Hydrogen and Renewable Energy Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

The Hon. B.I. BOYER (Wright—Minister for Education, Training and Skills) (16:05): I am pleased to rise and have the opportunity to make some comments regarding the Hydrogen and Renewable Energy Bill. I must say that I enjoyed spending some time in the chamber yesterday and this afternoon listening to contributions from other members of this place around what is, of course, an incredibly exciting area of not just technology but public policy as well and one that I have followed with great interest.

I thought perhaps it would be an opportunity for me here today to make some comments around not only the significance of the bill that is before this place but also the significance of hydrogen as an alternative fuel and the enormous potential upside for our state in my capacity as the Minister for Training and Skills.

A number of members, including the member for Newland, have focused their comments in this debate around workforce needs, training needs, and it is certainly something we have been focused on in our first 18 months in government, that is, what we can do as a state government to help incentivise our public both for-profit and not-for-profit training providers to offer the qualifications needed to build the workforce that will be required for this very large election commitment the Malinauskas Labor government has made.

As is often the case in this portfolio for which I am responsible to the house, we try to maximise the number of South Australians who can access the enormous job opportunities that will present themselves as part of a shift to hydrogen in South Australia, in terms of both domestic use and export potential, which is something else that a number of members who have contributed to this debate have spoken about.

We have an aspiration in South Australia of moving to 100 per cent renewable generation by 2030, which is a pretty incredible thing to say, but the gains this state has made over the last couple of decades, in terms of growing its generation and use of renewable energy, are something we are rightfully proud of and something we speak about proudly on the international stage, just not the national stage.

When I speak to family and friends interstate and we talk about issues around renewable energy and I talk to them about the amount of renewable energy produced in South Australia and the targets we have already set over the last few years and met and exceeded, the reaction from those people interstate is really something to behold. It is something that all jurisdictions have been talking about for a long time now. We have not been just talking the talk in South Australia; we have been walking the walk for a long time.

I was pleased and proud to be a member of the then Malinauskas opposition that made such bold election commitments in a number of areas, I must say. I am the beneficiary of those in terms of the minister who gets to deliver upon them in the education, training and skills portfolios. The commitment around hydrogen that was made really is incredibly significant. As I said, I am proud to be a member of a team that made such bold election commitments in areas that are not just important for our state but are part of a global shift to decarbonise as well.

I have been fortunate enough to hear the Premier speak on a number of occasions around hydrogen. I am not sure if there is anyone better, although I must say that the members for West Torrens and Port Adelaide are also very adept at explaining. The Premier does a very good job publicly of breaking down how a hydrogen plant would work, how energy is produced using it and how it can be stored and exported. It is a very technical thing, I must say.

I remember thinking when we had these discussions when still in opposition that, although this is an incredible election commitment and something that absolutely a future Labor government should do, it would be difficult explaining it on phones, at doors, at street-corner meetings and in shopping centres because it is incredibly technical and it is a new and emerging technology, which makes that conversation all the more difficult.

Most recently, I saw the Premier speak about it at the country cabinet community forum that we had in Mount Barker, which had the biggest turnout I have ever seen at a country cabinet—600 people, I think. I have been attending them in different capacities since 2011 and I have never seen a crowd like that. The Premier gave a pretty impassioned speech and a very good explanation to a very large and diverse crowd about why hydrogen was important and why we are so well placed in South Australia to access it.

There is a very important part of that speech that the Premier gives that talks about South Australian history, in terms of how Eastern States—Queensland, New South Wales and Victoria—have had the upper hand in terms of access to traditional fossil fuels buried in the ground and how they used those to build their economies over centuries.

We did not have those in South Australia to the same extent, so did not have the same natural advantages here, but we are at a place in history and a time in history now where, with an abundance of wind, for instance, and sun and available land area, we have natural advantages over and above some of those Eastern States and an opportunity now to capitalise on that and to put ourselves ahead to set us up for generations to come, just like those governments in Queensland, New South Wales and Victoria in years gone by did with the investments they made in traditional fossil fuels.

As I said at the beginning of my remarks, it is an exciting time to be talking about these things. Of course, we were leading the way with the giant battery in Hornsdale. The conversations then were akin to the ones we are having now around explaining to the public why hydrogen is so important and some of the fundamental conversations around how hydrogen energy is created, how it is captured and how it is transported. It reminds me of some of the conversations we had when we were talking about the Hornsdale battery.

Of course, the world has changed a lot since then. We know that the pace of change has increased, particularly in terms of technology. The growth in the capacity of batteries in all applications has been exponential, but it did not feel like that when we first announced our ambition to have the world's biggest battery a number of years ago.

I remember some of the conversations I had at the time and they were met with, I would not say derision, but a bit of disbelief around whether or not this was serious policy, whether or not this could be achieved and whether or not it was really practical that a relatively small state like South Australia could actually create the world's biggest battery and that it could actually make a really genuine and significant difference in our energy network.

You know what? Here we are. It is no longer the biggest battery in the world, of course, because we were early adopters and all those other jurisdictions hopped on it as well and created their own big batteries and are using those, but it has been a really important part of the energy network in South Australia. It is something again that we should be proud of because we took a stand on something which at the time was not without controversy. There was an emerging technology, one that I think particularly older members of our community struggled to get their heads around because it was new, it was different, and in some respects that is a bit akin to where we are now with the conversation around hydrogen.

I guess what I will say in terms of this bill is that we should look back to the time around the conversations we had as a state with the introduction of the Hornsdale Power Reserve, or the big battery, and some of that scepticism which, as some time has elapsed since then and now, shows was misplaced. It was a very wise investment that has played a very significant role in the South Australian context, and we should keep that front of mind when having discussions around why we should be investing in areas like hydrogen.

There are also the comments the Premier has made around this being a moment in time, with Australia but also the world moving to decarbonise, moving to make significant and ambitious targets around how much renewable energy will be generated and used in their jurisdictions, that we not only acknowledge the natural advantage we have here but we also acknowledge that if we do not act now we run the very real risk of missing the opportunity we have as a state to lead the way.

We know that one of the big challenges in terms of the hydrogen election commitment made by this government is its delivery. It is an issue that we face in a whole range of sectors right across Australia at the moment. In fact, I joined the federal Minister for Skills and Training, the Hon. Brendan O'Connor, just yesterday at Urrbrae TAFE, where we talked to the media around this government's commitment for new fee-free TAFE places.

Minister O'Connor made the comment (and I am paraphrasing) that the list of professions in short supply not so long ago, and I think it was within Minister O'Connor's time as minister, has grown from something like 153 listed as officially in high demand and short supply to something like 280 in the space of 12 or 18 months. That just goes to show the magnitude of the task we have in front of us in terms of growing the pipeline of skilled workers for all those industries that are crying out for them—of course, hydrogen is one, electrotechnology—and making sure that we have that steady supply of the qualifications and workers who will be needed to deliver on that commitment in Whyalla.

I thought I might take the opportunity here today to talk about some of the things we are doing to try to make sure that we do build that workforce. One of the things fresh in my mind, because I spoke about it at the awards just last week, is around a commitment we have made in conjunction with PEER—one of the very well-respected, not-for-profit industry training providers in South Australia—and supporting them with a mobile van, essentially, that will go out to provide training in different areas in the electrotechnology space.

PEER are one of the biggest if not the biggest TAFE trainers of sparkies in South Australia. They do an incredibly good job and we have supported them to do that because we know, particularly in the context of hydrogen and where the plant is going to be built, that we want to make sure wherever it is possible to build a local workforce, instead of running the risk, which we have seen in the minerals and resources sector, of a fly-in fly-out workforce, which of course is a great opportunity for those workers to fly in to a mine site and earn a very good wage and then fly out again but does not necessarily flow on to the local community in which the mine is located.

Of course, that is front of mind for us as a government in terms of the hydrogen commitment in Whyalla to do whatever we can to make sure people looking for work, whether they are entering the workforce for the first time or looking at a career change, have the opportunity to access the qualifications that they need to get one of the jobs in areas like hydrogen as a way of boosting employment in that local community as well.

I would hark back to what I mentioned a few moments ago in terms of fee-free TAFE positions. Within the first 12 months of the Malinauskas state government coming to power and within what I think would have been about seven months of the federal Labor government coming to power, I joined Minister O'Connor at the Tonsley innovation precinct, and we announced a one-year National Skills Agreement because we knew that the pressure was on already in terms of doing what we could as a state government to deliver more skilled workers for all those industries in short supply.

Rather than waiting to negotiate a five-year agreement, straight off the bat we announced a one-year agreement that included twelve and a half thousand fee-free positions in South Australia. Ten and a half thousand of those were for TAFE SA and 2,000 were for other training providers, not-for-profit and for-profit. I think it was one of the biggest cohorts of those fee-free places given to providers other than TAFE in South Australia.

We made a conscious decision to do that because we knew that, being a smaller state in terms of population, if we were to truly make inroads into the skills crisis that we have nationally, it would take all the different parts of our skills and training sector pulling together. For that reason, we made sure that we included some other providers in that initial twelve and a half thousand. I can tell you that, within the space of 12 months, all twelve and a half thousand basically were accessed, which is fantastic news.

Yesterday, I joined Minister O'Connor to announce that there will be 15,000 more places across the next three years in a lot of priority areas. Of course, electrotechnology is one of those priority areas as well. We know, in the context of what I said just before around making sure that local jobseekers and regional jobseekers actually have access to jobs that are being created in those regions by projects like the Malinauskas Labor government's hydrogen plant, they need to actually get the qualifications they need to access one of those jobs.

We also know one of the barriers there, particularly at the moment with the cost of living biting right around the country, is that the cost of accessing those qualifications is a real and genuine concern and a barrier to a lot of those people being able to, for instance, get the quals they need as a sparky to access one of the many jobs that are available in that sector, including hydrogen. That is the importance of the fee-free model, to withdraw that barrier and make it easy for all South Australians who are, as I said, jobseekers or looking for a career change to access one of the training courses they need to get the job they are looking for.

Those cost-of-living savings in terms of what is being waived through the fee-free model are really significant. In the case of a Diploma of Nursing, which is a two-year degree, I think if someone was to gain a fee-free position, the saving across the life of the two-year qualification is more than $11,000. Early childhood education and care, another priority area for this government with three-year-old preschool, is $5,000. These are large sums of money that we all in this place who engage with our local communities know would well and truly be a barrier in the current cost-of-living environment to accessing these courses.

There are a number of things in those areas that we are doing to make sure that we actually increase the pipeline of people coming in and taking up a course, which is part of the problem and part of the solution to addressing the skills crisis. But the other part, of course, is how we improve that completion rate. If we take into account all training courses, including apprenticeships nationally, the completion rate is still sub 50 per cent. When you consider the amount of money that both state and federal governments are putting in as primarily subsidies, so subsidising courses to make them more affordable in areas that those state governments view as priority areas, it is a vast amount of money.

If you look at the current efficiency of the system, it is not particularly efficient at all if nationally we only see roughly one in two people who go into a training course actually come out the other end. That is a big problem for the individual, but it is a big problem for business and for the taxpayers whose money is going in to offer that subsidy. We are doing a lot of work, we put our hand up in South Australia to lead, and I know that that will be a huge positive in terms of building the workforce we need here for hydrogen and all the opportunities it presents in South Australia as well.

Mr PEDERICK (Hammond) (16:25): I rise to make a contribution in regard to the Hydrogen and Renewable Energy Bill and note that this is a bill that seeks to regulate these projects under a one-stop shop system, and that is the very short version.

We are in a changing world, we are in a transitioning world, and we are in a world where coal has been demonised, yet we see in Victoria the Loy Yang coal plant near Traralgon lacking maintenance. I note the other day that plant had a big steel beam fall on a walkway because coal has been demonised so much that either people are not making the investment or the financiers are not backing it in. Yet we are a substantial coalmining country, a substantial exporter of coal across the world, and we still need it into the future, and they are talking about this plant having an extended life because we are not quite there with renewables.

ln regard to renewables, I have had solar panels on my farmhouse for many years now, and they are a great thing to export energy and keep the power bills down at home, but we still need base load power. Certainly, part of that still at the moment is coal and there is still a lot of gas in the system. As we transition, because gas is 50 per cent cleaner than coal gas it will be part of the system, some people say, for at least another 30 years. Gas is very much part of our life and part of our energy mix.

As we move forward, there are more and more solar projects coming on. Around Tailem Bend, there are at least 200 megawatts; there were 100 megawatts in already, and another 100 is not far off coming online next to the powerline that links South Australia through to Victoria and through to the rest of South Australia. These projects are going on around the state.

We have seen the work we did trying to get carbon neutral on our SA Water pump projects off the River Murray, pumping towards Adelaide, and I see those solar farms throughout my electorate at Mannum, Murray Bridge and other places. There are also wind farms around the place. There have been many debates in this house about wind farms and whether you can sleep, whether they cause problems or whether they cause health issues. That debate goes on.

There is a company called Tilt Renewables that is close—very close—after around 15 years to getting a project up around Palmer and Tungkillo and towards Mount Pleasant. This wind farm will traverse both my electorate and the member for Schubert's electorate. It was a project that initially had something like 100 turbines but now is being cut back to about 43, I think. I might have these numbers wrong, because I am speaking freestyle a bit, but the turbines were going to be about 160 metres high and now I think they are going to be about 240 metres high and they will cover about 5,000 hectares less.

With all these projects, it is a bit similar to mining proposals. Sometimes it is because people do not get the opportunity to utilise the payback period from having turbines on their property, because there is a lease that is a bit like a phone tag. You have a leaseback system every year that can be quite lucrative. Certainly, we have to take heed of the genuine concerns that I have had put to me by local constituents from across both my electorate and the member for Schubert's electorate.

I have met with Tilt and I have had ongoing conversations with them. They are based in Melbourne. I have been getting responses from them around the specific queries from constituents in regard to these wind turbines. Other people are quite happy that they are getting the opportunity to, I guess, partially droughtproof their properties through getting that leaseback plan on some wind turbines on their property.

Renewables will become bigger and bigger as we transition, and they are going to cover a lot more of the landscape, whether it be on freehold land, pastoral land or even offshore. We note already that there is significant opposition to the proposals in the South-East, with offshore turbines, and there is different opposition to various projects around the place.

Certainly, some of that opposition we see in the Eastern States is where there are transmission lines, like the project that we have built, most of it on our side of the border, EnergyConnect, the link through to New South Wales so that we can link our 70 per cent renewable power generation and the other power generation we have in this state if it is needed.

Essentially, the 70 per cent power generation we have in this state from renewables can be linked through to the Eastern States so that we can pump that excess power when we have it through to the Eastern States grid that we are linked to, right through New South Wales, Queensland, Victoria and Tasmania. Also, it is there to pull power back, if we need to, from gas-fired generation in the east, or Snowy Hydro or coal, because coal will play a part for a little while longer.

Also as part of the mix, we see the state government proposing the hydrogen sector at Whyalla and Port Bonython. I was looking at something the other day. It was the same year I started up at Moomba in the Cooper Basin in 1982 when the Port Bonython gas line went into play. It was interesting looking at those old photos and remembering the sidearms on the bulldozer, the track vehicles for laying pipe and welders out in the desert, essentially. They did some fantastic work those people—it was pretty well all blokes—working out in the sun and just getting those gas lines built.

I do have some concerns about hydrogen. We are told that the government has put up $593 million. I think it will need a lot more than that to get it going. We have already seen pullback from some of the storage that was going to be installed. I just wonder how much energy will be used from other forms—whether it is gas or something else—to develop the hydrogen. What did alarm me was we had a night here with some academics (and this is no reflection on them at all) and I was asking them about how this would function, and there were no clear answers. There were no clear answers, which shows how new this technology is.

As we move forward, there will be different rules and different regulations about putting these plants in place with release areas and prescribed areas. One thing that does interest me is the special enterprise licence, where there is a project of major significance and there cannot be agreement over whether the land can be purchased for whatever area is needed, whether it is for plant, transmission lines, etc.

I know that Minister Koutsantonis, the member for West Torrens, when he is talking about other projects does not like talking about compulsory acquisition. He is quite happy to acquire 540 homes for the Torrens to Darlington project, but then he does not like the idea of acquiring a bit of land to sort out the Hahndorf bypass properly. What this special enterprise licence will be is exactly that: it is compulsory acquisition dressed up as something else. Let's call it out for what it is. We will need to make sure that the appropriate regulations are in place.

What I see right through the briefing notes I have from the shadow minister, and he has done an excellent job going through the bill, is that there will be a lot of regulation put into this and not legislation. Obviously regulation comes in when we do not see it all. We can obviously do the legislation in this house and in the other place, so we need to be very mindful of how that goes about. As the member for Narungga stated the other day, he has had his concerns with mining land access, and he is having concerns with this, with the access for hydrogen and renewable projects.

I would just about guarantee that over time these projects will dwarf the amount of land impacted by mining in South Australia, and they are probably already heading there in a big way. That is the way of the world, that is the way we are going. We need to make sure that in regard to getting agreement with landholders, getting agreement on whether they are freehold landholders, and certainly in the pastoral lands, where there is a shared purpose between the government and pastoral lessees, getting agreement about how much rent will actually go to the lessees' pocket or whether it will just be a transfer from whoever the company is with this energy project going just straight to government, there is fairness and equity.

Obviously, these proposals are only going to go near the big transmission lines, so for anyone with a property of any size—it does not even need to be a huge property—next to a transmission line is the obvious place where these projects could go. We do have abundant sun and wind in this state, as we have proven with the rollout of the technology over time.

The thing that concerns me from everything I am hearing and seeing about the hydrogen project is that it will not bring down power prices in this state. We have recently seen power prices go up by about 30 per cent. I notice my new bill recently, notwithstanding having solar panels, has gone up significantly. That is hurting South Australians. With the cost of living and the cost of supplying power, everything is getting more and more expensive day by day.

We have issues with the network. We saw during the River Murray floods—from up in the Riverland around some of the bigger grape-growing areas, right through to my electorate to more horticulture, down to dairies and other farming down towards the mouth of the Murray near Goolwa—issues with powerline operation, powerlines being switched off and people having to find a way to generate electricity to keep their businesses going.

At times, we are told that this is a gold-plated network. Well, I can assure you it is not a gold-plated network. We saw that come into play the other day when 1,300 properties were switched off, in September around Ceduna and the West Coast. Yes, it was a nasty, hot, blowy, dry day, but what concerns me about this is that it was a proactive approach by SA Power Networks in case of a fire being lit.

The simple fact was that the green crop land was not going to burn anyway. As it was, and as the member for Flinders indicated on radio, there was a scrub fire that did get going, but as soon as it reached the edge that was the end of it. If that is going to be the way we manage our power systems into the future, that it is all about the perceived risk, these lines are not gold-plated.

SA Power Networks need to up their inspection—more accurate inspection—and I know they have indicated that they do more of that since it was privatised. I am not going to hear the argument from anyone saying, 'This has all gone bad since the electricity services were privatised decades ago.' But it needs to be a lot better than what it is. The simple fact is it has happened at Nangwarry in the member for MacKillop's electorate and, in the same electorate, the Yumali-Netherton fire started from dropped powerlines. There needs to be a better system in place, better inspection, better insulators and better systems put in to make sure that we can keep the lights on and the power on to make this state run.

We saw the recent conversation around the Country Fire Service—of which I am a proud member, and other members in this house are as well—looking at reducing the fire danger index which would take away hours of viable harvest time. That just hits farmers' pockets. I indicated earlier today that farmers are going through a tough time with stock prices dropping and they need every opportunity to get these valuable crops off. The harvest has started. A couple of loads have come in at Thevenard and Port Pirie in the last couple of days, so harvest is on, hay season is on, and farmers need the opportunity to get those crops off.

There is a perception that farmers are not prepared for fire. They have better equipment than they have ever had for fighting fires. They have chaser bins with up to 4,000 litres of water in a machine that is following the harvest—it could be 30 seconds behind. They have ex-CFS trucks in the paddock. They have big ex-military trucks in the paddock. They have 10,000 litre tankers, etc., standing in the corner ready to go, because those of us who live in the bush know that we have to hit it alongside the CFS to make sure we get the right outcome. Most of the time we do. Yes, there are some losses, but the idea is to obviously minimise the losses and minimise the loss of assets.

There will be a lot of questions asked in the committee stage of this bill about how the different licence forms are going to play out. I will be interested to see what the conversation is around the compulsory acquisition powers and that kind of thing. Even though some of this looks like it has been modelled on the Mining Act to a degree, we do not have compulsory acquisition in the Mining Act. It will be interesting to see where that conversation goes.

As I said earlier in my contribution, there is no doubt that we are in a time of transition, but it needs to be managed. We saw the chaos in this state when over 500 megawatts of coal-fired power got knocked down too early at Port Augusta. On 28 September 2016, we were sitting, working in this very place, and the whole state went out. We should never, ever see that again. In the management of power supplies across the state, not only do we have to get the generation mix right but we need to make sure that we can get that transmission to people's places right, because we would not expect 1,300 homes, or 20,000 homes in the urban area, to be happy about having their power switched off just because people thought the risk was too high. It just would not happen.

Yes, I do note there are some shocking days, but we need to find a better way to make sure that we can keep the electricity supplies running through the state. I will be very interested to see how the committee stage of this bill progresses into the future.

Mr McBRIDE (MacKillop) (16:46): I rise to speak on the Hydrogen and Renewable Energy Bill and, in general, really support the whole process that has been allowed to occur today in this parliament. There is a clause above it, that does not mean that I am fully cognisant and understand whether the production of hydrogen as an alternative to our old fossil fuels stacks up today, stacks up tomorrow or will stack up in 10 years. I think it is going to be brave governments and business leaders to do those sorts of investments and understand it better than I can.

I am actually quite pleased about this process. I will speak locally first, about my seat of MacKillop in the South-East, and talk about some large businesses, plus opportunities that we battle with in the area of energy. Before I go any further, and just covering off on what the member for Hammond talked about when he talked about lines, poles and infrastructure, which obviously transport energy around our regions, it is a really big concern when our infrastructure starts to fail and become of the age of 60 years plus. It is really hard to measure and manage and be forewarned of any sorts of accidents occurring, such as lines dropping to the ground because insulators are perished and beyond their use-by date.

I do share those concerns the member for Hammond has raised. It has happened around Nangwarry, and no doubt it could happen elsewhere to our ageing infrastructure. All I can say to any government, no matter the colour of their politics, is that we do need good infrastructure across our state so it not only transports energy but is reliable and safe to use 24/7, rather than switching it off because the winds might be too high.

Coming back to this bill in more direct terms, it gives the opportunity to license and allow the generation of hydrogen using renewable energy. Two of those energies obviously are solar and wind. In our neck of the woods, particularly during winter, the sun is not much of an energy opportunity for us, but certainly wind is. In the summer months, we do have more sunshine than in winter months, and we also have some large industries that would benefit from this type of energy base if it were allowed to stack up.

One of the businesses I am going to touch on is Kimberly-Clark, which is a large employer in my neck of the woods, on the southern end of my region near Millicent and Tantanoola. It is a pulp mill, it imports from overseas, it produces a world-class product of tissue paper in many forms and it transports that product all around Australia.

One of the things that has been a bugbear—and we have always tried to help and assist wherever we could through the Marshall years, and no doubt I will try to do that in the new Malinauskas years that are in front of us—is that we keep energy costs down to a minimum for Kimberly-Clark and, not only that, that we make sure, if there is an access opportunity for Kimberly-Clark to use hydrogen and renewable power to substitute its high need on natural gas, that we allow them to do so. This is all yet to be determined, about how much it can use in the way of hydrogen and natural energy.

We have the Lake Bonney wind farm there, which is one of the older wind farms in South Australia. The fans have certainly been superseded by newer and bigger ones, but I know that the wind farm now has a large battery on board. It is certainly not used to its maximum because the competition to access the grid is not as easy as it probably was when it first started. I know that we could benefit more from that production if we could get more of the energy used for the likes of hydrogen.

Another thing I want to touch in that area is Bordertown, a small community busting at the seams to build more houses and capture more business. The Minister for Housing, Nick Champion, is working with me on affordable housing, but one of the imposts for us in Bordertown is the lack of water and also the lack of power. Bordertown cannot even have its own solar investment in the town because the grid that supplies Bordertown cannot cope with excess energy being produced in Bordertown to go back into the grid. My understanding is that the general answer to developments in Bordertown is, 'No, you cannot put a solar farm or development here because the grid can't cope with it,' yet in Bordertown we have a diesel generator that has to be started because the grid does not meet the town's needs anymore.

A large and strong business in Bordertown is Blue Lake Milling, which has a methane capturing type model alongside the business to produce methane for power production. It certainly can and does meet the needs of Blue Lake Milling, but it cannot get it into the grid either because the contracts are too tight. So far, it has not worked as well as they were hoping to utilise that investment.

What may be possible for Bordertown, and this is only if this sort of infrastructure and these types of processes are allowed—and this is what the bill could help manage—is if a development of renewable energy were produced in Bordertown, such as solar, and they were then allowed to produce hydrogen. There would then be two outcomes. They could distil more fresh water, and the watertable that does not quite meet human consumption needs with its salinity levels could be desalinised down by about 20 to 30 per cent, and also produce hydrogen and also produce energy. That may be something that this type of legislation and regulations would allow for investors to participate in.

Another thing about the bill and how it has been explained to me, and we see it in the mining industry—and this is rather adventurous of the Malinauskas government and probably even adventurous for the minister—is to develop a policy where he does not want to see investment banking or land shadowing, where investments or rights to access sites and renewable energy type projects actually say, 'We'll do this,' but we actually do not. We sit on it and we do not allow other players to come in.

I think that is rather bold and I think it is rather positive, the way that land tenement, mining access and the Mining Act works now by locking potential developers and investors into minerals out of the game, because it has people with silent licences on land just waiting for that opportunity when someone might find something below the ground. Yes, it can work, but it is very opportunistic and maybe it is not that conducive to maximising benefit for the South Australian economy if there are players in that game who make it really hard for developments to take place.

If this legislation works well, in the fact that silent players cannot sit on their hands and lock away other investors and say, 'This is mine. You can only have this site, this idea, this model or this development if you pay me something for it,' then I think that would be a great outcome and maybe it will make South Australia more accessible for all the natural energy that may be out there in the way of sun and wind.

Another thing I would take liberty to speak on is the fact that I do have family interests in the pastoral regions. Our family has been farming in pastoral areas for over 100 years now and we have always welcomed and tried to work with mining companies for all the benefits they bring to our regions. They bring in population, roads, infrastructure, telecommunications, water and, in general, population for the benefit of others in such isolated circumstances.

Renewable energy is proposed in the way of windfarms and solar and perhaps even microcells, which I will touch on in a second. These big investments are talked about on Eyre Peninsula or 100 kilometres west of Port Augusta and beyond. I think there is a 1,200-fan investment looking at potential there.

I know that the pastoral property owners there are very excited by this proposal, and so are we as an owner of one of those properties out there, by the fact that this investment has to work with the Indigenous population and owners first and work through that process and then work through the access of pastoral owners and where the best site is for fans. Then there is the rental, the workers, the maintenance and the energy that may be created to then roll back into what I am seeing and hearing is a massive production site of hydrogen and energy heading towards either Whyalla or other developments. I am not quite sure where all that lands at this stage and, as I said, it is going to be people with a much bolder vision and expertise in this area than I to say whether it will work or whether it will not.

I certainly know that we as a human population are very clever. Technology keeps on changing and I think that when there is legislation rolled out like this, which allows for even greater uptake and opportunity, we all have to get in behind whoever puts their neck on the line. There used to be a saying: who dares wins.

Another area I want to touch on is these tiny microcells for our most isolated communities. I know there are engineering businesses out there—and I will just give an example—that would like to be able to set up little microcells of solar and wind producing renewable energy to produce hydrogen to produce power that would take away the small diesel generation that takes place now. The other benefits of this are that they would have potable water and energy and they may even have hydrogen for sale that would be sold in the near vicinity.

If you think long term, when we are talking about our own transport network in the future being driven on hydrogen, you could imagine going to the APY lands and they are totally self-sufficient in energy, water and hydrogen. You might drive up there and refuel with energy that is produced onsite, for example. This is the sort of technology they are saying is not that far away. It is possible and, obviously, it will not just be the APY lands but any sort of small, isolated pockets that warrant and have access to renewable energy that will be able to participate in these areas.

With that, I wish this whole process well. I think it is well intended. I think it is for the benefit of the great good of South Australia. As I said at the outset, I am not here to choose and pick winners as to whether hydrogen can outcompete and produce energy cheaper than the fossil fuels that we are trying to leave behind, but I will say that this process here and what I have seen and read and been told about is to make sure that we progress down the renewable line, unencumbered, without restrictions, and allow investors to have the best opportunity for benefits in South Australia as possible.

Mr BELL (Mount Gambier) (16:59): I rise to make some brief comments in support of the government's Hydrogen and Renewable Energy Bill. It is pleasing to see forward planning that will accommodate large-scale developments and the government actually being proactive, in terms of highlighting areas of Crown land or pastoral leases that may be suitable, and developing those opportunities in a thoughtful and constructive manner. I think it does put our state in very good hands to have potential proponents be able to come to the government or the government to put out to tender these projects, and that it be done in a systematic way. We are talking about large-scale developments where this will prevent an ad hoc mismatch of approvals perhaps in areas that may not be ideally suited or perhaps could have been done in other ways or in other locations.

I would like to highlight, and perhaps put front and centre in the government's mind, the idea of genuine consultation. When projects are being developed it is really important to engage meaningfully with communities. I have seen a number of large-scale developments where some have done that really well while others have treated it as a side issue or a box that needs to be ticked. When the community rallies against a proposal it can gather momentum to the point where it means that the viability of that project really comes into question, so social licence, community consultation is extremely important.

I would also like to reaffirm the weighting given to generation of renewable energy, and also hydrogen, in that there is an increased weighting for energy to be used in South Australia. Why I say that is that Mount Gambier and much of the Limestone Coast is in a cross-border region. We have developments where proponents wanted to develop in South Australia, on land or at sea in South Australia, yet the power is diverted or generated purely for use in Victoria. Whilst I am not against that if the project stacks up, I think the weighting needs to be for those developments to be supplying power into South Australia.

Probably the more contentious one around that would be South Australian waters—not federal waters; we are talking two kilometres out to sea being South Australian waters—and the delicate balance that needs to be struck between existing industries, in our case the crayfish industry, and recreational fishing that occurs within those state waters to make sure that it is managed appropriately and for the benefit of all users of South Australian waters, not just a proponent of renewable energy.

In closing, I keep promoting the South-East as an ideal place for hydrogen generation. When you think about it, putting electricity through fresh water to separate the hydrogen and oxygen atoms you of course need fresh water, and you need—if it is going to be green hydrogen—renewable energy. The South-East is abundant in both of those categories. It has more fresh water probably running out to sea every day than nearly any other part of South Australia, and with the renewable energy in solar and windfarms along our coastlines it has abundant renewable energy.

The other component that you need to have a hydrogen hub would be a major end user, and the South-East has those as well, with Kimberly-Clark being a big consumer of energy and then, into Victoria, Alcoa making aluminium at the Port of Portland. Of course, if you are going to transport hydrogen out of the country, you need a deep-sea port. Again, the Port of Portland provides that facility.

Whilst I applaud and certainly support the government looking at many areas across South Australia for hydrogen development and production, the South-East is ideally suited, along with other areas, for that hydrogen. This type of legislation will lead proponents who want to bring their dollars to South Australia to invest in South Australia with these developments, creating jobs and renewable energy, in particular hydrogen. I am very supportive of the government's direction.

Mr TEAGUE (Heysen) (17:05): I rise to make some brief remarks in relation to this bill. It was introduced into the house by the Minister for Energy and Mining on the Thursday of sitting 14 September, so just short of a couple of weeks ago. I might say it is a substantial bill, a substantial body of work that runs to nearly 100 pages. It sets out what would really be quite a dramatic change of scene affecting landholders across the state.

It will not come as any surprise that those of us on this side of the house really hesitate to speak too much and too soon about it, respecting as we do the views of those individual pastoralists in particular and those who represent them, because they are the landholders who are primarily on the receiving end of changes at the early stage, and also the views of those in industry that ought to be given a proper opportunity to have something to say about it.

I am glad to see that it seems the government and the minister have seen sense in what the shadow minister has proposed, that the matter ought not be further progressed in this place in the course of this sitting week and that we are at least given an opportunity over the coming weeks before proceeding further in any way, including to the committee stage. The shadow minister, of course, has made a substantial contribution to the second reading debate, and I, as other members have observed, thank him for the diligent work that he has done in getting to grips with what landscape this bill would provide for and what it would be covering.

Of course, you need look no further than Ross Garnaut's book Superpower to have an understanding of just what an enormous resource and opportunity South Australia has to lead and to thrive in the world of future energy. I commend Ross Garnaut's book to all in the house and Ross Garnaut's work and advocacy in this space. He is well known to all of us, and all sides of the house, and I know his counsel is sought by those leading in this policy area in not only South Australia but across the country, indeed globally.

You also have to recognise that you need to do no more than google 28 September 2016 to have a primary result come up straightaway, which is, 'Statewide blackout, South Australia, September 2016'. 28 September 2016 is a date that is going to be forever seared into the memories of South Australians who not only lived through those stormy conditions, it has to be said, through the spring of 2016, but the cataclysmic results that occur when you have a history of making your decisions about energy and energy infrastructure over a period of years whose vulnerability reveals itself when the weather comes along and presents some difficult conditions. It ought to be a salutary reminder to all of us here, as we are embarking upon what would be a very dramatic shift in terms of the way in which these energy investments are made, that there is a good way of going about it. There are also potentially catastrophic bad ways of going about it.

I have said a few times now over the journey in this place that not only were we faced with and having to deal with the statewide blackout—an unprecedented one; you do not want the eyes of the world on you for a reason like that—but, in the course of the balance of 2016, we had to endure extended blackouts through December and over Christmas, either side of Christmas. Again a substantial number of energy consumers in the state were facing a blackout in February 2017, so much so that what was preoccupying energy users in the Hills, in the area I represent in the hills of Heysen—large areas of which do not have the benefit of mains water—was a situation in which without power you therefore do not have running water, no toilets. The power has gone and within a few hours your mobile phone towers start to drop out, all of which in the course of the summer and the fire season leads to particularly heightened anxiety.

For those in industry in the Hills, in fresh produce and so on, it leads to the loss of product and very much a situation where around the meeting tables, the barbecues and even at home and in conversation in the community, the conversation turns to who has zeroed in on the best kind of generator that you really have to have for the inevitable unreliability of power that we have got used to into the second half and the end of 2016, and into 2017. It really needs to be emphasised that what government does at a state level is really very heavily about day-to-day management of utilities and day-to-day decision-making with a view to ensuring that there is confidence in our power supply—confidence because the prices are heading down and confidence because the reliability is going up.

It is one of the very proud achievements of the Marshall Liberal government, under the stewardship of Minister Dan van Holst Pellekaan, that over those four years we saw prices go consistently and substantially down, in excess of the pre-election commitment. We saw that consistently down, and not only that but we saw an end to blackouts. We saw an end to the unreliability. We saw an end to the culture of conversations about who has what generator at home to cope with the unreliability.

Yes, on the one hand we have the brave, bold, bright and confident future that is articulated so well by Ross Garnaut and others and that is there for us to embrace. I hear and respect, if I interpret it correctly, that tentative optimism that is expressed by the member for MacKillop in his remarks about where this heads, and indeed in the remarks of others, but let's not be too quick to launch into the new regime. Let's ensure that we are aware, front and centre, of those whose rights we would be impacting and whose services we must ensure have a downward price trajectory and an upward reliability trajectory.

It is those who would be affected by these changes that I have very much in mind at this opening stage. As I say, I am glad to hear, and it is certainly absolutely appropriate, that debate will not proceed further at this stage so that responses, particularly from those who speak for landholders, can be properly heard in a committee process, be properly undertaken. I share the concerns of the member for Narungga, who spoke so well about it earlier in the second reading debate, and indeed those of the shadow minister, the member for Morphett, who spelt out those concerns with some thoroughness earlier in the debate as well.

In that regard, I want to put on the record and spell out the provisions that are the subject of clause 10 on the one hand and clause 28 on the other. I might deal first with what is an entirely novel concept, as far as I am aware, that is introduced by part 3 of the bill in clause 10. It is the ordinary day-to-day business of the operation of the bill and it is the one that is going to have the most immediate and acute effect. Clause 10 provides that the minister may declare a release area. Clause 10(1) tells us:

The Minister may, by notice in the Gazette, declare an area of land comprising designated land specified in the notice that the Minister considers to be suitable for the operation of renewable energy infrastructure to be a release area.

Designated land is defined to mean pastoral land, Crown land and South Australian waters. It expressly does not include the Arkaroola Protection Area, a restricted access zone or a sanctuary zone within the meaning of the Marine Parks Act, a reserve within the meaning of the National Parks and Wildlife Act or a wilderness protection area or a wilderness protection zone, both within the meaning of the Wilderness Protection Act.

As might be seen, leaving aside South Australian waters for a minute, the designated land is zeroing in on pastoral land and on Crown land. In this regard, pastoralists—and those who represent them—will be zeroing in on clause 10 because, all of a sudden, by virtue of part 3 and clause 10 it will be for the minister and within the power of the minister to go ahead and to declare land that is the subject of a pastoral lease to be within a release area. It gets more unilateral than that, not less, in that the clause goes on to say, 'A declaration under subsection (1) may specify the renewable energy resource' that has been determined. The primary candidates are solar and wind, so it might say, 'Well, this is a release area for, let's say, wind energy.'

It then says, 'A person may, by written notice to the Minister given in a manner and form determined by the Minister, nominate an area,' so someone can get involved in the process of making the declaration, and then there is an obligation on the minister but, again, pastoralists take note. The obligation on the minister to consult that we find in subclause (4)(a) when it comes to pastoral land is the minister must 'seek the concurrence' not of the pastoralist but of 'the Minister responsible for the administration of the Pastoral Land Management and Conservation Act'.

So far as consultation is concerned, all we see with any clarity is that there is an obligation on the minister to consult with another minister, but so far so out of the picture for the pastoralist. After we deal with the potential difficulty of a lack of concurrence between ministers, we then get to subclause (6) where:

(6) The Minister must, before declaring a release area—

(a) give notice in writing of the proposed declaration in the manner prescribed—

well, we will wait and see what the regulations say about that, and then here is the fig leaf for the pastoralist, subclause (6)(b), so put that up in lights while people are tentatively considering how positive they are about this proposed new regime, which provides:

(6) The Minister must…

(b) undertake consultation required by the regulations in a manner prescribed by the regulations.

Anything you wanted to hear about from the pastoralists' point of view, you have to double trust us, trust us, both as to the obligation and the manner. That is really the last we hear about potential for pastoralists to know about what is going on or to hear about it or to have something to say about it or participate in the consultation. Then the rest of the clause deals with the way in which you—if you are a party that might seek a licence—might go away and put your hand up for the licence.

As has been observed by others, I just emphasise: have a close look at clause 10 because there is not much in it for pastoralists, on the face of that. The concerns do not stop at pastoralists, because while we have some indication via the definition of designated land—it does not include freehold land—wait until you get to clause 28, because in clause 28 we now see that again, on the face of the clause, there is the power in the minister to set or to grant a special enterprise licence.

There will be some relief in the fact that the minister, when considering an application for a special enterprise licence, must consult with owners of land or any registered native title claimant in the proposed licence area in regard to the application and have regard to matters specified in the relevant provisions of any guidelines that might be issued—again, down the track. So, freehold land is the subject of some real concern. On the face of the bill, pastoral land and those pastoralists who hold leases will have very legitimate concerns about the impacts on their rights, and so on it goes.

As I said at the outset, this is a very substantial bill which contains a whole range of very substantial impacts on landholders and landowners. We will be looking forward to scrutinising this in the weeks and months to come.

The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (17:26): I rise to support the Hydrogen and Renewable Energy Bill. This bill represents a critical step forward as we venture into the new era of large-scale hydrogen and renewable energy development. South Australia, of course, has been a beacon for its green energy achievements and it is essential we continue on our journey towards a more sustainable and economically prosperous future.

We have made remarkable progress here in South Australia in pursuit of renewable energy. Thanks to our existing frameworks, we have successfully achieved over 70 per cent renewable energy consumption. This accomplishment not only underscores our commitment to environmental stewardship but also demonstrates the viability of transitioning towards cleaner energy sources. But we have to do more, and we are doing more. We have our own goal of achieving 100 per cent net renewables by 2030 and I want us to achieve that much sooner; many of us do.

The rest of the world is also looking for a cleaner future. It is evident that the world is entering a new wave of energy development, one dominated by hydrogen and renewables. This new wave brings with it a change in scale and complexity, necessitating a single comprehensive framework that can holistically address the needs of our environment, landowners, community, and our state's strategic and economic ambitions. The Hydrogen and Renewable Energy Bill is designed to provide just that: a consistent end-to-end framework that will offer investor certainty, harness economies of scale and enable efficient development and regulation of this burgeoning sector across South Australia.

Allow me to highlight three key points that underscore the importance of this bill for our state's economic wellbeing and sustainability. First and foremost, hydrogen holds tremendous potential for the South Australian economy and small businesses. As we strive to be competitive in the international market, embracing hydrogen as an energy source is paramount. The global shift towards clean energy demands innovative solutions, and South Australia can lead the way by nurturing a robust hydrogen sector. By doing so, we not only create jobs and stimulate economic growth but reduce our carbon footprint, reinforcing our commitment to a sustainable future.

Secondly, achieving net zero emissions is imperative for the competitiveness of our local businesses on the international stage. Many industries around the world are transitioning to cleaner practices, and South Australian businesses need to follow suit to remain relevant and attractive to global partners and investors. This bill sets the stage for a comprehensive approach to green energy, ensuring our businesses can align with international standards and thrive in a greener, more sustainable global marketplace.

Green hydrogen, a central element of this bill, offers a unique solution to our energy storage needs. With the increasing deployment of solar and wind power, South Australia often finds itself with excess energy in the system. Green hydrogen production during these surplus periods can store this energy effectively for future use. By using this surplus energy to produce hydrogen, we not only maximise the efficiency of our renewable resources but also create a valuable energy storage system that can stabilise our grid and provide power during peak demand periods. Moreover, green hydrogen can revolutionise our manufacturing base, reinvigorating our local economy. I seek leave to continue my remarks.

Leave granted; debate adjourned.