Bills

Hydrogen and Renewable Energy Bill

Second Reading

Adjourned debate on second reading.

(Continued from 27 September 2023.)

The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (12:00): I wish to continue my remarks on the Hydrogen and Renewable Energy Bill 2023 talking about the importance to the South Australian economy and to our small business sector, particularly manufacturing, of having a strong green hydrogen and renewables sector here in South Australia.

By utilising green hydrogen in the production of green iron, we can reduce our carbon footprint in our manufacturing processes and enhance the sustainability of our industries. For way too long we have simply dug up our resources and shipped them overseas. Green iron provides us with the opportunity to add value to the resources we dig out of the ground and ship off overseas. This transformation can create new jobs and provide further diversity of our economic portfolio, making South Australia a hub for green innovation and sustainable manufacturing.

The Hydrogen and Renewable Energy Bill 2023 will empower South Australian small businesses by providing a strategic framework to leverage the opportunities that hydrogen presents. This bill is timed perfectly with the recent release of the South Australian Small Business Strategy. The support programs provided in the strategy will assist local enterprises to tap into the beginnings of a hydrogen sector.

This presents not only a chance for small businesses to thrive but also a chance for South Australia to strengthen its position as a global leader in hydrogen and renewable energy technologies. Local entrepreneurs and small enterprises can tap into the hydrogen value chain, from production and storage to transportation and distribution.

The bill will create opportunities for small businesses to thrive in the emerging hydrogen economy, but it is not just about supporting our local businesses; it is also about ensuring their competitiveness on an international stage. The global market is rapidly shifting towards sustainability and achieving net zero emissions. I saw this quite starkly on a recent trip to the UK and Europe and the push there, in particular, for net zero. South Australian businesses must adapt to these changing market dynamics to remain competitive.

In today's interconnected world, consumers and investors are increasingly demanding products and services that are environmentally responsible. The Small Business Strategy identifies boosting business sustainability as a key theme for South Australian businesses. The Small Business Sustainability Support Program, which is part of the strategy, will provide achievable strategies to improve businesses' environmental sustainability and climate resilience. Companies can demonstrate their commitment to sustainability by achieving net zero emissions and will have a distinct advantage in the international marketplace.

By embracing hydrogen and renewable energy, South Australian businesses can not only reduce their carbon footprint but also enhance their global competitiveness. Small businesses are the lifeblood of this state's economy, and their success is integral to the overall prosperity of South Australia. As we transition to a hydrogen-based economy, we must ensure that our small businesses not only survive but thrive, and the Small Business Strategy, coupled with the opportunities presented by hydrogen, will empower them to do just that.

Hydrogen is not just a fuel; it is a form of energy storage and can balance the intermittent nature of renewables, ensuring a steady and reliable energy supply. This enhances energy security for our businesses and homes, safeguarding us against disruptions in power availability. One of the challenges of relying solely on renewable energy sources like wind and solar is variability: they produce energy when wind blows or sun shines, but not necessarily when we need it the most.

Hydrogen can use that excess energy in times of abundance and release it when the demand is high. This flexibility makes our energy grid much more resilient and reliable. Imagine a future where we have an integrated energy system that seamlessly combines renewable electricity generation with hydrogen storage and distribution. This will provide us with a continuous and stable energy supply, reducing our dependence on fossil fuels and ensuring that South Australia remains a leader in sustainable energy practices and achieves its target of 100 per cent net renewable energy by 2030.

The Hydrogen and Renewable Energy Bill 2023 is a landmark piece of legislation. It will shape the future of South Australia. It is not merely a matter of environmental stewardship but it is a strategic move towards our economic prosperity, our energy security, small business empowerment and a sustainable future for our state.

What I want is for us to join together to embark on this journey towards a brighter future where South Australia stands as a beacon of sustainability, innovation and economic growth. By passing this bill, we are not only securing our present but also paving the way for a better tomorrow for ourselves and generations to come. With that, I commend this bill to the house.

Mr ODENWALDER (Elizabeth) (12:05): I rise to make a brief contribution to the Hydrogen and Renewable Energy Bill and in doing so congratulate the government, the Minister for Energy and the Premier on their vision in both the Hydrogen Jobs Plan and this bill, which will make it all possible in the end.

I am proud of the fact that South Australia is a recognised world leader in the global energy transition and in the adoption of renewable energy generally. This, of course, started under the Rann government, was accelerated considerably under the Weatherill government and is now being continued under the current Premier and his cabinet, particularly the Minister for Energy. The bill extends the state's leadership even further.

As well as giving expression to our election commitments, it introduces the nation's first legislative framework for the coordinated rollout of a hydrogen industry, supported by our considerable renewable energy resources. It is worth reflecting on some of the initiatives that have got us here in the first place. It is easy to forget that just 20 years ago South Australia generated almost all, if not all on most days, its electricity from fossil fuels. Now, on any given day, most of our energy comes from renewable resources. I think something like, on average, 70 per cent of our energy on any given day comes from renewable sources.

This dramatically reduces our carbon emissions, of course, and really sets an example for the rest of the world. It makes sense in an environment where sources of renewable energy such as wind and solar are in abundance and, as other speakers have said, coexist with each other like almost nowhere else in the world. But still this transition does not happen by accident. It takes governments with vision and courage and premiers and ministers who are willing to make a plan and stick to it, to do the right thing despite the risks along the way and, in some cases, despite the opposition of vested interests.

When the Rann government was elected in 2002, it adopted a target of 26 per cent renewables by 2020. Decisions were made to exploit the fact that South Australia's best onshore wind potential was located between Port Augusta and Adelaide, where there were existing transmission lines, meaning that any energy generated from wind farms along this 300-kilometre stretch of road is relatively easy to exploit and link to the grid. As this transition progressed, it coincided with the winding up and eventual closure of the coal-powered power stations at Port Augusta.

Early in my first term, or perhaps my second term, I had the opportunity to chair a select committee that looked at the closure of the Port Augusta power station and the challenges that brought. I was joined on that committee, and in fact it was instigated, to be fair, by the then member for—I cannot remember the name of his seat now, but he was certainly Deputy Premier—van Holst Pellekaan—

The ACTING SPEAKER (Mr Brown): It's Stuart.

Mr ODENWALDER: The member for Stuart, of course, the then member for Stuart and later Deputy Premier and energy minister, Dan van Holst Pellekaan. We served on this select committee which, although it was looking at the closure of the Port Augusta power station, was primarily looking at the opportunities available in terms of solar thermal energy generation.

Ultimately, of course, to date the option of large-scale solar thermal energy has not been taken up and realised in this state or, indeed, anywhere else in Australia. However, we can see the fruits of these investigations in the solar thermal arrangements at the Sundrop Farms greenhouse, which the member for Giles would be very familiar with. This was enabled by a $6 million state government grant, and it was a project that employed some 220 people in its construction.

In other measures, in May of this year I was very happy to welcome the Minister for Energy and also the Minister for Social Housing to my electorate to meet with friends of mine Elizabeth East residents Craig and Yvonne, who were part of the first phase of the state's Virtual Power Plant. The Virtual Power Plant, for those of you who do not know, is the partnership between Tesla and the state government, partly funded through the state's Renewable Technology Fund, which was an initiative of the Weatherill Labor government. I know that, in the lead-up to the 2018 election, it was very popular on doorsteps. Although the final result of that election was not one everyone would have liked to have seen, that particular initiative was extremely popular, and it was one that I campaigned on very hard.

The Virtual Power Plant is a network of distributed energy resources, in this case Housing SA homes with solar and battery systems, which all work together to create a single virtual power plant. Sophisticated technology and software are used to control the flow of energy coming into the solar panels on residents' roofs and into home batteries to charge or discharge that energy and allow it to be traded on the national energy market.

The idea, of course, is that these many systems work together. They harness the relatively small and individual amounts of energy that are generated by households to support the grid and also to provide affordable energy to the participating householders themselves, which of course is why it was popular in an electorate like mine, where there is a considerable amount of social housing, Housing SA and community housing, so they can take advantage of this particular offer.

Small amounts of energy stored in individual home batteries can become large amounts of energy to help support the grid in times of need. Indeed, the capacity and power of a virtual power plant can sometimes match or even exceed a traditional power station.

As of May this year, and as the Minister for Energy and the Minister for Housing helped us announce in Elizabeth East, this virtual power plant, which by then provided cheaper electricity to more than 4,000 public housing tenants, began to get even bigger. Tesla launched phase 4 of South Australia's Virtual Power Plant, enabling even more South Australians on low incomes to share in the benefits of renewable energy.

As a result of this investment by Tesla, an additional 3,000 South Australian households will ultimately benefit from low-cost electricity and the comfort of battery backup. For the first time—and again this is very important in Elizabeth, where a lot of Housing SA properties have transitioned to community housing—the project will include households from the community housing sector. It is also important for the member for Ramsay, who now represents the good people of Elizabeth Vale. There is a large section of community housing there that will have the opportunity to take advantage of this offer from Tesla.

Tesla's continued expansion of the Virtual Power Plant demonstrates that the decision made in 2017 by the Weatherill government to invest in this program has delivered a successful result and continues to leave a significant legacy. The rollout will also support 200 full-time jobs, including 70 apprentices.

It is also important to note that, as part of hosting Virtual Power Plant solar panels or batteries on their homes, public and community housing tenants get access to the cheapest retail electricity price in the state, currently 23 per cent below the default market offer. This represents a $423 yearly saving for a typical household. It also benefits all South Australians by providing important grid services that had previously only been provided by centralised more traditional equipment, like the now defunct Port Augusta power station.

As I said, under the project 4,100 households have already had solar and Tesla Powerwall systems installed. This next phase will bring the number up to over 7,000. Tesla have plans, ultimately, to have 50,000 South Australian homes connected over time, which would not only benefit those on low incomes and those who are eligible for the rollout of this program but also benefit South Australian further services to the grid.

Under the Weatherill Labor government, we saw the establishment of the world's largest lithium-ion battery at Hornsdale, a project that not only leant stabilisation to the grid but in the process created more than 1,000 direct and indirect jobs during construction.

With this bill, we will be putting South Australia in exactly the right position to capitalise on what will be a renewable energy goldrush as we streamline and coordinate the development of hydrogen and renewable energy projects. This bill was the nation's first legislative framework, designed to provide a coordinated approach to the burgeoning hydrogen and renewable energy industries.

We know that the existing frameworks by successive Labor governments—and I have spoken about some of those initiatives—have served South Australia well, helping us reach over 70 per cent renewable energy, but we also know that our state is headed for a new wave of large-scale hydrogen and renewable energy development on a scale we have never seen before. As a result, of course, we need to get the regulatory framework right.

The change in scale and complexity, including several very large complex projects, demands a single end-to-end framework that can consider the needs of the environment, native title holders, landowners, communities and the state's strategic and economic direction.

The Hydrogen and Renewable Energy Bill is, at its heart, six acts being merged into one, minimising red tape for prospective investors. It will facilitate a straightforward, competitive, government-led approach to large-scale hydrogen and renewable energy development in the state, supporting the government's Hydrogen Jobs Plan.

The bill applies to both freehold and government-owned land, as well as state waters, and will ensure community investor certainty and clarity, as well as consistently reliable performance across the social, environmental and safety aspects of the industry.

On freehold land, proponents will need to secure access to land through direct agreement with landowners, preserving current arrangements. A new competitive system will be introduced for conferring access and licences for projects on pastoral land and state waters, enabling the government to responsibly assign access to some of the state's most prospective areas for renewable energy development.

The declaration of these release areas will only occur after a consultation process involving government agencies, native title holders and other impacted stakeholders. The declaration of a release area will enable a competitive tender process for feasibility licences over that land and waters, with applicants to compete based on transparent selection criteria. This will ensure the state only hosts those projects willing to embrace coexistence with current land uses and deliver community and environmental benefits through their projects.

As other speakers have noted, there will be five licence types created relating to the key stages of renewable energy projects, from the early research and feasibility stage right through to the construction, operation and closure of facilities, namely:

the renewable energy feasibility licence or permit, which enables exploration for renewable energy, including construction of monitoring equipment;

the renewable energy infrastructure licence, which permits construction, operation, decommissioning and rehabilitation of renewable energy infrastructure;

the renewable energy research licence, which permits construction, operation, decommissioning and rehabilitation of renewable energy infrastructure for the purpose of researching the capabilities of a technology, system or process;

the hydrogen generation licence, which permits construction, operation, decommissioning and rehabilitation of hydrogen generation facilities; and

associated infrastructure licences, which permit ancillary infrastructure (transmission, roads, water treatment and so on) and associated facilities, such as hydrogen power plants, ports for hydrogen product export and desalination for hydrogen production.

The bill has been subject to extensive consultation over the past year, including with native title holders.

The Malinauskas government is committed to the renewable energy transition and to a renewable energy and hydrogen sector that is ecologically sustainable and responsible. The bill is designed to give confidence to international investors looking to invest their capital in growing the industries of the future right here in South Australia. It will also give the community confidence that these projects will be delivered in such a way that they protect the environment and the interests of communities, landholders, native title holders and the environment. With those words, I commend the bill to the house.

Debate adjourned on motion of Mr Basham.