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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2024-03-19 Daily Xml
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Bills

Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr PATTERSON (Morphett) (15:43): To pick up where I left off just before we broke, I was talking about the effect of the quarterly average wholesale prices back in quarter 3, and how they flowed on from the announcement around the default market offer that came into place on 1 July 2023. I just remind people, as I said during that contribution, that the default market offer that came in on 1 July 2023 saw massive increases to household power bills on average on the default market offer with a jump of $512. Businesses also had massive increases to their bills under the default market offer of $1,310. These are big jumps equating to nearly 24 per cent for households and nearly 29 per cent for small businesses.

This came on the back of the increases to the default market offer previous to that, which came into effect on 1 July 2022, which saw households have increases of $198—nearly $200—in that one as well. Over the two years, those combined caused a big jump to bills for households: $710, in fact. For businesses the increases were even more, with big jumps in their electricity bills as well. That has a big impact on them.

As I said previously, we heard from both households and struggling small and medium businesses who had big increases to their electricity bills. They said these had increased by more than $5,000 per quarter for some of those medium businesses. They explained there is only so much they can cut back on to reduce their costs. On many occasions, the nature of their business means that they rely on power and they cannot cut back on their power. They are struggling.

At the same time, the families at home are having to deal with a broad range of increases to their cost of living. A big part of that is electricity, so it is impacting them as well. It is also having an effect in terms of them going out and spending money at some of these small businesses. Small businesses are getting hit not only from their own pressures, but unfortunately they are then seeing it from their customers as well, so it is really challenging for them.

Since that time, the quarter 4 wholesale prices have come out, and thankfully they did show a drop for that quarter. The wholesale prices did come down. When you look at the history of the average quarterly wholesale prices over the last four years, you do see that quarter 4 tends to be one of the lower ones when you compare it across the board—quarter 4 with spring and summer, and quarter 1 potentially as well, again because of summer.

So it was expected that they would come down. It would have been startling and a poor outcome if they had not. Of course, what we saw was the minister and also the Premier jump on board those and say, 'That's proof positive that wholesale prices are coming down,' and therefore we had the energy minister demanding and telling the energy regulator that the default market offer needs to have a significant drop, a big drop, because of these.

But when you look at the overall situation for the overall year—in 2023, you look at those average annual prices in the NEM—what you find is that because we had really high prices in quarter 3, because we had rising prices between quarter 4 of 2022 and quarter 1 of 2023 combined, the average annual price in the NEM in 2023 for South Australia was $103 per megawatt hour.

Compared with other jurisdictions, Queensland was $102 per megawatt hour for 2023, New South Wales was $105 per megawatt hour, Victoria was $64 per megawatt hour and Tasmania was $56 per megawatt hour. What you see there is that South Australia really is up in the upper echelons of the average annual prices in the NEM—just a bit more than Queensland and just a bit under New South Wales, but effectively those three are equal. So we see sustained high prices at a wholesale level for South Australia, and that then makes its way through into customers' bills.

After massive increases over the past two years of $710 for households, we see the Australian Energy Regulator announcing their draft default market offer today. It shows that electricity prices have come down but certainly not in comparable amounts to how much they went up over the previous two years. For households, prices were reduced between $14 to just a bit over $50, which is about between 0.5 per cent and 2.5 per cent.

What we are seeing are elevations, big jumps, over two years. This reduction really does not make a significant dent in those big prices that the energy minister was demanding because the underlying wholesale prices are elevated when you look at the average across the whole year. When you take away the $14 reduction, for example, what you see over the three default market offers that have been brought down under the Malinauskas Labor government is that electricity prices have still increased significantly.

Household power bills would still be up by $696. Small businesses saw an 8 per cent reduction in the draft default market offer here, but that was after a massive increase the previous year of 29 per cent. Combined across that, you can see that it was up 29 per cent and down 8 per cent. They are still overall big increases. In fact, over the three default market offers, we have seen elevated levels up around $1,288 for businesses.

This draft default market offer shows that electricity still remains in high-price territory in South Australia under the Malinauskas Labor government, and it is the families and small businesses that will have to continue to pay the price. They have to face up to another year of very high electricity prices going forward. Similarly, businesses are again having to face up to these high electricity prices. Some of them are really struggling.

We have seen stories of businesses shutting their doors because of significant cost pressures in South Australia. When they set about starting their businesses, they would have set up a business model that would have been based on a certain level of rent, a certain level of employee expenses, a certain level of electricity prices. They probably did not take into account the fact that there were going to be massive increases in the prices. The effect is they are unable to make a go of it because they cannot naturally increase costs for their products because their customers are also struggling.

Consequently, they are not able to have increases at the business level to then flow through to take account of these big increases in electricity costs that have occurred. Just on the weekend, we were with a business owner, Natalie from Pulp & Thread, talking with her about this. It is a cafe and also sells fashion, trying to provide various offerings for customers. Their power bills have gone up from $2,000 a quarter to over $5,000 a quarter. As I said before, their business relies on power. They cannot just turn the power off.

What Natalie was trying to do was make savings where she could, turning off some of the fridges, some of the freezers and the display fridges. Usually they have food that is pre-made put out in the display fridge. It gives ideas for customers so when they come in they can see immediately what is on the menu and what it looks like. So potentially that causes them to buy those products.

Additionally, you have tradies or people on the way through who are in a hurry and do not have time to wait for five or 10 minutes to have sandwiches made for them, so having pre-made food on display makes it quick and easy and very convenient. Potentially, by not having that product there it is not certain whether that is affecting customers' habits, if they are no longer attending.

What she has certainly noticed is that her customers do not seem to be spending as much, as they are dealing with their own cost pressures at home. So what we are seeing is real effects on people. She is talking about whether that affects employing staff and growing the business. Instead of having more products there to be able to sell, it is causing a reduction. That potentially means not employing staff for as long or not employing as many staff, and that is certainly not what we want to see. We want to see businesses thriving. We want to see them employing more people. That is why it is so important to make sure that this government has a plan to bring prices down.

We know that at the election the Malinauskas Labor government had no plan in place to ensure that electricity supply was affordable and reliable. Instead, what we have now is the minister basically trying to use the newspapers to bully the AER into dropping prices significantly. We see that on this occasion that has not come to fruition at all. It is really showing up why the government needs to come up with a plan to deal with sky-high electricity prices that people are having to deal with.

I have had another example of a couple in Camden Park who are pensioners. Their power bills have surged to nearly double over the last two years. Again, they are pensioners on fixed incomes, so they are really struggling to cope with this and it impacts on what they do in terms of how they use electricity. It is front of mind at all times for them because of this. They are not alone: there are many other working families that are struggling to make ends meet.

I spoke earlier about the information in the annual retail report that came out late last year. It went through and compared all the residential electricity median market and standard offer prices across Queensland, New South Wales, South Australia, Victoria and Tasmania. It confirmed that South Australia has the highest residential electricity median market and standard offer prices per kilowatt hour in the National Electricity Market. So high prices are continuing on, and that flows through into household electricity bills.

The report went on also to say what the effects of these high power bills are on customers. It makes the point that more household customers are accumulating energy bill debt and that the proportion of customers with energy debt (less than 12 months) has increased. It identifies the fact that the big price rises that happened last year are causing more and more people to get behind in their payments. As debts grow, there are more customers entering hardship payments as well.

Sadly, one of the things that the report reveals is that the proportion of South Australian customers on hardship payments is going up. It shows between 2018-19 it was over 2 per cent. It came down over those years between 2019-20, 2020-21. It came down to a number just over 1.5 per cent of the proportion of customers on hardship payments. Now it is going up again. In fact, South Australia had the highest proportion of electricity customers on hardship payments in the nation, I think at 1.99 per cent. So just under 2 per cent of electricity customers in South Australia are on hardship payments.

A bit further into the report it goes into some more information relating to the proportion of hardship-payment customers who are receiving energy concessions as well, and it shows that only 40 per cent of those on hardship programs are receiving a concession. That means that 60 per cent of people on hardship payments are not receiving any support from the Malinauskas Labor government. Working families are bearing the brunt because we know many of them were not eligible for the concessions in the state budget that was handed down last year. They are struggling and they are bearing the brunt of it.

Overall, we know that the typical South Australian family is $20,000 worse off under the Malinauskas Labor government during this cost-of-living crisis. Those people in the electorate of Dunstan, who saw their power bills going down when the former Liberal government was in power, who saw the average bill reduced by $420, see that they are now going up again.

As I said before, we know that there was no plan in place by the Malinauskas Labor government at the election, or since, to ensure that the electricity supply is affordable and reliable. The government are spending $600 million on their hydrogen power station, which they admit is not aimed at delivering cheaper power bills for households. I have asked the minister in parliament this year: will this power station reduce household electricity bills? His response was:

First and foremost, we have always said this is about trying to get an improvement for industrial users. It's commercial and industrial customers we are targeting.

For households, when they are struggling with these high prices, they are quite entitled to ask: what is the plan for households? That is certainly a fair question that they should be asking and that we certainly are asking.

That brings us back to the bill we have at hand. We have power bills surging for households and small businesses and so they are asking: is this bill going to help address our concerns? At the same time, they have been promised by the Prime Minister that he will reduce their power bills by $275. That was made before the default market offers came in place on 1 July 2022. As I said, we saw that prices over the three default market offers since are up $696. So South Australians are not seeing a reduction; they are in fact seeing a massive increase.

Again, looking at this reform, is there hope, potentially, that this amendment bill that we are discussing today will bring down power prices? If you look into what the stakeholders had to say, you would be doubtful. Looking at the stakeholders' feedback, they did acknowledge the need for the regulator to understand the wholesale contract market, but they did raise concerns about issues, including the scope of the new powers, the use of information gathered for wholesale market monitoring purposes, for other functions that the AER undertakes, and also the need for additional measures to accompany the broadening of the AER's powers.

If we talk specifically about what some of the stakeholders said and some of the concerns they raised in regard to the expansion of the AER's wholesale market monitoring and reporting function, ENGIE and Alinta say that the AER's new powers will have limited impact on its abilities to predict and respond to issues owing to the complex and unpredictable nature of the energy system.

We also had some commentary from the Australian Financial Markets Association and Australian Energy Council. The Australian Financial Markets Association is an industry association that promotes efficiency in Australia's financial markets. Some of their comments were that the AER's powers would extend beyond the areas where it holds regulatory functions, such as into financial markets. It goes on to say that it fails to fully appreciate the scale of the proposed reporting obligation and will have significant cost implications for both participants and the AER and is unlikely to deliver the anticipated insights.

They went on to expand on these points. In terms of the technological requirements, they made the point that their members' experience is that the AER has limited technology resources to assist in their information gathering and relies heavily on the provision of written responses and data in manually populated spreadsheets. With the significant amount of information that would be aimed to be collected, it is going to be very difficult to try to collate that mass of information by relying upon manually populated spreadsheets, according to the AFMA.

They also said the frequency at which the data is required to be reported is a significant driver of costs for both the AER and participants. When it comes to talking about information versus insight, they suggest that a targeted approach appears to give greater insight rather than collecting large volumes of data which then have to be processed. They go on to make the point that certain types of contracts should be excluded, including those concerning the transmission or distribution of electricity, the cost of fuel or underwriting the supply of gas or electricity.

After that, the Australian Financial Markets Association and the Australian Energy Council recommended that the reporting obligations, as a result, should be proportional to participants' impact on the market and this could mean either exempting small participants or reducing their reporting obligations proportional to their impact on the market. These small participants could have to go to a lot of effort to provide all this reporting, when ultimately they are not providing a big impact on the overall situation in the market. So the suggestion that was made there seems to have some merit.

In terms of other feedback around this bill, there was some stakeholder feedback regarding the compliance cost and also the risk of duplicate information requests, with some of the stakeholders raising concerns that the expansion of the wholesale market monitoring and reporting function would result in significant new compliant costs for affected market participants.

At the same time, several stakeholders also highlighted the potential duplication of information collection between the AER's proposed wholesale market monitoring function. Again, the Australian Financial Markets Association, in conjunction with the Australian Energy Council, said that a number of regulatory bodies currently collect data about energy markets and the associations are keen to avoid duplication and where possible the AER should rely on data collected by other bodies.

They made the point that the area where this is particularly relevant is in terms of ASIC. The collection of information on over-the-counter gas contracts and weather derivatives is done by ASIC. Additionally, the ACCC's east coast gas market inquiry has run from 2017 and is going to run until 2030. At the same time, the ACCC's electricity market monitoring inquiry has been running since 2018 and is scheduled to run until 2025. These have involved the provision to the ACCC of data on gas prices and offers under GSAs, and detailed electricity contract information.

Another area that was pointed out was in regard to AEMO's collection of information in respect of the Retailer Reliability Obligation, which requires market participants to report on hedging levels when a forecast reliability gap results in the AER making a reliability instrument. Those are some of the comments by AFMA. Some other comments in the same vein around potential duplication were made by the ACCC, who said:

It is important to recognise that the compliance burden on industry is increasing, including with the impending mandatory gas code.

They acknowledged the potential overlap with the ACCC's gas inquiry. The ACCC suggested that the AER:

…could potentially be required to systematically report on and review all bilateral trading agreements in the east coast gas market, including those that have no bearing on the wholesale gas market, which could impose an unnecessary burden on industry and a duplication of effort across the AER and the ACCC.

There was also some feedback from stakeholders raising concerns around the potential, because of the complexity of the contract market, of raising the risk that the Australian Energy Regulator may misinterpret contractual information provided to it by market participants. Some of the specific concerns included AGL saying:

Contract information may not be available in a format that is consistent across the industry or readily understood.

Alinta said:

Without understanding the reasons for the design and features of specific contracts, or the drivers for organisations pursuing particular commercial arrangements, the AER may reach incorrect conclusions.

Origin made the point:

Over-the-counter contracts are particularly unique and lengthy, increasing the difficulty of accurately interpreting them from a regulatory perspective.

Shell made the point:

There is a lot of information in electricity market contracts which may not be relevant to the AER and its aims, and the terms may be more indicative of the individual needs of the buyer and seller than representative of underlying market trends.

They are points made in relation to the potential for misinterpretation by the regulator when looking at the contracts.

Some other concerns also related to privacy and protection of confidential information. Some of the stakeholders raised concerns that the AER will gain access to large volumes of commercially sensitive information because of the expansion of its wholesale market monitoring function to both the gas and electricity markets. A specific concern from Origin's perspective is:

Along with holding more sensitive information, the removal of restrictions that currently exist in section 18D on the AER's use and disclosure of that information will increase the potential for confidential information to be disclosed.

While the stakeholders acknowledge that the amendments proposed in the bill would allow market participants to request the redaction of names and other identifying details of counterparties to contracts, there are still some concerns from the industry overall.

As I said at the outset of my remarks, South Australia is the lead legislator and the convention is for these changes to come into effect nationally, and they do that by passing through the South Australian parliament. As such, the opposition will provide our support for these amendments to the national energy laws and, as I informed the whip earlier, we will not seek to go into committee at the conclusion of the second reading debate.

I make the point that these changes, as I outlined for some of the other national energy bills that have come into this parliament recently, continue the trend of electricity and gas market reform, delivering market transparency and increased powers to market bodies, in this case the AER but also AEMO and the AEMC, in an attempt to address supply issues over the last few years. This legislation is not targeting the real need for South Australian families and businesses right now, which is to bring down energy bills, and that is certainly what the government should be focusing on right now.

Mr FULBROOK (Playford) (16:15): I am very happy to rise and speak in support of the Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill 2023. Today, we received the welcome news that electricity prices for households and small businesses will start to fall. This follows a draft ruling by the Australian Energy Regulator that default market cuts of 2.5 per cent, or $57, for average households and 8.2 per cent, or $481, for small businesses should be in place by July.

While we would like to see more as consumers, it is a far cry from the doom and gloom of the 25 per cent increases I understand were predicted by those opposite. While everything counts, it is still a small step and reinforces that there is still much more to do. This is where the bill before us has the potential to make further difference. While I have spoken about the default offer, this piece of legislation will hopefully empower consumers to drive a better deal for themselves on their energy bills.

You have to be hiding under a rock if you have not noticed privatisation has been a massive step backwards for consumers. What was supposed to have created a competitive market has instead developed a situation where consumers have suffered at the mercy of rising prices. Giving extra powers to the Australian Energy Regulator, as proposed in this bill, will allow it to investigate if retailers are making excessive profits at the detriment of consumers due to secret hedging strategies. Arguably, this sort of reform may not be necessary if the retailers were passing on savings. But who does not like letting a little bit of sunshine in?

I say this in the knowledge that I have become aware of a recently published report by the Australian Energy Regulator showing that wholesale electricity prices have fallen sharply. In the last quarter of 2024, the regulator's report showed that in South Australia average wholesale prices were $53 per megawatt hour. This was less than half the $114 per megawatt hour average in the previous quarter and down from $80 per megawatt hour in the same quarter of 2022. For the full year, prices fell by 44 per cent. As the minister stated—and this is reflected by the modest fall in the default offers—there can be no more excuses from retailers. They must pass savings like these to the consumers rather than what seems like the pocketing of extra profits.

What we are hopefully going to see is a benefit for all consumers, even those who have taken steps to insulate themselves from the worst of electricity price rises by investing in rooftop solar. It is reasonable to suggest that for those in a financial position to make the capital investment, solar has been an incredible success. The Australian Energy Market Operator's 2022-23 South Australian Electricity Report recorded that rooftop solar provided 17.7 per cent of the total annual generation for that financial year.

This was a significant part of the renewable energy mix, which dominates our power system, complementing the 46.9 per cent of generation which came from wind farms and the 8.8 per cent from grid-scale solar. It has put Australia in a position where renewables provided more than 75 per cent of the electricity generated in the 2023 calendar year, a world-leading achievement for a jurisdiction that does not have the benefit of hydroelectricity.

Arguably, the community I have the privilege to represent is at the epicentre of this movement, for they have been amongst the most enthusiastic in the nation in installing rooftop solar panels. The Clean Energy Regulator records rooftop solar installations by postcode and highlights that in Paralowie and Salisbury Downs, postcode 5108, residents have installed 8,300 solar systems as of December last year. This put the suburbs just outside the top 50 nationally in the number of systems per postcode area. In a separate investigation by the Clean Energy Council, postcode 5108 is down as the state's top suburb for solar energy production. I live in 5107, so I cannot ride personally on the coattails of this, but I am making my own personal contribution to bringing my neighbourhood's tally up.

Getting back to my neighbours in Paralowie and Salisbury Downs, it is worth celebrating that the aggregated capacity of 42 megawatts from just these two suburbs alone is like having a small-scale commercial generator. In Parafield Gardens and Greenfields, there are 4,130 solar systems, and in Mawson Lakes—a suburb of which I partly represent with the member for Florey—there are a further 4,131 solar systems registered with the Clean Energy Regulator.

The then Labor government, led by Premier Rann, paved the way for the uptake of solar power in our state. It was a visionary move that has been good for the planet and positive towards the household budgets of hundreds of thousands of South Australians. It is worth noting that the financial incentive to invest has changed markedly since the Rann government pump-primed the rooftop solar industry.

In those early days, the cost of a solar system was high and the capacity of the panels was comparatively low. Those early adopters who led the way enjoyed the benefits of the government-mandated 44¢ per kilowatt hour payment for what they fed back into the grid. It was the difference that made the investment worthwhile. Retailers added to their own feed-in solar as well, to further attract customers, taking the payment above 50¢ per kilowatt hour for many households in those early days.

Today, the cost of a solar system is far lower and the output capacity is far higher. While it served its purpose well, the early adopter 44¢ tariff scheme closed to new entrants in 2011, and in recent years the feed-in tariffs offered by retailers has reduced considerably. While as a government we are working hard to make rooftop solar an even more valued commodity, until this is achieved the best way for almost all households to use their solar power is to run as much of the household as possible during daylight hours rather than exporting as much solar energy as possible into the grid unless, of course, you are still on the 44¢ scheme. Running washing machines, air conditioners, dishwashers and so on during the middle of the day powered by the household's own solar is therefore the best way to save money and to recoup the cost of the investment.

It is encouraging that more than 350,000 solar systems and about 40,000 residential batteries are operating in South Australia according to SA Power Networks. I feel it is reasonable to say that this is the voice of consumers speaking. I make no secret that I want to see this number increase, and I take this moment to share a little personal story with the house on something I got up to over the summer period—riveting stuff.

As background, about this time last year my wife and I moved into our home in Parafield Gardens. We love it very much, and one notable feature of it was an existing solar system. With no battery and some ageing elements to the inverter, it is reasonable to say that its best days were behind it. On and off throughout 2023, I had been researching my options on what the best option would be to come as close as possible to taking the sting out of my energy bills. To cut a long story short, it was decided that I would hang onto the existing system and then go ahead with an additional 6.6 kilowatt PV system and a 9.6 kilowatt battery unit.

Before anyone accuses me of suggesting something that is out of reach of everyone, I want to make it very clear that, as I have my own home loan with one of the major banks, I was able to organise a green loan with a fixed interest rate of 3.99 per cent, repayable over 10 years. Given I understand green loans are available to most mortgage customers of the major banks, I want to share this, as it is my view this is accessible to many people. While I do not want to go into the exact specifics of what I have paid, it is reasonable to suggest the set-up payment was under $15,000, thanks to a little bit of shopping around.

Until I get a year's worth of bills I cannot say definitely but, according to the modelling done by several of the competing companies looking for my business, with a frugal family of three, and with winter being the possible exception, by and large the sting in my bills will be a thing of the past.

I am sharing this because taking out a loan like this means the repayments are now a fixed component to my energy costs for the next 10 years. Working on an amount of $15,000, it means that it will cost me about $71 per fortnight. This component becomes resilient to inflation, and after the system is paid off I understand there is a hopeful 15 years of operating life where it will cost me little to run. I know it is not for everyone, but hopefully it gives some food for thought on what products are out there and how they can be used in a way to smooth out bills and, looking ahead, take the sting out of things.

While consumers are choosing clean energy and taking back control of their energy consumption, we should not be oblivious to the 60 per cent of households that do not currently have solar. Subsequently, these consumers fully draw energy from the electricity grid to meet their total demand, and these people must be supported with good pieces of legislation like the bill before us. While solar can be a game-changer, it is not cheap and it is therefore imperative that we ensure 100 per cent of consumers have access to clean, reliable and, most of all, affordable energy. In calling for these extra powers, the Australian Energy Regulator says, and I quote:

The proposed changes will greatly enhance the AER's ability to assess performance, competition and efficiency in the wholesale energy markets and ensure consumers are not unduly impacted by energy prices due to an uncompetitive market.

It is worth noting that the AER wants contracts which relate to emissions to be expressly included in the ambit of what it can access. This request is relevant following the passage in our parliament of the Statutes Amendment (National Energy Laws) (Emissions Reduction Objectives) Bill 2023. Members may recall that this bill added emissions reductions to the objectives, which all energy market bodies must follow in their decision-making.

In a submission to the current reform proposal, but written before the emissions reduction objectives bill was enacted, the AER says, and I quote:

Emissions-related contracts can directly impact participant behaviour and performance of the wholesale electricity market, as they can influence which technology types in a portfolio a participant would choose to offer and at what cost. In addition, with the proposed integration of emissions reduction in the National Energy Objective, the AER will have a role in assessing whether there are features of the market that detrimentally impact the achievement of relevant emissions reduction targets.

The market bodies like the Australian Energy Regulator have been established to make the private markets perform efficiently and fairly. As lawmakers, we must give them the tools that they need to do their job. The powers to be granted in the bill are a new set of tools that will help the regulator accomplish their role. Given this, I am more than happy to commend this bill to the house.

Mr PEDERICK (Hammond) (16:27): I rise to make a contribution to the Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill. It was back on 8 June 2022 that energy ministers agreed to consider additional legislative reform, and that this was having a look at options to enable new gas and electricity contract market-monitoring powers as an immediate priority for introduction into the South Australian parliament, to ensure that the Australian Energy Regulator has the full information and visibility it needs.

On 2 August 2022 a consultation paper was released on amending the Australian Energy Regulator Wholesale Market Monitoring and Reporting Framework as currently set out in the National Electricity Law. Submissions closed for this on 25 August 2022. On 24 February 2023 the Energy and Climate Change Ministerial Council agreed to expedite a package of measures expanding the Australian Energy Regulator's gas and electricity market-monitoring powers, which the Energy and Climate Change Ministerial Council regard as an essential function for a well-regulated and stable east coast electricity market. This group has a view to passing this legislation as soon as feasible.

On 13 April 2023, the draft National Energy Laws Amendment (Wholesale Market Monitoring) Bill and consultation paper were released for a three-week public consultation, with submissions closing on 4 May 2023. As with previous changes to the national energy laws, South Australia is the lead jurisdiction. As such, the convention is that, as the legislation has been approved by the Energy and Climate Change Ministerial Council prior to it being introduced in the Parliament of South Australia, it receives bipartisan support.

The Minister for Energy and Mining introduced the Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill into this house on 15 November 2023. This bill seeks to amend both the National Electricity Law, set out in the schedule to the National Electricity (South Australia) Act 1996, and the National Gas Law, set out in the schedule to the National Gas (South Australia) Act 2008.

As mentioned previously, in February 2023, the Energy and Climate Change Ministerial Council resolved to fast-track a series of reforms designed to expand the Australian Energy Regulator's gas and electricity market monitoring powers. These powers were described as an essential function for a well-regulated and stable east coast electricity market. These reforms were considered by the ministerial council as imperative for the Australian Energy Regulator to be able to effectively monitor and proactively identify challenges to the energy market.

At present, the Australian Energy Regulator is limited in its ability to assess competition in the wholesale energy markets due to a range of reasons, including restrictions around obtaining and using information, a lack of visibility over electricity market contracts and the lack of a comprehensive gas market monitoring role. As such, the proposed reforms include changes to the National Electricity Law and National Gas Law, with the aim to:

1. remove provisions that currently limit the Australian Energy Regulator's ability to effectively fulfil its electricity wholesale market monitoring function;

2. empower the Australian Energy Regulator to monitor contract markets;

3. create an explicit wholesale market monitoring function for gas; and

4. create additional requirements for the Australian Energy Regulator in connection with its extended wholesale market monitoring powers.

The reforms to the Australian Energy Regulator's wholesale market monitoring and reporting function aim to provide the AER with the visibility it needs to identify and investigate issues in a timely and well-informed manner and make an ongoing assessment of whether these markets are operating competitively. They are also envisaged to enable the Australian Energy Regulator to better monitor electricity and gas markets to understand the drivers of volatility and the level of liquidity in the market to better anticipate and provide information in the event of future crises.

The proposed enhanced information-gathering powers are also intended to equip the Australian Energy Regulator to monitor the progress of the energy markets as they adapt and innovate as part of Australia's energy transition. These reforms are intended to enable the AER to provide information that can inform more targeted and effective long-term policy and regulatory reform.

This bill does affect us on the national scene, and we have to regulate it from our state first as the lead legislator in this process. It certainly affects what happens between this state, Victoria, New South Wales, Queensland and Tasmania because we are all interconnected. Down the track, when EnergyConnect gets finalised—it is taking a while; we have the towers on this side under our proposal to build that 800-megawatt line, connection through New South Wales from Robertstown, and this will complement the Hayward interconnector, which is 500 megawatts, and the Murraylink, which is a 200-megawatt underground line from the Riverland through to Victoria.

I believe that EnergyConnect will be vital into the future. I have talked about it here before. There is obviously a range of electricity generating still going on in this country. We notice—as coal was demonised—coal stations going and maintenance not even being carried out. The banks don't look nicely on coal-fired power, but the simple fact is that it is still part of the energy mix to keep the lights on in this state and in this country. Even though we do not have a coal-fired plant here, we certainly import some coal-fired power from the two connections we have through to Victoria, and obviously that connects into New South Wales, Queensland and Tasmania.

We certainly have a broad mix of generation. Obviously we have had lots of gas over the years. I have mentioned here many times that I used to work in the gas fields 40-odd years ago. It is a great industry and I really commend Santos for their project on carbon capture and storage, which will be a game changer in the Cooper Basin.

The work that goes on in the gas industry both here and interstate—some not so much interstate with bans on various programs in Bass Strait and that kind of thing—where the country has sourced a lot of energy and power in the past, is to be commended because gas will be a part of the mix for many years to come, probably at least 30 years most pundits say. We need to keep that in mind as the transition fuel because you do need base load power to keep everything running. Yes, we do have some great renewable resources as far as wind and solar goes, though I am a bit concerned that when these projects come to end of life they become waste products—the turbines and the panels. We do have many hundreds of megawatts of this type of generation across South Australia, and that has caused some controversy at times and still does.

It is fascinating if you have an electorate where one of these projects may or may not be going ahead, whether it is solar or wind. On the different levels of discussion that are had there are quite a few solar farms through the seat of Hammond. About 200 megawatts have gone in at Tailem Bend and there are various solar farms when you head out towards Palmer and Mannum. There have been other proposals that have not got off the ground or have not happened yet for whatever reason, but there are also some wind farming proposals around the place, and certainly Tilt. They have made some adjustments to the turbines they want to put in around Palmer, and that is going through its approval process. We will see whether or not that gets the go ahead.

Especially with wind turbines usually you get a couple of camps: the ones that don't mind looking at wind turbines and those that are staunchly against them. It is a bit like solar farms on some land. As much as it takes up land, it is a negotiated lease fee between the landholder and the company wanting to generate the electricity, but then there are other people who decide they do not want any part of it.

The simple fact is that we need to generate our electricity from somewhere. Since all the stations up in Port Augusta got bowled over, we lost about 500 megawatts in one or two fell swoops. We needed to enhance the energy we lost there, mainly with gas as far as base load power is concerned and, obviously, as we have heard from other members here today, a lot of rooftop solar, a lot of industrial solar.

I have my farmhouse at Coomandook and it is magnificent. You can only put a five-kilowatt amount of panels on the end of a single-wire return line but it is still pretty handy for keeping the power bills down. I know there has been conversation today about the early legislation where I think you were paid back about 44¢ a unit for your electricity and that has now decreased to 5¢ or 6¢.

At the end of the day, I look on that as a bonus because it is about what you can run during the day—the total opposite of what we used to do in the old days, I will say, where you wanted to run everything at night on J tariff. Now you certainly want to have everything cranked up during the day to utilise that solar power so that you are not paying—I will probably get this number wrong—the 38¢ or 42¢, or whatever it is, a unit with the price that you would have to pay for that power to come in.

I think I put my unit on in the second round, I will call it, not the first round of solar when the 44¢ per unit availability was on the line, and we legislated that here through the house. I think a unit then of a similar size to what I purchased was $20,000 with that early round and I think what we spent next time was about $12,000. They are remarkably cheaper now; they are probably down to $4,000 or something like that for a similar size. Then there is battery capability to go in if people want to go down the path of adding batteries.

It has been interesting—and I have mentioned this before—that the energy minister, Minister Koutsantonis, used to be a fan of EnergyConnect until we made it ours. It is odd because this will really enhance the use of our renewables, our 60 to 70 per cent of renewable generation in this state, so that when we have that oversupply of renewable energy we can export it straight into New South Wales, which then hooks up with the eastern market of Australia through Queensland, New South Wales, Victoria and obviously Tasmania.

When we have to, we can import power for a range of needs, whether it is hydro in Tasmania, coal in Queensland, New South Wales or Victoria, or whether it is gas-fired. The beauty of it is that exchange of electricity and those options that will happen will assist us into the future to keep the lights on, which is something the Labor Party did not do in their previous term of government, in September 2016 when all the lights went out in this state. We were sitting in this place, and we were one of the only places to have power because we had emergency generation that kicked in.

It was a very odd day. I was stunned that the whole state could go out, but it did. It was a massive disruption. I think it was taking people up to an hour and a half to go across the square mile of the City of Adelaide. Quite frankly, for those of us who were in Adelaide for the week, it was best just to stay put here. That should not have happened and we must do all we can to make sure it never happens again.

As I have said, as we need to retain gas supplies into the future, we must work with companies like Santos to make sure that they can do the searching, the drilling and the work needed to extract that gas because we will need it for a long time into the future. As I indicated, I really commend their carbon capture and storage, which is coming online very soon, and that will utilise depleted gas wells, especially close to the Moomba plant.

We have heard a lot about how good hydrogen is going to be. I struggle with the amount of renewable energy that is going to have to be generated. I have heard that up to 16,000 wind turbines will have to be built in the pastoral area around Whyalla and there will be thousands of acres of solar panels to generate power that will probably have a 4:1 loss ratio. To go into hydrogen, I am assuming it will utilise hydrogen as a battery essentially, but to have such a huge power loss to make green steel and other products, I just worry that so much power will be lost—but we will see. When we had the briefing from university professors, I was concerned that they were not sure how it would work—that really did concern me. We need to make sure we do all we can to have energy security in this state.

Certainly, another plank we need to look forward to into the future is nuclear energy. I have spoken about that. Our federal team, with Peter Dutton, has announced that moving forward if nuclear came on board probably the most likely site for a small modular reactor would be at Port Augusta. That makes sense. Everything was there before, as far as the coal plant and all the transmission lines that radiate across this state, because we do have some long leads, obviously. We are a small population compared with the other states. I think it is something we really need to look at.

I witnessed a lot of this when I went to England, France and Finland about eight or 10 years ago and had a look at what is going on there. I saw the canola crops out in full flower right up to the fence of a nuclear power plant. I saw towns in Finland competing to see if they were the ones that got the contracts to build the nuclear power plants and I also saw the research that is being done on putting nuclear spent rods under the ground, which would be a lot safer than the many hundreds of tonnes, probably thousands of tonnes, right across the world that are sitting on the surface.

Here at home at the minute, we have to make sure we get things right to make sure that we can keep the lights on and that we can do it economically. There are people suffering under this Peter Malinauskas government when we have seen power prices go up for households by $696 and for small business by $1,288. We must do better to make sure that people can thrive and their businesses can thrive.

Ms THOMPSON (Davenport) (16:48): I, too, rise to speak to the Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill 2023. Firstly, I think it is important that we establish how our power prices are set and why our bills look the way that they do, because it can be complicated.

Right now, we are operating in a market that sees retailers offer fixed prices to consumers across a 12-month period. To do this, providers are estimating the likely cost of buying energy to power people's homes and businesses in the months that follow. As a result, the forward price of the energy market is responsible for setting what we pay as consumers. As energy prices fall, households rightly expect a reduction in their power bills, but movement in the wholesale market is not passed along immediately because, as we know, those fixed price offers are already in place.

Next, we have to factor in costs associated with transmission, which accounts for approximately 40 per cent of an energy bill, along with maintenance and construction of South Australia's distribution infrastructure, including the highly distinct Stobie poles. Once upon a time, this would have fallen within the scope of the Electricity Trust, or ETSA as it is better known. Unfortunately, a typically short-sighted Liberal privatisation cast aside this reliable, efficient and valuable state asset some 25 years ago. Now we pay monopolies to manage regulated assets instead.

Members interjecting:

The DEPUTY SPEAKER: Members to my left, you were heard in silence.

Mr Whetstone: Yes, I know.

The DEPUTY SPEAKER: Yes, well, if you know that then I suggest you give this speaker the same courtesy. If you cannot, I suggest you leave the chamber. The member for Davenport.

Ms THOMPSON: Matters of ownership aside, international price shocks driven by Russia's invasion of Ukraine have subsided locally, fuelled largely by South Australia's plentiful generation of solar and wind. The Australian Energy Market Operator has confirmed that wholesale prices in South Australia almost halved from $64 per megawatt hour in the 2022 December quarter to $33 per megawatt hour during the same reporting period one year on.

Pleasingly, our investment in renewable energy generation is not just driving down wholesale prices, it is also helping South Australia break free of the Eastern States, where ageing coal-fired infrastructure is growing increasingly unreliable. Now it is up to private electricity retailers to recognise their costs are falling and pass resulting savings along to South Australian households, instead of treating government investment in renewable energy as a get-rich-quick scheme.

So where does that lead us? This bill increases the capabilities and responsibilities of the Australian Energy Regulator as it works to ensure our energy markets are performing competitively. For starters, we are bolstering the regulator's arsenal by providing it access to critical information on electricity contract markets. Today, the regulator relies on information available within the public domain. However, we know that deals between generators, finance intermediaries and retailers are often done behind closed doors. As it stands, we have a regulator fighting with one arm tied behind its back, and we believe that both the market and the consumer will benefit from a regulator that has full and thorough oversight of the industry it is entrusted with monitoring.

It is important to remember, too, that the Australian Energy Regulator is responsible for setting the default market offer (DMO). The DMO was enacted in July 2019 and is considered a safety net for customers who cannot or will not shop around for a new electricity deal. Households and small businesses on standard retail plans are protected by a maximum price as determined by the Australian Energy Regulator, but, understandably, it is difficult for the regulator to determine a fair and reasonable DMO when it lacks timely and regular access to each market participant's dealings. That is exactly what we are working to improve on for the residents and small businesses of South Australia, New South Wales and south-east Queensland with the introduction of this bill.

Another of this legislation's core functions is to appropriately equip the regulator to monitor and report on happenings within the wholesale gas market. It is well documented that Russia's invasion of Ukraine put upward pressure on gas prices globally, and while we cannot control the movements of foreign governments from South Australia, we can put reasonable consumer protections in place closer to home. That is why I am pleased that we are removing the regulator's shackles, and tasking it with identifying parties that exercise market power and seeking out factors that may be detrimental to competition in gas markets.

It is fair to suggest that these changes are welcomed by the consumer watchdog, which said that the AER receiving the power to monitor the electricity hedging contracts market will improve transparency and policy development. They said:

This will protect competition and facilitate the effective functioning of the electricity market by supporting the provision of risk management options to smaller, non-vertically integrated retailers.

The Public Interest Advocacy Centre was similarly effusive in its praise, saying they:

…consider these changes to be in the long-term interest of consumers, bringing greater transparency to the market and encouraging more efficient and competitive market outcomes.

Feedback received to date has been loud and clear. This is sensible policy to be delivered by the South Australian parliament for households and small businesses spanning several jurisdictions.

Sensible energy policy, as we know, is a hallmark of the Malinauskas Labor government. With our Hydrogen Jobs Plan and a commitment to establishing a world-leading hydrogen power plant in Whyalla, it is no secret that all eyes in the energy sector are firmly on South Australia, which is why it is so important we deliver legislation specifically in relation to energy regulation that tackles the big issues head-on.

Our ambition extends beyond the hydrogen space and beyond regulatory frameworks, too. South Australian Labor's track record is unparalleled in the renewable energy space, with more than 75 per cent of all electricity generated in South Australia last year having derived from clean sources, being wind and solar. It comes as no surprise, at the very least, to members on this side of the chamber, that such significant generation of renewable energy has resulted in South Australia recording wholesale electricity prices far lower than the black-coal states of New South Wales and Queensland. Make no mistake: this long-term vision is paying dividends for people living and working in South Australia right now, and rest assured we are not done yet.

Finally, while we are talking renewable energy, it would be remiss of me not to mention that for the first time in the National Electricity Market, South Australia entered a period of negative operational demand. When we speak of negative operational demand, we are referencing a period of time in which electricity generated by rooftop solar systems exceeded the demands of an entire state.

We know people are doing it tough, and we know energy prices in particular have proven a burden. Right now, everything points to retailers having an opportunity to deliver families and small businesses the relief that they have been crying out for without impacting on their bottom lines. To assist in that process, we are giving the Australian Energy Regulator the teeth and the visibility it needs to see that our energy markets are working for all. I look forward to delivering this change for those living in South Australia and beyond, and I commend this bill to the house.

Mr WHETSTONE (Chaffey) (16:56): I would like to make a contribution to the Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill. I think it is very important. I think most members of this place understand that we do need national energy laws that work and that are transparent, and we would like to think that South Australia will be the lead jurisdiction. The Australian Energy Regulator is limited. There are restrictions for obtaining and using information, a lack of visibility over electricity contract markets and a lack of comprehensive gas market monitoring.

I have a very good friend who is a retail provider, and he has given me a much clearer understanding of the current state of play. Of course, the proposed reforms are aiming to remove provisions limiting AER's ability to effectively monitor the electricity wholesale market, to empower the AER to monitor contract markets and to create an explicit wholesale market monitoring function, particularly for gas. The reforms give AER the visibility it needs to investigate issues promptly. At the end of the day, it is about making better ongoing assessments of competition within the marketplace and also helping understand the drivers of volatility and level of liquidity.

To anticipate and provide information in future crises, reforms should allow for effective long-term energy policy that protects South Australians. Whether it is an everyday house, a small business or a large business, it does affect the flow-down. The costs, particularly by the large businesses and the large conglomerates, are felt by all. What we cannot pass down is the cost of a household power bill. That is what is hurting everyday households. That is what is hurting everyday cost-of-living pressures that South Australians are dealing with.

Back at home, where I live in Chaffey, we do need efficient and affordable energy, because that is the critical element for attracting investment. For many years, the main component within a small business has been the cost of labour, but in today's environment we are seeing that the cost of electricity is the number one cost in a day-to-day business operation. Obviously, extensive solar opportunities are helping some individuals.

I will get to clean energy, renewable energy, in just a moment. There is some truth in how we do need to have clean, renewable energy, yes, but currently, with the transition from coal, from gas and from traditional forms of power generation, we are now paying the price for that conversion into renewables.

Obviously, regional communities are facing unique challenges; they are more heavily restricted, but remember that they cannot grow without reliability and they cannot invest with that detailed information. They cannot invest with a transparent understanding of what the cost of power will mean to their business. We must understand that infrastructure investment needs to be addressed more proactively and supply needs to be more reliable.

I will just touch on some of the larger power users in my electorate. Obviously, being a food-producing electorate we have to pump a lot of water and we also have to pack a lot of fruit. To do that takes a lot of power. I am seeing a number of those businesses, whether they be larger or smaller, reacting to looking at ways that they can be more efficient in how to drive the cost of their power bill down.

Speaking to a number of the owners and proprietors today, we have Venus Citrus, which is a citrus packhouse at Loxton. Their power bill is about $167,000 a year but they have installed a significant amount of solar and batteries. They are also now getting to the point where they are having to install all sorts of new technology with LED lighting, making sure that they sensor light all of their infrastructure so that the light follows the movement in their shed. That is helping to bring prices down at every opportunity.

The Central Irrigation Trust is the largest irrigation trust in South Australia and probably one of the largest in Australia. They pump about 110 gigalitres of water to I think just over 10 districts at a cost of about $5 million. To help with their business model they are now in joint power contracts in a cooperative power negotiating capacity with other businesses, so they are all buying wholesale power to reduce their power costs as well as installing panels and batteries. They are now actively involved in all of those power-generation committees and advisory boards doing everything they can to advise and to give people an understanding of what it means to their business with these spiralling power costs.

Mitolo Family Farms is a broadacre horticulture family farm, and they grow and pack mostly potatoes and onions. It is a significant business. Their power price is $8 million a year. They have looked at ways that they would like to reduce the cost of power, but they are growing with the market trends and putting more and more land under potatoes and onions for the growing consumer demand.

With the cost of living, people are now consuming more carbohydrates; they are eating more potatoes and more onions because it is a cheaper form of food. People are restricting themselves from eating red meat, they are restricting themselves from eating seafood, they are restricting themselves from eating food sources that are more expensive. So, as a family farm, Mitolo have many sites—not just in the Riverland. The majority of their irrigation is in the Riverland, Mallee and Lower Murray, and they are now looking at ways to implement power cost-saving ways, particularly with the takeover by the Canadian Pension fund.

Accolade Wines is quite interesting as they use about 7,000 kVA a year. We are not putting a price on that because they pay for their power whether they use it or not, and that is a distinct disadvantage to that business model. They have wholesale contracts. They are a business—they are a big winery, one of the biggest wineries in the country. That just shows you the vulnerability of a food or beverage provider. They have a season, and during that season they are flat out and have the meter spinning as fast as it will go. When things slow down through the cooler months and the winemaking slows right down, they are still paying the same power price because it is an agreed market price.

The Renmark Irrigation Trust pumps about 34 gigalitres of water. They have renewed their contract, and they did it at an opportune time—they came out of contract and went shopping. They were able to reduce their power price from nearly $1 million down to $650,000 just with a five-year contract. If we look at other packhouses, Costa pumps around 25 gigalitres of water, but they also run significant packhouse operations. Their cost for running that business now is a major component of the cost of putting a box of fruit into the market. That cost is, of course, passed on to the consumer and that is adding pressure to day-to-day household prices.

I was speaking to Bill Moularadellis at Kingston Estate. His power price is about $2½ million a year. He is looking at ways of reducing the cost to his business model. His words were, 'If I reduce the demand, it has to reduce the cost in a broader sense.' But the only way he sees fit to reduce the cost of his power is to go off grid by installing solar panels and batteries, and also with a mixture of diesel because that is a cheaper form of energy generation than going into the marketplace and dealing with large amounts of cost.

I have been speaking with a number of businesses. Another family business, Red Mud Foods, has a large farm enterprise and winery. They pay about $100,000 per month for their farm and they pay about $80,000 per month for their winery. That is getting to the point where it is a very fine line as to whether they make money after paying wages and getting product to market. It is all dependent on the commodity price—as it is with many—but it is now becoming very evident. They pump about 9½ gigalitres of water. It shows a very distinct trend of people wanting to buy affordable food but the issues of the producers providing that food to the marketplace are ever-challenging. It is now more evident than ever that it is becoming very expensive to grow food, just as it is very expensive to buy food.

I think some of the vulnerability with the power situation—where it is hurting many businesses—is the contracts. When are those contracts signed? Are they signed at an opportune time? Is the contract signed when they come out of a contract? We have seen in some instances their power prices have doubled from a previous contract that they had signed over a period of time to a new contract. Sometimes, they need that certainty.

They cannot go into the spot market. Many might know that the spot market is highly volatile. The spot market can go from almost zero cost of power to a price that is restrictive to the point where they have to turn their pumps off, they have to shut their sheds down and they have to lay off employees because it is just simply not viable to keep that operation running when we see high spikes in power prices. That is usually when the wind is not blowing, and potentially when the sun is not shining.

I want to touch on a number of contributions by members in this place. We talk about having 75 per cent renewables in South Australia. That is great, but by the same token, the cost of power is a very small part of your bill. If we were to break that down, a number of members on the government benches have said how wonderful it is to have solar panels on your roof and maybe batteries if you are lucky enough, but what they do not tell you is what the network charges are, they do not tell you what the metering charges are and they do not tell you what the market charges are.

That is what is hurting people's bills. That is what is hurting every South Australian family at the moment. That is what is hurting every South Australian business. The wholesalers, the generators, the poles and wires all have fixed costs. We have gone from a couple of major power generators in yesteryear to now thousands of power generators, which is ideology: generating a little bit of power off your roof, sometimes storing a bit of power in your battery.

But every South Australian is picking up the tab. Mark my words: it might feel good, it might sound good, to have 75 per cent renewables, but it is costing every South Australian a significant amount of money for the fixed charges. We cannot just be spellbound by the cost of electricity. That is a small element of your bill, remembering that it is the other charges that are costing so much money.

I will just give everyone a bit of an understanding. At the old Holden site, they used to use 35 megavolts, MVA. When the current desal plant was built, they thought it was going to use a significant amount of power, somewhere in the vicinity of 100 MVA. They now know that running that plant uses about 40 MVA. BHP at Olympic Dam are the main power consumer in South Australia. They use 100-plus MVA at any one time. OneSteel, which is now GFG, the Gupta enterprise, use 50 MVA.

It will be interesting to see how the traditional power will convert over to what I think is a little bit of a pipedream, this government's hydrogen model. It is an experiment. It is going to come at a significant cost to taxpayers, and it has to be proven. I am a little sceptical because there is nothing there that is giving me hope. It will be an untested form of power generation in South Australia, how it is going to work.

By the way, EnergyConnect, the interconnector, is all very good. It is basically putting an extension cord between all of the southern and eastern states so that we can generate power, we can push power into other states when they need it and we can draw power into South Australia when we need it. It is a great idea, but we still continue to talk about solar and batteries. We continue to talk about a lot of the renewables. I think that is a great thing to talk about because I am a supporter, but where is the base load going to come from? We cannot continue to say that we are going to get lots of solar panels, lots of fans and lots of batteries to generate the base load that this state needs because that is a simple furphy.

The state would need to be covered with fans, it would need to be covered in solar panels, to have the base load needed for some of these big users of power, and not just the big miners, the big steelmakers and the manufacturers: do not forget about the food. You cannot eat steel, you cannot eat hydrogen, but you can eat the produce that comes out of the fields, which need reliable power to keep the water pumped, to make sure that the pack houses can keep the lights on and to make sure that we can load the trucks and get it to market so people can put food on their table at an affordable price.

I must say, for what it is worth, speaking with a number of large power users, providers and generators, the best way to put transparency into the marketplace is by decoupling your bill. To do that is not playing politics: it is just plain math. At the moment every bill, whether you are house or a business, has four major components: we have a network charge, which is large; we have an energy charge, which is small; we have a metering charge, which is almost invisible to understand how it works; and we also have market charges. If we were able to decouple those four components of our power bill—so when you get your power bill next time, just turn the page over and better understand what the component of energy is in the overall cost of your power bill. It will probably make your jaw hit the floor because the energy component on the bill is very, very small.

The network charges, the metering charges and the market charges are what need to be exposed so that we can better understand where those charges are coming from, and then we can tackle those charges individually. We can decouple and we can have a level of transparency, because at the moment it is very hard to understand what your power bill represents. For the day-to-day mums and dads who do not understand, they look at the overall bill charge and they are gobsmacked because they do not understand the layers that make up the charge of that bill.

As I understand it, the national energy law, the Australian Energy Regulator, we have to support it—yes we do—but we need more transparency in the marketplace. We need to better understand what our bill represents and what makes up that charge so we can actually tackle those individual charges and then better understand how to actually reduce our power bill on a day-to-day basis.

Ms CLANCY (Elder) (17:16): I rise today in support of the Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill 2023, which seeks to add to the capabilities and responsibilities of the Australian Energy Regulator. Like many of us in this place, I am regularly contacted by members of my community concerned with the price of electricity. This is an issue that was raised with me as a candidate and something that I and many other South Australians have been concerned about for some time.

When constituents bring inquiries to me, no matter what the issue is about, I always try to—and it is often impossible not to—avoid providing the context of mistakes that previous governments have made. However, when it comes to energy prices, South Australians are well aware of the mistakes of the past in privatising the Electricity Trust of South Australia and the effect that mistake still has on energy prices today.

South Australians were also bitterly disappointed by the former Liberal government's decision to sell off the operation of state-owned generators, which would have shielded us by reserving energy for emergency use. This bitterly disappointing decision has left our state more vulnerable to international forces and subjected to increasing unreliability and higher costs of coal-fired power stations interstate.

During the winter of 2022, South Australians saw the worst of this vulnerability. The ongoing invasion and conflict in Ukraine—

Mr Whetstone interjecting:

The DEPUTY SPEAKER: Member for Chaffey, you were heard uninterrupted. It doesn't mean people agreed with what you said. Member for Elder, continue uninterrupted please.

Ms CLANCY: Thank you very much for your protection, Mr Deputy Speaker.

Mr Whetstone interjecting:

Ms CLANCY: Sorry, did that just happen again?

The DEPUTY SPEAKER: Member for Chaffey, can you just zip it please.

Ms CLANCY: I was silent during your contribution, member for Chaffey. Maybe give it a crack.

Mr Whetstone interjecting:

The DEPUTY SPEAKER: Member for Chaffey, you are warned for the third time. Next time you will be leaving the chamber.

Ms CLANCY: During the winter of 2022—

Mr Whetstone interjecting:

Ms CLANCY: —farewell, member for Chaffey—South Australians saw the worst of this vulnerability. The ongoing invasion and conflict in Ukraine, high international fuel prices, fuel supply shortages and generator outages contributed to unprecedented high prices and price volatility in the wholesale electricity market. Events such as those experienced in recent years have demonstrated the risks that energy consumers are exposed to when there is a lack of effective competition in and visibility of wholesale electricity and electricity contract markets.

It is vital to South Australian energy consumers and consumers in other jurisdictions that those responsible for monitoring these markets have the capacity and tools to look out for their best interest. The Australian Energy Regulator plays this important role, ensuring consumers have access to reliable, clean and secure energy.

The regulator is also responsible for ensuring consumers pay no more than necessary for the energy delivered to their homes and businesses. As part of this role, the Australian Energy Regulator sets the annual default market offer for electricity, which is the price cap for consumers on standing offers and which also acts as the reference point for all other contracts for households and small businesses on market offers.

Like many of you, I am sure, I was incredibly pleased to see this morning that the regulator announced their draft default market offer of cuts—not increases, as scaremongered by some of those opposite, but cuts—of 2.5 per cent, or $57, for average households and 8.2 per cent, or $481, for small businesses. The regulator is also responsible for determining the maximum revenue which monopoly businesses, such as SA Power Networks, ElectraNet and Australian Gas Networks, can earn and for monitoring markets and performance to enforce compliance with energy legislation.

At present, the Australian Energy Regulator relies on publicly accessible information to monitor the wholesale electricity market, such as auction processes run by the Australian Energy Market Operator and the futures market run by the Australian Securities Exchange. This restriction was placed on Australian Energy Regulator under the national energy laws to protect commercially sensitive information. In practice, however, these restrictions only serve to hamper the regulator's capacity to gain sufficient visibility of the market to perform its role.

As we saw during the winter of 2022, energy retailers struggled to access electricity contracts to hedge their retail load against high spot prices. Without access to the entire board, the Australian Energy Regulator and the commonwealth could not see the information required throughout this time period. This bill seeks to assist the Australian Energy Regulator to fulfil its role by allowing the regulator the visibility it needs to identify and investigate issues in a timely and well-informed manner and make an ongoing assessment of whether the market is operating competitively.

Outside of the publicly accessible information the Australian Energy Regulator has access to, much of the trading conducted in the electricity market is done through private bespoke contracts between generators, finance intermediaries and retailers. Without access to this information, the Australian Energy Regulator cannot easily estimate what retailers are actually paying to purchase the energy they then sell on to households and small businesses. This particularly impacts the regulator's capacity to set the default market offer fairly for consumers.

Since the South Australian Liberals privatised ETSA, it has been up to good governments at all levels to empower consumers to take back control of their energy use and costs. A really successful example of this is in my electorate, where the City of Mitcham's Community Renewables Program is running. This program, managed by solar energy supplier ShineHub, was introduced to help households and businesses across the council area to install solar and battery systems for no up-front costs. So far, over 760 households have signed up for solar panels and/or batteries, which has offset a total of three power plants and is helping to build a virtual power plant to support the local electricity network.

The City of Mitcham's ultimate goal is to develop a community energy plan that sources the majority of its power from this local virtual power plant. This includes all residents in the council area, not just those who go solar, and a number of other local governments in South Australia and in other states have seen this project by the City of Mitcham and are looking to implement it themselves.

While this initiative is fantastic, it is still limited to those households with the financial capacity to participate in the program. While renters will benefit from the strengthening of a local virtual power plant in the long run, they will only receive the benefits in the short term should their landlord be willing to participate. That is where reforms such as those included in this bill are so important, empowering consumers and ensuring that profit-seeking retailers are not leaving ordinary South Australians behind.

I would also like to take this opportunity to talk about a new community battery program. Through a $1 million grant from the commonwealth Community Batteries for Household Solar initiative, two community batteries will lower annual electricity bills for around 600 eligible participants by as much as $562 per year. These batteries are in Magill and Edwardstown. The one in Edwardstown is not in my part of Edwardstown but is just over the border in my friend's seat of Badcoe, on Towers Terrace. (Hello to Jayne and Quinn, who I am sure are undoubtedly watching my excellent contribution.)

These batteries will help us to continue to decarbonise and will store excess energy during the day when renewable energy is abundant and then make it available at night during periods of high demand or when the grid needs support. Housing SA tenants living near these community batteries will be invited to join the SA Virtual Power Plant scheme, with tenants closest to the two batteries in Magill and Edwardstown receiving the offers first.

I would also like to put on record my strong support for our government bringing forward our renewable energy target by three years. We knew that we were definitely going to be able to reach our target of 100 per cent renewables by 2030, so we thought, 'Let's actually make it a bit tougher. Let's give ourselves a bit more of a push.' Now we have a target to reach 100 per cent renewables by 2027. Our previous Labor government and this Labor government's commitment to renewable energy in our state is something we can be very, very proud of, and I am so pleased that we continue to be leaders, not only in our country but around the world, in increasing renewable energy use.

In closing, I would like to thank all those who have helped bring the bill to this place, including those who participated in the two rounds of public consultation, the Energy and Climate Change Ministerial Council, and our Minister for Energy's staff, particularly Chris. I also really want to thank our Minister for Energy. He is incredibly knowledgeable about this space. He works incredibly hard. I am proud that we have a Minister for Energy who proudly voted against the sale of ETSA back in 1999—what a legend. Thank you to the rest of his team. I proudly commend this bill to the house.

Ms HOOD (Adelaide) (17:28): I, too, rise to speak on the Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill 2023, and I would like to begin by taking a little trip down memory lane, recalling what was said in this place by the most senior members of a former Liberal government in South Australia. These members, a Liberal Premier and a Liberal Treasurer, were speaking about the expected benefits of privatisation of the state's electricity assets.

Of course, at that time these assets were owned and operated by the government in the interests of the South Australian people—it was good times. The then Liberal Premier, John Olsen, said on 18 March 1998:

The outcomes for reform of the State's electricity assets, to be achieved over the next few years, are as follows:

an efficient, competitive electricity industry in South Australia, within the context of the national electricity market and competition policy;

sustainable lower electricity prices and choice of supply for consumers;

an appropriate regulatory environment to encourage competitive outcomes and protection for consumers;

long term security of supply;

repayment of budget supported debt;

reduced risks to taxpayers;

Yes, that was the Liberals' 1998 promise of electricity privatisation: I quote, 'sustainable, lower electricity prices'.

The view was echoed by the then Treasurer, the Hon. Rob Lucas, who only recently served in the former Marshall Liberal government again as Treasurer. Privatisation would, Mr Lucas hoped, and I quote, 'lead eventually to lower prices for industry and business'. That was said on 25 March 1999. Yet, here we are, some 2½ decades later, when privatisation has almost definitely not delivered lower prices for households, industry or business. I seek leave to continue my remarks.

Leave granted; debate adjourned.

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