Climate Change and Greenhouse Emissions Reduction (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 29 August 2024.)

Mr PATTERSON (Morphett) (12:48): I take the opportunity today to speak in parliament about the Climate Change and Greenhouse Emissions Reduction (Miscellaneous) Amendment Bill and indicate that I am the lead speaker for the opposition. In terms of this bill itself, one of the primary elements of the amendments that are being made to the Climate Change and Greenhouse Emissions Reduction Act relates to renewable energy targets that were put in the act back when it was first introduced and, of course, are now quite out of date.

In terms of the baseline figure, it was working off 1990 figures, which a lot of European countries used at the time and coincided with the fall of the Berlin Wall and when Europe came together. There was a significant amount of coal-fired generation emissions in industry, especially in the Eastern Bloc, so for them it was quite a high baseline to then work against. Some have speculated it was to their advantage in terms of being able to make reductions appear bigger than they were.

The other aspects to it were around targets for renewable energy and working toward 2014 dates which, if you think where we are now in 2024, are certainly 10 years out of date. It is welcomed that there have been updates to these targets and updates to the regime as a result. From that point of view, we will make some contributions around that.

I want to make an opening point around the introduction of this bill and the timings of it. It was introduced back in late August, on 29 August. In the same week it was introduced, we also heard about some significant regional South Australian businesses that have been hit by surging power bills. Very high electricity costs are really starting to eat into their ability to trade, their ability to run profitably in the agricultural industry and then, of course, to provide food to not only South Australia but domestically in Australia as well. It is a fact that those prices then get passed on into the cost of staple produce prices.

One of those businesses, iconic South Australian company Nippy's, talked through the challenges that they have seen on their power bills. In fact, they explained how their electricity bills had doubled from the previous year, specifically their June bill. It was $51,600 in 2023. Fast-forward to June 2024, and they found their electricity bill had skyrocketed to $109,580. That is a massive cost there. Ben Knispel, who is in charge at Nippy's, detailed not only the more than doubling of their electricity bill but some of the underlying drivers of that. One of those was $34,350 of market or network charges. They are big network charges built into that $109,000 bill.

Of course this bill was at the same time that Nippy's had used almost 6,200 fewer hours of electricity in their consumption. Their consumption was reduced, in terms of their kilowatt hours, but their power bill doubled. At the same time, Mr Knispel also made the point that the company—recognising the ability to use solar panels to help reduce power bills—had installed a million dollars of solar panels as well. Despite that, and the ability for the solar panels to supplement and provide some of the power usage in their production facility, the bill skyrocketed.

I think another really sobering point that was made was that the prices, as they fluctuate throughout the day, on some occasions had forced Nippy's to stop production because it was just simply uneconomic for them to operate during some of those periods where we saw the spot price substantially increase.

That is just one example, and there are others that I will touch on later, around some of the big pressures that businesses are facing, as well as households, in terms of their electricity bills as we go through what is a very challenging energy transition at the scale that is required and for these businesses to be able to compete. The other aspect around their business models is that they based their business models, the ultimate cost that the consumer is going to pay, on some of these energy prices and now there is a totally different regime in place.

As I said, that is not the only business that is screaming about these power prices and it is a direct result of what is going on in terms of the electricity market and the transition that is occurring here in South Australia. In that week of parliament when this amendment bill was introduced we were asking questions of the government around what the government's plan is to address this. Sadly, there was a lot of blame but unfortunately no real answers around what is to be expected from the government, so there are challenges around that.

An additional aspect of that week is that the next day—of course, parliament finishes on a Thursday where the government can be scrutinised—on the Friday late in the afternoon, ESCOSA released their retail market offers report. That is a report that details the average retail costs that households here in South Australia are paying and the average retail costs that small businesses are paying. This report basically reinforced the experience of what was going on at Nippy's. It really laid bare what is going on in the retail electricity market for both households and businesses.

The question has to be asked: why would the government have released a report such as this, which gives scrutiny on what power bills are being paid, late on a Friday after all the media had filed their stories for the day? You could postulate as to some of the answers. One might well be that the government was hoping no-one would notice and no attention would be drawn to what is going on in terms of retail power prices. Another reason would be because it actually lays quite bare and puts it out in the open the pain that is being felt right around South Australia.

The report showed that power bills for the average household family in South Australia rose by $411 between 30 June 2023 and 30 June 2024. What that meant is that the average household electricity bill had risen to $2,621, which is the highest recorded average residential power bill for South Australians that has been reported by ESCOSA while it has been conducting these market offer reports.

At the same time, it also showed what was going on for small businesses. It showed that the power bills for the average small business in South Australia had risen by a staggering $791 between 30 June 2023 and 30 June 2024. In terms of where that landed, it showed that the average small business electricity bill had risen to $5,364. Again, in terms of small businesses, that is the highest recorded average electricity bill experienced by South Australian businesses in the history of these reports that ESCOSA has been conducting.

They really laid bare what is going on and that gives some context around what is going on in the real world, the pressures being faced by households and the pressures being faced by small businesses as they are going through this energy transition in South Australia. I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 13:00 to 14:00.