Legislative Council: Tuesday, November 01, 2022


Question Time

Energy Security

The Hon. J.S. LEE (Deputy Leader of the Opposition) (14:32): I seek leave to make a brief explanation before asking a question of the Leader of the Government about energy security.

Leave granted.

The Hon. J.S. LEE: Our community's safety and wellbeing is the most important purpose of any democratic parliament. Victoria's Premier, Daniel Andrews, has announced his government's intent to nationalise his state's energy generation and restrict gas development. South Australia's energy security relies heavily on the Victorian interconnector. When push comes to shove, there is significant risk that Daniel Andrews will disconnect that South Australian lifeline to keep the lights on in his own state.

My question to the Leader of the Government is: what guarantee will the Labor government give to our community to ensure that South Australians can keep their lights on, and will the government explain what immediate measures it has put in place to minimise the risks to energy security?

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (14:33): I thank the honourable member for her question. It is an important question because the national energy crisis facing Australia carries risks to people right around Australia. It is worth noting that jurisdictions like Western Australia chose not to privatise their electricity assets, unlike the former Liberal government under the former Treasurer, the Hon. Rob Lucas, who, after going to an election and giving a guarantee of not privatising, decided to privatise our electricity assets.

Members interjecting:

The PRESIDENT: Order! Continue, Attorney.

The Hon. K.J. MAHER: It might be worse. Leave was granted to table a ministerial statement from the Premier in another place but as the question directly asked by the honourable member pertains to actions being taken in relation to the national energy crisis, it might be worth reading largely from what has just been tabled.

Members interjecting:

The PRESIDENT: Order! I am listening to the Attorney-General.

The Hon. K.J. MAHER: I understand that the opposition don't particularly care about this issue and are embarrassed and ashamed that it was their former government that sold off assets here, so I can understand the Hon. Michelle Lensink being embarrassed and ashamed. I could understand that, but I will give information because that is the respectful thing to do because the Hon. Jing Lee has asked.

Members interjecting:


The Hon. K.J. MAHER: The Premier has outlined:

The Commonwealth Budget delivered on 25 October forecasts that electricity prices will increase in the National Electricity Market by 20% by the end of this year and a further 30% next financial year—a potential cumulative increase of 56%.

In addition, Federal Treasury expects retail prices of gas to increase by 20% this year and a further 20% in 2023-24.

Price increases of this scale are completely unacceptable to the community and will have significant adverse impacts on households and businesses, worsening pressure on the cost-of-living crisis, reducing real disposable income and impacting economic growth.

As noted by the Commonwealth, the Australian Energy Market Operator and the Australian Energy Regulator, the illegal invasion of Ukraine—

Members interjecting:


The Hon. K.J. MAHER: —by Russia has caused a global gas supply crisis which has increased prices to extraordinary levels. Australia, including South Australia, is not immune to these price rises.

Electricity price rises have been exacerbated by a related global increase in coal prices and, in Australia, the increasing unreliability of ageing coal-fired power stations and problems with coal supply.

South Australia has a higher level of renewable generation and price rises here are expected to be lower than in the eastern states which rely on coal-fired power stations. However, while lower, the predicted rises are severe.

Accordingly, the Government has established a National Energy Crisis Committee of Cabinet which will be chaired by [the Premier].

The Cabinet Committee will be supported by a Taskforce which will help develop a response to the forecast electricity price increases with the aim of implementing measures that can reduce the scale of increase and mitigate the impact on the community.

The National Energy Crisis Taskforce will be co-chaired by the Minister for Energy and Mining…and the Chief Executive of the Department for Energy and Mining, with a membership including the Chief Executive of Hydrogen Power SA, Treasury and Finance, Department of the Premier and Cabinet, and other members as determined, with support from the Department for Energy and Mining and expert energy market consultants.

In addition, South Australia is working collaboratively with the Commonwealth, other states and territories and the national market bodies AER, AEMC and AEMO.

[This government] is pleased that the Commonwealth has reinvigorated the Energy Ministers process and welcomes the leadership of Energy Ministers by the Commonwealth Minister for Climate Change and Energy [the Hon.] Chris Bowen.

This is a national energy crisis and we welcome statements from the Commonwealth that Prime Minister Anthony Albanese, Treasurer Jim Chalmers, Minister for Resources Madeleine King, Mr Bowen and colleagues will consider all options in addressing the challenge of this crisis.

The Commonwealth has considerable regulatory powers and South Australia will welcome those powers being exercised in the pursuit of affordable, reliable and cleaner energy.

It is also important to dismiss the claims that renewable energy is the cause of the price increase.

The cause is the increase in the prices of coal and gas and the internationalisation of prices domestically despite Australia's bountiful supplies.

In the Quarterly Energy Dynamics report published last week by the Australian Energy Market Operator this trend is quite clear.

That report notes that in South Australia the average price of gas in the Third Quarter of 2021 was $11.51 per gigajoule. In the same quarter this year it was $27.29—that is, there has been a 137% increase.

We are, as a government, taking action. When you look at the price, as I said, of gas compared to that, let's say, for wind, the price change from negative $41 in quarter 3 of 2021 to negative $1 this year is clearly reducing overall price rather than stoking increases. As I said, any suggestion that renewable energies have played a part in increasing power prices isn't borne out by the facts.

The government is committed to assessing all possible options available at a state level to protect South Australia from the worst impacts of the national energy crisis. I thank the honourable member for her question but still reiterate it was a Liberal government that decided to sell off our electricity assets.

The PRESIDENT: Before you ask your supplementary question, I just make quite clear that I allowed the Attorney to read from a statement that had been tabled. I hadn't seen it. It was an important question and was obviously quite a generous answer. I would say, if it was asked by the government, I probably wouldn't have allowed you to read your ministerial statement. You have a supplementary question?