Electricity Costs

The Hon. D.G.E. HOOD (15:46): Just as a point of interest, I actually had a property in Dulwich not that long ago. We were going to build a house there. It is a lovely part of the world. It did not eventuate and we moved to North Adelaide, but these things happen.

Members may remember that in my last matter of interest I addressed the issue of the skyrocketing electricity costs faced in our state, which are adversely affecting all South Australians. Time lapsed in terms of the time I had available to make the speech and so I did not finish it, so I will continue with that in my next opportunity to do so, which is right now.

In addition to the research and statistics that I had outlined during that contribution, the Institute of Public Affairs inquiry into the true costs of Australia's energy system also showed that our country once benefited from some of the lowest consumer electricity prices in the whole industrialised world and now has amongst the highest, if not the absolute highest.

The IPA asserts that this is being driven by a misunderstanding of energy system costs, which claims that renewables can replace coal and other forms of energy without increasing costs to the consumer. Its research and analysis has taken into consideration all costs associated with supplying electricity to the consumer, known as a 'total system cost' approach.

The IPA discovered that an electricity system built on the foundation of baseload generation, which provides power around the clock to the grid to meet base energy needs, results in the lowest total system cost. It also found that a system relying on variable renewable energy, such as wind and solar, would be at least twice as expensive as one built on coal and/or nuclear. Further, the IPA contends the federal Labor government's current energy system strategy and 2030 emissions target could quadruple the average wholesale price of electricity compared to a system built on coal.

I note with interest the opinion piece journalist Caleb Bond wrote that was published the day after I delivered my last matter of interest on this same topic, entitled 'How dumb are we to fall for the lie of cheap renewables?' In his article, Mr Bond drew attention to the fact that the state and federal Labor governments continue to ignore warnings from the Australian Energy Market Operator that South Australia, along with Victoria and New South Wales, is at risk of power shortages this summer unless extra generation is brought online as a matter of urgency.

While fossil fuel generators are going offline because of government policy, according to AEMO's annual Electricity Statement of Opportunities there are delays in new power plants coming on board. As Mr Bond outlined, AGL has walked back its plan to turn back on a gas-fired unit at Torrens Island later this year, and Engie has mothballed its diesel-powered generators at Port Lincoln and Millicent almost four years ahead of the original schedule without extra electricity to replace what they would have provided. The Premier is quoted in the article as stating:

The nonsense of the climate wars at a federal level has undermined investment. That in turn is resulting in an energy rich country that exports power to the rest of the world paying a higher domestic power price than the very countries that we are exporting our own energy to—and if that's not the best example of policy failure, then I'm not sure what is.

This is an occasion where I wholeheartedly agree with him. If that is the case, then please do something about it. As Mr Bond aptly points out, the power we are exporting to other nations that is cheaper than our own is, of course, coal and gas. For some reason, our governments are refusing to use more of these forms of energy to reduce power bills for our very own citizens, but are quite happy for those around the world to utilise it, despite the carbon emissions they would be emitting into the same atmosphere. They get the benefits, we wear the cost.

South Australians are experiencing cost-of-living pressures on all fronts, and it is evident that the state and federal Labor governments have a responsibility to review their energy policies to relieve people's cost-of-living burdens and at least provide some relief in this space. If you look at the total system cost, we are in a situation where we are paying amongst the highest power prices in the world, and it does not need to be the case.

As I said in the introduction of my remarks today, there was a time not that long ago when Australia had amongst the lowest energy prices in the entire industrialised world. The fact that we had such low energy costs was really the basis for our industrial success and for what became known as the lucky country, an expression often used about our great nation.

I fear that, because we have departed from the fundamentals that gave us cheap energy, cheap power and enabled us to build a great industrial base, we have strayed from that and, as a result, I fear that our costs will rise and we will see increasingly more and more businesses going out of business because they simply cannot afford to pay the energy costs provided to them, and it will affect households in a similar negative fashion.