Renewable Energy

The Hon. M.C. PARNELL (15:07): I seek leave to make a brief explanation before asking a question of the Minister for Climate Change about renewable energy.

Leave granted.

The Hon. M.C. PARNELL: As members would be aware, the Conservation Council of South Australia this week launched its report into how South Australia could generate 100 per cent of its electricity from renewable sources by the year 2030. A copy of the executive summary of the report was provided to all members in their parliamentary mailboxes this morning, and the full report is available online.

Importantly, the Conservation Council report notes that 100 per cent renewable electricity can be achieved in South Australia without federal government subsidies, which is an important consideration at present, given the Prime Minister's and federal Treasurer's hatred of renewable wind energy, which forms the backbone of our state's clean energy success.

In conjunction with the launch of this report, the Conservation Council has embarked on a campaign to convince the South Australian government to commit to a road map for 100 per cent renewables in South Australia. The Conservation Council notes that we already have a road map for unconventional gas, so they quite reasonably ask why we don't have a road map to achieve 100 per cent renewable electricity.

My question of the minister is: given that the government has already set a target to reach 50 per cent renewables by 2025, will it now go that extra step and create a road map for 100 per cent renewable electricity for South Australia?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (15:09): I would like to thank the honourable member for his most ambitious question to me. I really appreciate his go-getter type of attitude, but in terms of ambitious targets of 100 per cent, let's just try to hit 50 per cent first. I would then be looking at trying to increase targets. As the honourable member will know, when we have set ambitious targets for this state we have achieved them. The ambitious target of 20 per cent was achieved in good time. The next ambitious target of 33 per cent was achieved ahead of time and so we have now set a target of 50 per cent. But I like the way he thinks; I do like the way he thinks, compared to some others at the federal government level.

Just by way of background, we need to bear in mind some overriding economic issues that will come to play in what is essentially a national market in terms of electricity generation and its costs. The Australian Energy Market Commission has forecast that market offer retail electricity prices are expected to decrease on average by 2.4 per cent per year to 2016-17. Contributing to this reduction is a reduction in competitive market costs, driven by a substantial decrease in wholesale energy purchase costs due to a growing oversupply of generation capacity.

The oversupply is a result of falling energy consumption, I am advised, and growth in wind generation under the renewable energy target (RET). Low wholesale energy prices are also offsetting the cost of the RET for South Australian consumers in the short term. In 2014, the federal government consulted with ACIL Allen on the effect of removing the large-scale RET and found that, in the long term, retail energy prices for residential, commercial and industrial customers would be, on average, 3.1 per cent higher if the large-scale RET was removed.

All users of electricity on the grid in Australia pay a small amount towards the large-scale renewable energy target, whether or not there is investment in renewable energy in the state. In South Australia, this is approximately 2 per cent of an average household electricity bill, I am advised. Therefore, South Australia has been a beneficiary of the RET in attracting a disproportionate number of wind farms, with associated investment and jobs involved, but it is also because we went out of our way to try to attract that sort of investment to our state.

We have changed our regulatory approach in terms of wind energy and solar energy companies in particular, but also honourable members will remember we passed the pastoral land act amendment bill in this place last year, which made the processes of setting up renewable energy generators in pastoral lands much easier.

So, we are working towards our target of 50 per cent that the honourable member mentioned. I will have a look at that report which was prepared on behalf of the Conservation Council when it lands on my desk and seek some departmental advice about that. I am sure the minister for energy in the other place will do the same.

Can I just say this: we are not shy of ambitious targets in this state. The state Labor government believes that if we are to lead in the area of renewable energy, which we have been doing in this country, we need to be ambitious. We believe that if we as a state and as a nation, hopefully, are to play our role in the world in terms of transitioning to a low carbon future, then we will all have to step up and move our targets progressively higher and higher until we do get to the stage where we can say that we will be 100 per cent renewable.