Bills

Emergency Management (Electricity Supply Emergencies) Amendment Bill

Second Reading

Debate resumed.

Mr WHETSTONE (Chaffey) (12:25): I rise to speak on the Emergency Management (Electricity Supply Emergencies) Amendment Bill. It has all been said before, that is, there seem to be three certainties in South Australia: life, death and blackouts. It is disappointing to see the lack of bipartisanship on this bill and I have real concerns. As many on this side have previously mentioned, no bipartisanship was shown. There was no brief, there was no notification and it was clearly rushed into the parliament, and a briefing was provided to the opposition only after the bill had been introduced to the house. Really, how genuine is this government about a genuine energy policy after the crisis they have created?

We all hear the continual blame game, that it is everyone else's fault, but the state government has now been exposed, particularly with the release of the AEMO report confirming yesterday that the loss of power and the resultant blackout in South Australia, particularly on 28 September, was caused by nine wind farms being tripped unnecessarily. This was instrumental in causing damage to our businesses and to our economy, and it would not have happened had it not been for the trip out on the wind farms software.

With regard to South Australia's reliance on renewables, yes, I think we need to head down the renewable path but, as has been stated many times before, it is all about the timing of the transition away from fossil to renewables and how South Australia has been up-front about it. But they have also used the South Australian taxpayer as a guinea pig. They have used the economy as a guinea pig. Emerging businesses, exporters, stablemate businesses, all the SMEs, all the households and every South Australian taxpayer have been used as guinea pigs in the government's obsession with the quickest possible route to renewables, which will be the most costly. It is all now coming to roost.

Today, it has also been revealed that the secret deal, the letter that was revealed today to keep the Port Augusta power station open, is just a crime. Back in 2015, that letter stated that it would cost about $25 million to keep open the power station as well as the Leigh Creek coalmine to mid-2018. I see that as a transitional period where we should not be actually running around like flustered chooks trying to get any form of battery storage onto the agenda, any form of gas-fired power generation onto the agenda, but not going to the other market and putting out a tender to have some power generation. The cheapest price possible would be of greatest benefit to every South Australian taxpayer.

It appears that the Premier and his Minister for Energy are obsessed with control, they are obsessed with their centralisation approach, they are absolutely obsessed with ripping off every South Australian taxpayer and every South Australian business. Every South Australian who wants to be a South Australian and remain in South Australia is paying the price for a dodgy, ill-fated energy plan in South Australia.

In terms of the energy policy and, as I have just said, that letter in May 2015, the impact would be to trigger a $150 million blowout to regional GDP plus 450 jobs. The Premier said, 'Well, let's just do it.' Of course, that is right! Regional South Australia is not the government's core voter base, is it? I forgot about that. Let every South Australian be aware that the $450 million hit in that blackout cost the South Australian economy and also our reputation. It cost every South Australian the grace of being a proud South Australian to now to being the butt of jokes. It beggars belief.

Every South Australian needs to carefully consider what they will do next year, in March 2018, about whether they are prepared to put up with more secrecy and the most expensive power prices in the nation and whether they will put up with uncertainty and the lack of ability to expand their businesses. SMEs are trying to expand and employ more people. What they are doing now is investing in power generation. They are not looking at their core business and how they can employ another one, five, 10, 50 or 100 people; they are now looking at how they can invest further in keeping the lights on, keeping their power on and keeping affordable, reliable power generation for their businesses in South Australia.

Yes, as I said, we all agree that renewable energy is part of our energy mix now and in the future, but is the government really focused on stable supply at an affordable cost and is it trying to reduce power costs? The $550 million for the power policy that was just announced by the government is like feeding the chooks. They have thrown some information into the mix, and this is what has been spat out. They will put up a new gas-fired power station. It is a pity they have not negotiated a tender at Pelican Point, or Torrens Island. These peaking plants are there for the taking, yet we continually see the government wanting to take control and build new power plants.

It is all very well to stand up and say that we want to have the biggest battery, some are saying, in Australia or, others are saying, in the Southern Hemisphere. Why are we looking at this? Why are we not looking at going out to the free market and looking at ways that we can have this power generation with the existing infrastructure? Remember, it will be South Australian taxpayers who will foot this bill once again. We have already footed the bill for the loss caused by the blackouts, and we are now footing the bill of the government's ill-fated power policy. No transitional arrangements were given to South Australians, when it comes to this obsessed Premier and his minister, to hit the 50 per cent renewable target sooner rather than later.

Yes, the government has been in for 15 years, and this is a situation that has been slowly coming at them. Advice has been given to the government not only from the opposition but also from industry, and they continually ignore it. They have been warned, they have been given advice, they have been given the tap on the shoulder to warn them that this is what is going to happen and this is what they need to tackle in their push for renewables, but it has fallen on deaf ears.

In 2009, the renewable target was 20 per cent, and the contemplated move for a renewable energy target of 33 per cent happened sooner rather than later. However, they paid for external advice from two different consultants who told them that this was not going to happen. They were warned over and over by the opposition. I think the government was quite slow to act on it because, of course, they had power contracts in place.

Every other business in South Australia was going through the process of negotiating new contracts, and it was as plain as the nose on your face that these new contracts would see significant increases in the cost of power. Of course, what does the government do? They increase their target. They increased it to 50 per cent. Obviously, the government is not listening. They are making policy on the run, and who is going to pay for it? Every South Australian is going to pay for it—not just South Australian businesses and not just South Australian households but also South Australia's reputation is paying dearly.

What I am concerned about is the $550 million that South Australians are now going to have to guarantee with the installation of another gas-fired peaking plant—the biggest battery that the country has ever seen. This is all coming at a cost, and it is all matter that is being smeared over an energy policy here in South Australia to the detriment of South Australians by a government that has no clear direction and is not prepared to listen to the industry, not prepared to listen to friendly advice and not prepared to listen to anyone who has credibility on the board.

The Liberal opposition has so far put forward a number of constructive suggestions. We will see what the opposition's energy policy will be after the budget, and I hope that every South Australian will be waiting when that comes along, because what we have seen is Rafferty's rules when it comes to a 15-year government with this scattergun approach on energy policy that is half-baked, half thought out and not utilising the current infrastructure that we have in place.

One of the other things I am extremely concerned about is what is happening here in South Australia. What is happening to business confidence? What is happening to our competitiveness? Who is paying for the mismanagement of government energy policy? Who is actually paying the price? Again, it is about being competitive. Yes, it is about our business, it is about our exporters, but it is really about what is going to be a barrier to the reliability and the efficiencies that we need to be competitive.

We need to be competitive with Victoria, New South Wales, Western Australia and Queensland when we are dealing with markets, but we also need to be competitive with every country in the world because that is where we want to send our products and where we want to engage with our growing export economy. It is also about creating investment opportunities here in South Australia, and that is currently not happening. I would like to touch on some of the real-life examples of what is happening here in South Australia. I will touch on a couple of businesses in the great electorate of Chaffey in the Riverland.

We have one of the largest water distribution companies in the country, the Central Irrigation Trust. It is bearing the brunt of a $1.3 million increase to its electricity bill over the next 12 months—that is a forecast, we are not talking about the already coexisting price of electricity increases. It is a forecast increase. They are paying 30 per cent more for their electricity in the 2016-17 year than they did for the previous year. The increase will see trusts managed by the CIT operating at losses—about a half a million dollar loss in the 2016-17 financial year, instead of an expected surplus of about $121,000.

If power costs remained at the current levels for the 2017-18 year, the trust would have to increase water consumption prices by 15 to 30 per cent. That cost is being passed on to every irrigator and every household in the CIT districts. This is not something new. CIT and Riverland irrigators using electricity to pump water have been battling these high prices for six to seven years. The CEO of the Central Irrigation Trust has met with government and industry and has forecast these increases in prices, the impact on these businesses and the impact on our economy, and yet it has fallen on deaf ears.

We look at Riverland irrigators trying to compete with Victoria some 20 kilometres away. From 20 kilometres away, you can almost see your neighbour who is paying nearly half the cost of power. From 20 kilometres away, you can almost throw a rock. The member for Mitchell has a strong arm, so he might be able to throw a rock and hit an irrigator in Victoria. Let me tell you that they are paying nearly half the cost of power. Where are the efficiency gains from operating a business in South Australia? There are none.

We look at one of the great new emerging commodities in horticulture: the almond industry. Almondco, one of the great South Australian exporters, have been given numerous awards in recent times. They have just invested $25 million in New South Wales for a new hulling plant. Why did they go to New South Wales? I can tell you why. The main reason is that the cost of electricity in New South Wales is far cheaper than it is in South Australia. A hulling plant is very energy hungry, so Almondco have gone to New South Wales and invested their money over there.

We look at diesel generation. I feel that South Australia is going to be one of the diesel capitals of the country, generating power. Not only do we have the government bringing diesel generation into the state just in case, to stop blackouts and stop the embarrassment, but we have large irrigators, large wineries, the small IGAs and the industry support growers and irrigators all starting to import diesel power generation so they can pump water when they have to.

We have to remember that we have been through a drought, we have been through the Murray-Darling Basin Plan and we have been through growers having to find more water efficiencies, but finding water efficiencies makes your business more power hungry. The reason it makes it more power hungry is that you have to irrigate when the plant needs the water.

Going from broadacre or broad irrigation methods to limited, restricted irrigation methods, such as strip irrigation, means that the plants are now watered by pulse irrigation, so they are watered many times a day. In some instances, they are watered five, six or up to 10 times a day. The reason they are irrigated like that is so that they irrigate the plant when the plant needs the water. The plant needs the water in the heat of the day, and the heat of the day is when we are having all these issues with reliability.

We are having issues with blackouts. We are having issues with keeping the state alive and with keeping high-tech horticulture alive. We cannot say we are going to turn the pump off because the price of power has just hit $1,400 a kilowatt hour on the open market. What we have to do now is put in diesel generation to make sure the plant is getting watered when it needs the water, and that is of real concern.

I know the owner of one of my larger wineries at Kingston Estate has been forced to install diesel generators at a cost of nearly $0.5 million. While he is investing in diesel generation, he is not investing in expanding his winery. He is not employing more people. We look at the IGAs up in the Riverland. They are facing power bill increases of more than $100,000. Almondco, again, are not only investing interstate but are now bracing for a $250,000 jump in their annual electricity bill.

We have the Waikerie Hotel. Here is a picture for you, Deputy Speaker. The Waikerie Hotel lost huge amounts of money during the last power blackout, so what have they done? They have now imported a diesel generator to supply power when the power goes out in South Australia. They have that generator, and the only place where they could fit it was on the footpath. When you drive past the Waikerie Hotel, they have diesel generation on the footpath.

I am also very proud to have one of the country's state-of-the-art new packing plants for citrus and stone fruit. What they have had to do is bring in diesel generation to run their pack house. It has the world's leading state-of-the-art packing equipment with a diesel generator bolted into it out the back. How is this happening?

I have another almond grower who has just had to invest $300,000 in a one-megawatt power generator on the river to generate power so that he can pump water when he needs it, and he is not alone. There are many pumpers who are now investing in diesel power generation. I think it is outrageous that in South Australia we have irrigators, food producers and exporters who, instead of investing in their property and the future of their business, employing more South Australians and making South Australia a better exporter, are investing in diesel power generation to guarantee power supply. It really does smack of hypocrisy.

We have a premier who wants coal to be gone. He keeps referring to coal as a bygone era, yet we are now importing diesel generation and we are now putting more diesel into tanks to create power. I am sure that diesel generators from all over the place will smother South Australia in CO₂ emissions. We will see more diesel-fired power generation than ever before coming up to this summer, particularly in the Riverland, and I think that is a sad indictment on a South Australian government that has been in power for 15 years. It is time to change.

Ms WORTLEY (Torrens) (12:45): I rise to speak on the Emergency Management (Electricity Supply Emergencies) Amendment Bill. Recently, I had the opportunity to speak to people in my electorate about energy supply in South Australia and about our energy plan. I have held street-corner meetings, visited shopping centres and been out doorknocking. Importantly, I listen to what my constituents have to say and, on the issue of energy supply, many tell me that they are pleased the government is taking charge and putting South Australians first.

So it is that I am pleased to be standing here today to be part of a government that is taking control and introducing legislation that empowers our state, a government that is looking towards the future and will protect people and businesses who depend on a reliable electricity supply by taking ownership of our energy future and ensuring that South Australia becomes more self-reliant for its power supply. Under our energy plan, South Australians will have more reliable electricity supplies for future generations to inherit, increased competition that will put downward pressure on electricity prices in South Australia, new jobs created for South Australians and a cleaner and greener South Australia for future generations.

In my discussion with residents, there has been a strong message coming through, and that message is that the federal government has long since stopped caring about what happens to our community, what happens to our state. We saw an example of this during the storm events last September. Many South Australians were rolling up their sleeves and helping storm affected residents at relief centres, while emergency relief workers mopped up the storm damage at houses and properties. Then, by way of contrast, we saw the Prime Minister seize upon this unfortunate situation for his own purposes, all the while making trite and unhelpful statements about renewable energy targets.

The events of last September, a super storm with 80,000 lightning strikes, had a significant impact on our state. Power had not yet been restored to all households across South Australia when our Prime Minister made his ill-considered remarks. The federal government jumped straight into a blame game before the facts were clear, before emergency services workers had ensured the safety of residents or surveyed the extent of the damage. If it was not already abundantly clear, a line was drawn in the sand over that week in September. It clearly showed the federal government for what it is: a government that does not care about the welfare and wellbeing of South Australians.

We have seen it with the refusal to honour the Gonski funding for our schools and we have seen it with the severe cuts to health at the federal level. While people were mopping up their flooded houses and market gardeners were assessing their damaged or destroyed stock, we had a prime minister who chose political mudslinging over leadership and compassion. The Liberal-National Coalition government chose to play politics while a very serious situation was unfolding in our community.

At no time did the federal government look towards bipartisan policy solutions or even consider having a rational discussion. Meanwhile, from Queensland to South Australia, significant changes have been occurring in the National Electricity Market. In the past five years, nine coal-fired power stations have closed, and the 10^th—Hazelwood in Victoria—will cease operation this week, yet there have been no clear national policy settings and little to no investment to replace the thermal generation that has exited the system.

We know that the price of electricity has increased dramatically over a short period. We know also that there are a number of reasons, including an absence of leadership at a federal level, gas shortage and, of course, a lack of competition. These pressures are being felt across the nation, as energy prices increase to levels that are unsustainable and uncompetitive. While renewable energy is growing, we have a responsibility to ensure investment so we can build the next generation of technologies and store renewable energy and then dispatch it as required.

Additionally, last year's extreme weather events tested the system, with parts of the transmission and distribution networks repeatedly damaged and the national market now widely considered to be failing and in urgent need of reform. So, recent events have proven the need to fast-track South Australia's energy transformation. It is the South Australian government that will lead in this area, rebuilding confidence and ensuring reliability of electricity supply in our state.

While speaking to residents over the past few weeks about our vision for energy in South Australia, and highlighting our plan that will benefit South Australians now and into the future, one of the things that received a big tick is our state having greater local control of our own energy security. From the 1940s, South Australia's electricity supply system was owned by and run for the people of the state. It was known as the Electricity Trust of South Australia. Then, in 1999, the Liberal government sold the generation, transmission, distribution and retail arms of ETSA to the private sector under 100 or 200-year leases. The privatisation of our state's energy assets has placed an enormous amount of power in the hands of a few companies.

The Weatherill state government has a plan: it is taking charge to source, generate and control more of our power right here in South Australia. In the Premier's words:

It is an energy plan that delivers more generating capacity, greater competition, increased public ownership of assets, more renewable energy with battery storage, more gas supplies and more job opportunities for South Australians.

It is a plan that gives the state government the legislative power to direct companies to turn on their generators during extreme weather events. Our plan will make our power supply more reliable, put downward pressure on prices and create jobs.

South Australia's energy plan will deliver for South Australians. South Australia has built a strong reputation on its clean, green environment. The energy plan will deliver Australia's largest battery, built in South Australia, to store renewable energy and enhance stability. Batteries capture energy generated by the sun or wind on a large scale, so it can be provided at peak times when demand exceeds production.

The state government will also use its bulk-buying power to attract new electricity generation and increase competition, thereby placing downward pressure on prices. The government's plan includes building our own gas power plant and this will remain in government hands and will be on stand-by so that power is available to South Australia in an emergency. The government will also offer incentives to source more gas for use in South Australia; importantly, replacing coal-fired energy from Victoria.

Of course, part of our purpose for being here today is to provide a legislative framework so that the energy minister will have the power to direct the market in the event of an electricity shortfall. This important legislative tool will ensure that the interests of South Australians are protected. New targets will increase South Australia's energy self-reliance by requiring more locally generated, cleaner, secure energy to be available in South Australia. Investing in these energy initiatives will create new jobs for South Australians. Initial estimates plan for 530 full-time equivalent jobs to be created through the construction of initiatives outlined in our energy plan, and 100 full-time equivalent jobs will be created through increased gas exploration.

In addition to the recent announcement, over the past several years the state government has invested in programs to add to system security and energy efficiency measures for householders and business owners. This has included investigation into a new regulated interconnector, looking at how greater interconnection can ensure South Australia obtains more base load power when required and exports more wind and solar power.

In addition, $31 million over two years has been committed to helping large South Australian businesses manage their power costs. The government has also invested in making large schools more energy efficient through the installation of solar panels and LED lighting, sensors and timers, and work has recently begun to install 400 solar panels in Housing Trust homes across South Australia.

The state government continues to provide support to South Australians who are impacted by increasing electricity costs. The energy bill concession, Cost Of Living Concession, medical heating and cooling concession and the emergency electricity payment scheme continue to provide support to tens of thousands of South Australians every year. Quite rightly, South Australians regard electricity as an essential service. Labor's energy plan and subsequent legislative changes will give our state greater control of our energy security.

With our abundant natural resources, South Australia is leading Australia's effort to clean up its energy sector. We know that a mix of renewable energy and gas produces much less pollution than electricity generated from coal. Investing in renewable energy also creates jobs and is a boost for the economy. Indeed, investment in renewable energy has seen more than $7.1 billion invested in the state, with more than 40 per cent in regional areas. These investments have helped create new industries and jobs for many South Australians.

I look forward to continuing to speak with as many people as possible in my electorate of Torrens over the coming weeks and months as our energy plan to give South Australia greater local control gets underway. Our government's vision is to source, generate and control more of South Australia's power supply in South Australia so we can increase self-reliance and provide reliable, competitive and clean power for South Australians into the future.

Mr WINGARD (Mitchell) (12:57): I rise today to speak on this bill that has been rushed before parliament. I note with great interest the newspaper report today that really exposes the situation we have in South Australia and the turmoil and fiasco that have been created by the Premier. We see that the big bold plan that the Premier has put forward, worth more than $550 million, is in fact just a smokescreen for the inept operations of this government over the last 15 years.

In fact, we see that the truth has been revealed, that if the Premier had accepted a $24 million deal to keep the Northern power station open South Australia would be in a far better situation. The deal the Premier has put before the South Australian public is one of the biggest fiascos since the State Bank collapse in South Australia. We all remember what that did to our state and that is exactly what the Premier is putting before us right now.

The Premier had the opportunity to pay just to $24 million to keep the Northern power station open so that we could make this transition. The Premier, and the Treasurer for that matter, has no idea how to make this transition. Yes, the world is moving towards renewable energy and we all know that, but how we manage this transition will be the measure of this government, and they have failed and failed outright.

We know that this transition has to happen, and everyone is aware of that, but what happened when the Treasurer and the Premier drove the Alinta Northern power station into closure? The people at Alinta came to the Treasurer and the Premier and said, 'Look, we can help with this situation. If we close, there will be a massive rise in the cost of power in South Australia, which will be damaging to businesses, families and the prospect of jobs into the future. So, how about we work together on this project and we gradually exit the market so you can bring in new sources of power?'

Alinta said, 'We know that the renewable path through the solar and wind farms the government has gone down has created great intermittency in the marketplace and that there is no certainty of when power will be provided to South Australians if the sun is not shining and the wind is not blowing. We know of the problems with those renewable sectors as it stands.' In short, Alinta said, 'Let's do this deal together,' and the Premier and the Treasurer said, 'No, you can stick it up your jumper.' I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 13:00 to 14:00.