map by which you get there. There is no road map from the opposition's perspective about how we are going to get to what they say in that flimsy document of theirs, '2036', about what South Australia is going to look like. What they care about is the here and now. They care about the here and now, and what they care about is making sure they have reliable electricity supply, and that is what we are going to deliver through this plan.

The opposition also talked about wanting to work with this side of the chamber on these issues. I have not ever really seen that. I will give two examples. The Murray-Darling Basin Plan was one where this state stood up and fought for South Australia, but in fighting for South Australia we fought in turn for the health and wellbeing of a system which is the lifeblood of Australia.

Mr Pederick: You forgot about $25 million for the Diversification Fund. It's true.

The Hon. P. CAICA: What is actually true is that when we were fighting the commonwealth government, both the Labor federal government and the state government, to get the best deal for South Australia in the system, what was the opposition saying? We would be satisfied with a Mazda. We are the Mazda, and that is how they like to work with us, caving in to their federal colleagues and not to fight for what is in the best interests of South Australia.

Marine parks: could we get any agreement from the opposition on marine parks? The whole world was going to cave in. We were going to ruin recreational fishing, we were going to ruin commercial fishing. That was not the case, but what did we see from the opposition? No intent or no ability to work with the government on what was an outcome that was important to South Australia—just the same as the Murray-Darling Basin Plan, just the same as the development of a proper electricity plan for this state.

The Hon. T.R. Kenyon: Boats.

The Hon. P. CAICA: Boats was another one. I know that oppositions live for whingeing and carping and all this type of thing, but the reality is that what the opposition wants more than anything else in the world is to get over here. I am going to leave this parliament having had one day of opposition. How on earth can they say how bad we are when they have not been able to get anywhere near being on this side?

I will tell you right now that the next election is going to be tough. It is probably going to be tougher than any we have fought in the last 16 years, but they are not giving anyone in this state reason to vote for them. That has always been the case. They have been assisted this time around as well. I will not go there for too long. But if you whinge and carp hard enough, then you might get some outcome that says this boundary redistribution might help you. I am not sure it is going to help because I still think that the people of South Australia are going to see through how shallow and hopeless the opposition is. I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 13:00 to 14:00.