National Energy Guarantee

Mr VAN HOLST PELLEKAAN (Stuart) (15:14): Supplementary, sir: given the Premier's rejection of the reliable energy guarantee in his last answer, does that mean that the state government withdraws its previous support for the Energy Security Board?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (15:14): The Energy Security Board is a creature of the COAG Energy Council. It was established out of a recommendation in Dr Finkel's report. It was one of the 50 recommendations. We supported its establishment, and indeed I understand that this parliament will soon be considering its establishment under statute. What the member confuses is support for an institution and support for a policy.

Where I think the Energy Security Board has done itself a massive disservice already is that, whereas the Finkel inquiry—which was commissioned by the COAG with the chair of the COAG, minister Frydenberg, recommending names to establish that inquiry like Dr Finkel, the Chief Scientist, and the people who operated on that inquiry—was done in a collegiate way, what occurred here was that the Prime Minister and his energy minister wrote to the Energy Security Board, which is made up of a chair and a deputy chair and of course the bodies that make up AEMO, the AER and the Australian Energy Market Commission, and they developed this policy on behalf of the commonwealth government, not on behalf of the COAG.

What we have found out since is that that policy had no modelling, that policy has not been tested, that policy will not be creating certificates for reliability—

Mr Marshall: So you're saying the Energy Security Board did no due diligence on this?

The Hon. A. KOUTSANTONIS: No, I'm saying the Energy Security Board is saying that.

Mr Marshall: Sorry?

The Hon. A. KOUTSANTONIS: The Energy Security Board is saying that. They're the ones who are saying that they have done no modelling. They're the ones who are saying they don't know what the impacts of this are going to be. They're the ones who are saying they don't know whether this will reduce prices or not. Importantly, the fundamental difference between this and every other mechanism that has been established thus far is that other mechanisms worked on the basis of generators generating certificates.

This will be a legal requirement placed on retailers to purchase not certificates but power from certain types of generators. While ending what the Prime Minister calls his $66 billion worth of subsidies for renewable energy, he is transferring that subsidy to coal-fired generation because he would be requiring retailers to purchase that power regardless of price—regardless of price, on the basis of a security and reliability standard. What that means—and we don't know what the impact for South Australia will be—is that regardless of your dispatch cost, and the National Electricity Market is based on lowest cost dispatch, what the Prime Minister wants us to adopt is that we will dispatch power regardless of cost but on the basis of reliability.

What does that mean AGL can do at Torrens Island if they are going to get dispatched regardless of what price they charge? What does that mean for South Australia to be forced to buy their power? But again this is all a bit much for a party where the best they could do was not even develop a policy that was better than the do-nothing option.

Mr Pederick: Keep the lights on.

The Hon. A. KOUTSANTONIS: There you go. That's the level of the intellectual debate from members opposite.

An honourable member interjecting:

The Hon. A. KOUTSANTONIS: There it is. The do-nothing option actually gives you a better outcome than the policy developed.

The SPEAKER: Treasurer—

The Hon. A. KOUTSANTONIS: Thank you very much, sir.

The SPEAKER: Treasurer, I don't want to capon you, but would you please not respond to interjections.

The Hon. A. KOUTSANTONIS: Well then, sir, maybe interjections could not be made.

The SPEAKER: I call to order the Treasurer.