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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2025-02-05 Daily Xml
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Power Prices

Mr PATTERSON (Morphett) (12:01): I move:

That this house—

(a) notes that South Australian working families and small businesses are still enduring some of the highest power prices in the country under the Malinauskas Labor state government;

(b) notes that South Australia has the highest quarterly average wholesale cost of electricity in the nation in the third quarter of 2024, up 76 per cent year on year, according to the Australian Energy Regulator;

(c) notes that electricity prices for South Australian working families have risen by $798 per year under the Malinauskas state Labor government, according to the Essential Services Commission of South Australia;

(d) acknowledges that these rises in energy prices have caused intense hardships for South Australian working families and small businesses and have increased the cost-of-living burden;

(e) condemns the Malinauskas Labor government for having their costly and experimental hydrogen power plant, which will not reduce power prices for South Australian working families and small businesses, as their only energy policy;

(f) condemns the Malinauskas Labor government for their continued inaction on energy, resulting in sky-high power prices for South Australian working families and small businesses in the midst of a cost-of-living crisis; and

(g) calls on the Malinauskas Labor government to develop an energy policy that will support South Australian working families and small businesses during this energy and cost-of-living crisis.

South Australian working families and South Australian small businesses are having to endure some of the highest power prices in the nation under the Malinauskas Labor government. This motion is a call for action for this government from this parliament to focus on bringing down power bills for South Australians. I fear this call will go unheeded.

This time last year I moved a similar motion, urging the government to take action on skyrocketing power bills, and I moved that motion because in 2023 South Australia recorded the highest power bill increase in the nation under the watch of the Premier and the Minister for Energy and Mining. Sadly, since then, prices have continued to escalate out of control. This is not surprising. The current government had no plan at the 2022 election to ensure electricity supply was both affordable and reliable.

In addition to that, the Premier has put the same person in charge of South Australia's energy system, a system that has a direct effect on household and business power bills, and the Premier thought that that would work. Unfortunately, now we have South Australian families and businesses who are paying for it.

I spoke at length in parliament about specific examples, such as pensioner Rick Wahlheim, whose bill has surged. There are examples of businesses as well. One that so many know here in South Australia is Drakes, which employs over 6,000 people. Their power prices have surged and that has an impact on grocery bills here in South Australia. They, of course, are specific examples of the pain that is being felt. That pain is highlighted by reports, such as from ESCOSA, which annually provides the average retail household energy bills here in South Australia. It showed that, to June 2024, electricity bills had risen to $2,621 here in South Australia, the highest ever on record.

Of course, there have been three of these ESCOSA reports handed down under this Malinauskas Labor government and in each of those reports it shows that power bills have gone up for households. In fact, it shows over those three reports that the average power bill for South Australian households under the Malinauskas Labor government has gone up by $798. That is nearly a 45 per cent increase on household bills. Small businesses have also experienced a 45 per cent increase to their skyrocketing power bills. Of course, these figures are more than statistics: they represent families that are struggling to make ends meet, they represent small businesses that are fighting to survive and also a state economy that is being held back by poor energy policy.

Instead of focusing on plans to bring down power bills, the Malinauskas Labor government is on track to spend $700 million on their hydrogen plans that they have admitted will not bring down power bills for households or small businesses. Let me reiterate that: it is not aimed at delivering cheaper electricity bills for struggling South Australian households. How do we know this? In parliament previously we have asked the Minister for Energy whether their expensive hydrogen power plant will bring down power bills for South Australian households and, if so, by how much. The minister's response would leave working families alarmed. 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.

Adding to that, in Budget and Finance we asked the CEO of the Office of Hydrogen Power SA if this power plant would bring down power bills for households. On 23 separate occasions he was asked about this, and all that could be responded was, 'The targeted objective of this power plant is to lower prices for industrial customers.'

As I have also outlined previously in parliament, the Premier and this government have completely changed the nature and scope of what was promised to South Australians prior to the state election regarding their hydrogen plans. Labor have dropped their promise of 3,600 tonnes of liquefied hydrogen storage in order to avoid massive cost blowouts in the order of hundreds of millions of dollars. Instead, their modelling and their request for tender is based on 100 tonnes of hydrogen storage. That is less than 3 per cent of what was promised to the South Australian electorate.

Labor have also given up on their promise to construct a base load combined cycle turbine, instead opting for a peaking open cycle turbine. This change, going from a base load generator to a peaking generator, fundamentally again changes the nature of the project. Labor have also admitted that their plant will not be operational by the end of 2025 as they promised. No doubt this will cause delays and impacts on costs.

We have seen across the world multiple respected bodies, such as the US Department of Energy, S&P Global Commodity Insights, Bloomberg and, in Australia, the CSIRO, show that the cost of electrolysers which produce the hydrogen has increased significantly since Labor's hydrogen policy was announced in 2021. That is even before there has been a massive jump in construction cost inflation that has occurred in the last three years, surging by over 30 per cent.

The Malinauskas Labor government's costing document from 2021 has been shown to be based on flawed assumptions and the reality is that this hydrogen plant could cost up to $1 billion with significant delays in its delivery. That is, of course, without including the cost of the transmission line upgrades and also the water pipelines into this facility. But still the government claims that this plant will cost $593 million.

At the same time, Labor is desperately changing the scope of this project as well, downscoping it, as there is no way that the original project as promised could be delivered for $593 million. Of the four main promises in their 2021 Hydrogen Jobs Plan, four out of four of those promises are either broken or in serious doubt. This is hugely concerning. Of course, this has major implications in South Australia because we were promised that hydrogen generation will bring down power prices.

It is at the point now where the Malinauskas Labor government have totally changed the commentary about this project. All they want to talk about is green steel, never about their hydrogen power plant and generating electricity. Green steel was never a core focus of their policy when it was announced. All the focus was on electricity generation. In a 20-page document there was only one mention of green steel, but it is clear that the Premier and his hapless minister are moving the goalposts on this, having to make things up as they go as they desperately try to justify spending so much taxpayer money on a project which really is an amorphous blob, changing form whenever the opposition probes on another flaw. This government's focus on green steel is of little comfort to taxpayers who will be funding this when, in this parliament, the Premier has had to admit that green steel is probably two decades away.

Sanjeev Gupta, from GFG, said that the electric arc furnace and direct reduced iron plants to be installed at the Whyalla Steelworks are dependent on increased gas supply to Whyalla. Note: not increased hydrogen supply or any hydrogen supply. That is because any path to lower emission steel in Australia that can be produced economically and at scale in the next two decades will have to transition from coal to gas, no matter how much the Premier tries to spin a coal to hydrogen transition. Let me reiterate: the opposition on this side of the chamber support any coal to gas transition.

By sheer necessity at the moment we know the trouble at the steelworks trying to get the furnace back online. To keep the steelworks running now, GFG are having to throw all their resources at just getting the steelworks running now on coking coal for the next five years plus rather than spending what is a significant capital investment to try to save the Premier's dreams.

We now have the absurd situation where the Premier is getting increasingly angry at GFG. The opposition certainly has concerns around contractors not being paid and the effect on the town of Whyalla. But is the Premier getting angry at GFG for not paying creditors or is he actually getting angry because it exposes the folly of him being sucked in to allocate massive taxpayer dollars to a green hydrogen dream that is now a green hydrogen nightmare? There is a sucker born every minute but why is it that so many of these suckers have to be on that side of the parliamentary benches, going right to the top, starting with the Premier and the Minister for Energy? I suppose if you think about it, with a timeframe of 20 years, off into the never-never, that gives the Premier more chance to talk about his fantasy.

At the same time, we have the Minister for Energy in this parliament now trying to blame the project delays to their project on GFG's challenges. I remind you again: there was no mention in their 2021 policy that the project could only proceed with GFG. Was it not about providing electricity to industrial customers? But again, the Premier and the energy minister are making it up as they go. They are totally out of their depth.

Remember, just in October last year, we learnt that the Premier's signature hydrogen plan is ultimately a hoax after it was revealed by the opposition that the government has put out a tender to truck in significant amounts of gas for up to two years. How much gas? The tender asks for four hours of gas a day. That is just a massive amount. And worse, rather than supply it through a pipeline, the gas is going to have to be trucked in from another location using a fleet of diesel-powered B-double trucks.

Again, the Premier and the energy minister are making things up as they go but they are refusing to reveal how many B-double trucks are involved. It is absolutely shocking. South Australians were never promised this, were never promised they were going to truck in gas to cover up the Premier's hydrogen hoax. The fact that they are really seeking to prop it up with two years' worth of gas trucked in just begs many questions around what is going on with the electrolysers. How long will they be delayed and how much will they cost? As I said, the cost of the electrolysers has gone right up.

Worldwide in the last year, we have seen many businesses pull out. We have seen Fortescue, a champion of hydrogen, pushing that, saying they are going to have to delay their plans to beyond 2030. We have had Origin Energy pull out as well. Their CEO has been quoted as saying that the economics of clean hydrogen projects increasingly fail to stack up. Woodside pulled out of hydrogen in January. Damningly, just this week, we have seen the new Queensland government pull out of the project in central Queensland. It is understood that what was first quoted as a $12.5 billion plan by 2022 had surged to $14.7 billion and since then has escalated significantly as well. The Queensland Treasurer is quoted as saying:

It would have required significantly more than $1 bn in state government funding…We are focused on our energy generators providing affordable, reliable and sustainable power…

That is certainly something that the opposition here also agrees with.

While South Australian families and small businesses are paying the highest power bills on record, now the AER has revealed that wholesale prices for the calendar year 2024 are up by 28 per cent on the calendar year 2023. The Premier is prioritising his green hydrogen plan saying it will be operational by the end of 2025, but instead we are getting gas-powered turbines propped up by a fleet of diesel-fuelled B-double trucks. But, of course, the arrogant Premier thinks that he knows best, and he knows better. The massive global companies with expertise in energy are having to withdraw, so no wonder South Australians are paying the highest power prices in the nation.

Mrs PEARCE (King) (12:16): I rise to oppose this motion. I actually find it quite baffling given it was the former Liberal Olsen government that privatised the electricity market, it was the former Liberal government that—

Members interjecting:

The DEPUTY SPEAKER: Member for King, can you resume your seat. Members on my left—

Mr Whetstone interjecting:

The DEPUTY SPEAKER: Member for Chaffey, I am speaking. Members on my left, your side was heard quietly and respectfully. I expect the same, and the first one to raise a voice will leave the chamber. Member for King, you have the chamber's undivided attention.

Mrs PEARCE: Thank you very much. As I was saying, it was also the former Marshall Liberal government that privatised our backup generators and failed to deliver its promised cuts to average electricity bills. The reality is that there continues to be a complete policy vacuum when it comes to the Liberals and energy.

I am more than happy to run through some of the inaccuracies in this motion. I will start with paragraph (a). The premise underlying this claim is incorrect. The Australian Energy Regulator's most recent Annual Retail Markets Report found that South Australian electricity prices were among the lowest in the National Electricity Market. The AER report for 2023-24 recorded South Australian households with average consumption and contracted to the median market offers would pay $2,231 a year. This was below other states like Tasmania ($2,748) and New South Wales ($2,646). In the AER's analysis, Queensland was the only state in which households paid less. The AER did not record equivalent data for Victoria, WA or the NT.

As was highlighted by the minister in question time yesterday, the member for Morphett continues to be fixated on cherrypicking to be able to make an argument. What the member for Morphett fails to highlight is that South Australia was impacted by 27 high-price events in quarter 3 of 2024. The AER makes it clear that during the high-price periods in South Australia, multiple planned network outages also led to constraints limiting flows on the Heywood and Murraylink interconnectors. These limitations impacted South Australia's ability to access low-priced generation.

In some high-price events, the regulator observed a high number of rebids by generators, sometimes leading to high prices and at times reducing forecast high prices. What the member for Morphett has not included in his motion is that compared to quarter 3 in 2024 where South Australia was impacted by these high-price events, we have seen a 60 per cent decrease in prices in quarter 4 of 2024.

It is encouraging to note that South Australia's average wholesale prices have fallen by 32 per cent in the 2023-24 financial year, but in quarter 4 of 2024, South Australia had a record number of negative price intervals due to a combination of better weather, high rooftop solar output and continued increase in generation from renewables. Negative prices led to a quarterly volume weighted average price of $9 per megawatt hour lower in South Australia.

The Malinauskas Labor government is continuing to stand alongside households and the small business community and recognises that the rising cost of living, including rising energy prices, is hitting everybody's budget. We know it is disproportionately hurting those on low and fixed incomes, which is why we have more than doubled the concession for eligible households. With respect to small business support, the South Australian government is delivering on a $20 million energy-efficient grants program through round 2 of the Economic Recovery Fund, which is, of course, aimed at driving investment in energy-efficient equipment for small businesses.

The program is providing grants ranging from $2,500 all the way to $50,000, matched dollar for dollar for small businesses to be able to invest in more energy-efficient equipment or improvements to be able to reduce and manage energy usage and costs, which will result in ongoing reduced energy and other operating costs. I am pleased to share that almost 1,400 applications have been received, surpassing $31 million worth of grants.

The state government recognises the cost pressures that small businesses are facing and has decided to remove the round 2 cap to allow all eligible applications to be considered. The majority of applicants have been from accommodation and food services, the retail trade and manufacturing sectors. Most have applied to invest in solar panels with batteries, replace non-LED lighting systems and invest in more energy-efficient appliances. This is a significant investment from the government to provide tangible energy cost savings for small businesses.

One of the great arguments we have always had with our opponents is that renewable energy is cheaper, it is cleaner and it is the way of the future. What we are attempting to do, as we did with our Hornsdale battery, is to store the overabundance of renewable energy during low-demand periods, such as the middle of the day. Batteries are suitable for short duration, but to get to 100 per cent renewables by 2030, we need a renewable form of long-duration energy storage.

When the Liberals inherited a grid with an oversupply of renewable energy, they put in place a system to turn off mum-and-dad rooftop solar remotely. Rather than just earthing that energy and turning it off or not producing that energy, our plan is to manufacture hydrogen and store it. At times of peak demand you are able to use that stored energy in a gas-fired turbine designed to lower wholesale power prices in the spot market. Those benefits flow through to everyone.

In 2017, Labor commissioned a study into South Australian green hydrogen and established the Hydrogen Roadmap for South Australia. Either the Marshall government were already on autopilot by this stage or they saw merit in our work and contributed to it by publishing the Hydrogen Action Plan in 2019. Fast-forward to today and we see a complete backflip from those opposite—now hydrogen is 'experimental'.

Climate change is real. The release of carbon into the atmosphere by human endeavour is causing the heating of the planet. We need to be able to decarbonise our electricity generation, and we are doing that by embarking on new technologies. We are investing in infrastructure and we are investing in policy work, such as through our recent green paper and upcoming white paper on the energy transition. Members opposite are welcome to get on board.

In contrast, the Malinauskas Labor government has recently embarked on a journey to map out a comprehensive set of energy policies. Policies will include energy efficiency standards for housing, a smooth change to electric vehicles, and ways to ensure that no-one is left behind in the transition to renewable energy.

We are already a global leader in the transition and we have already made considerable progress towards our goal to achieve net zero emissions by 2050, but the government wants to go further and seize the opportunities to make sure that the energy transition delivers maximum benefit to consumers. We want to further reduce greenhouse gas emissions and decarbonise our economy. This is because we are proud to play our part in the global effort that is needed to protect our planet for future generations and because it will position South Australia to grow jobs and prosperity as we use our bountiful clean energy to lower household bills and drive industry, giving us a trade advantage in a world which is moving decisively to greener products and services.

We are investing in infrastructure and we are investing in policy work, like through our recent green paper and upcoming white paper on the energy transition. Again, I welcome members opposite to get on board, and with that I oppose the motion.

Mr PEDERICK (Hammond) (12:25): I rise to support this motion by the member for Morphett. This motion reads:

That this house—

(a) notes that South Australian working families and small businesses are still enduring some of the highest power prices in the country under the Malinauskas Labor state government;

(b) notes that South Australia has the highest quarterly average wholesale cost of electricity in the nation in the third quarter of 2024, up 76 per cent year on year, according to the Australian Energy Regulator;

(c) notes that electricity prices for South Australian working families have risen by $798 per year under the Malinauskas state Labor government, according to the Essential Services Commission of South Australia;

(d) acknowledges that these rises in energy prices have caused intense hardships for South Australian working families and small businesses and have increased the cost-of-living burden;

(e) condemns the Malinauskas Labor government for having their costly and experimental hydrogen power plant, which will not reduce power prices for South Australian working families and small businesses, as their only energy policy;

(f) condemns the Malinauskas Labor government for their continued inaction on energy, resulting in sky-high power prices for South Australian working families and small businesses in the midst of a cost-of-living crisis; and

(g) calls on the Malinauskas Labor government to develop an energy policy that will support South Australian working families and small businesses during this energy and cost-of-living crisis.

Listening to the member for Morphett before, I could not agree more with the words that he said. What we see in this state are some of the highest power prices in the country. It is forcing people to go out of business, it is forcing people to not be able to pay their power bills and it is really having an effect on the cost of living of South Australian families and businesses.

What we have seen in this state from the Labor Party over the years is a continual failure when it comes to power policy. We saw that when the coal plant got knocked down in Port Augusta years ago. The first orders to the contractors were, 'Take the gas axes and the angle grinders to the turbines. We don't want to see them going again,' so there was no coming back. Then we had the total power blackout on 28 September 2016. The whole state went out under the Labor Party—the whole state. It had never been seen before in this state. It was absolutely outrageous.

Then we see this constant drive for heavily subsidised renewable power. The thing is, what Labor have forgotten is you need to have base load to keep that power going. Coal has been demonised, so those plants have shut down or are shutting down across the country. Gas is a vital transition fuel as we move forward. We will need gas for many decades to come.

This is where we are seeing the flaws with this so-called hydrogen power plan for the Upper Spencer Gulf. It simply will not work. Why have I not had any university professor, any engineer, anyone from the mining industry organisations tell me that it will work? Why has Woodside pulled out? Why have Twiggy Forrest and Fortescue pulled out of hydrogen and, most recently, as of this last week, the Queensland government? Because it simply does not work at this scale. It simply does not work.

The whole premise of this so-called green power is based on tens of thousands of solar panels that have not been installed and thousands of wind turbines that have not been installed. The thing is—and this is where the rubber hits the road—there is power loss from generating green power to put in the so-called hydrogen storage. You lose 80 per cent on the transfer, so you only end up with 20 per cent of the power out the other end.

Then we see the real facts of how these turbines are going to work: they are going to be powered by gas for at least four hours a day, or that is the four hours we know about. Where is the gas coming from? There is nothing in the pipeline at Whyalla, so the gas has to be trucked in by B-double diesel trucks. It just does not stack up.

The costs are blowing way out of proportion. It is going to be at least $1 billion, and climbing. We see the Labor Party and the Malinauskas Labor government and their Minister for Energy and Mining trying to justify the cost and keep it to the budgeted cost of $593 million by taking storage out of the system and by taking other parts out of the contract to make this hydrogen plan work. It is supposed to be built this year, but I do not even know if there is a peg in the ground yet.

The sad thing is that governments do not have money to pay for these failed experiments; it is taxpayers, the good taxpayers of South Australia, who will pay for this so-called green dream. Well, it is going to literally turn into the biggest green nightmare in this state. In fact, it has already been said to me that this could be the next State Bank disaster for this state. It is just based on ideology, not based on the reality that the gas has to be trucked in with diesel trucks. I can foresee that gas will be the main generator here, so why not just put the gas turbines next to some gas pipes and make it work properly? Just do it properly. It is just ridiculous that the state is being put through this.

We see Tom Koutsantonis, the minister, trying to put the blame on Sanjeev Gupta. Sanjeev Gupta needs to get on and pay his bills. He needs to pay his contractors and he needs to pay the royalties that have backed up for many months—heading towards 12 months—for this state. No-one else would get let off. I can see what is coming. When this all falls over—and I believe it will, because they are already setting themselves up because they will not answer one straight question about whether the hydrogen power plant will be running in the next decade and when it will be generating this so-called clean energy—the Premier and Minister Koutsantonis will blame it on Sanjeev Gupta.

But then in another breath the minister says that Whyalla is too big to fail—and it is too big to fail. You cannot lay the blame on someone who is at risk of losing that business because of the so-called link between the hydrogen power plant and the steelworks. As the shadow minister, the member for Morphett, indicated there is barely a word in the whole policy document about linking it to the steelworks in South Australia.

The reality is, this is a debt bomb. It is a hydrogen debt bomb for this state. I just cannot believe the arrogance with which the government believe they are smarter than everyone else globally, as the shadow minister has indicated to the house, and everyone else across this country who has said, 'It's too expensive, it will not work or it just won't happen.' Woodside do not know, Fortescue and Twiggy Forrest do not know, the Queensland government do not know, and Origin do not know. Seriously? They do know and that is why they are pulling out.

This is too risky a project because it just will not work. The sooner the Minister for Energy and Mining takes his own advice and admits he is wrong, as he indicates to others—stand up, admit you are wrong and move on—the better it will be not just for Whyalla but for the whole of South Australia.

We can then get on with plans, like those of Peter Dutton and the federal Liberals, in moving ahead with nuclear energy. I would love to see that happen when Peter Dutton wins the next federal election. We need to have real base load supporting our renewable energy systems throughout this state so that we can just get on with life in a practical way and a meaningful way.

Mr HUGHES (Giles) (12:35): I thought I had better come down and add a few words. I guess there has been a long history in the Liberal Party, especially at a federal level but also at this level, where that support for Whyalla has not existed, and this goes back over many, many years. The advantage of being around for a long time is you have seen the various iterations of Liberal Party policy when it comes to the steel industry in this country.

Members interjecting:

The DEPUTY SPEAKER: Member for Hammond!

Mr HUGHES: You can go all the way back to the Button steel plan and the federal intervention in order to secure the steel industry nationally in Australia. At that time, when the Hawke government went to that election, they said, 'Within 100 days we will have a national steel plan,' and that is what they did. What did the Fraser Liberal government say at the time? Absolutely nothing. There was no commitment to the steel industry in this country. They would have been happy to see the steel industry go the way the car industry subsequently went in this country.

Members interjecting:

The DEPUTY SPEAKER: Member for Morphett, do you wish to leave the chamber?

Mr HUGHES: So there has never been any real commitment to the steel industry in Australia. It has always been that, if something has to be sacrificed on the altar of the free market, irrespective of the consequences, that is what we will do. One of the challenges that the opposition seems to have is that when you shift to new technologies there is always going to be a transition. You are not going to have the pure result in a year or two years; it takes time.

In the real world there actually are projects around the world, especially in Sweden, where the move is to green iron and steelmaking, with the HYBRIT project. A large demonstration plant has already been established in Sweden. That plant has supplied specialised steel to the car industry in Europe, and it has supplied steel to the aviation industry and a number of other industries. When you look at a timeline, they talk about full-scale production in 2030. So these things do not happen overnight, and Sweden and HYBRIT are the first movers when it comes to doing it globally.

Clearly, in Whyalla we are not going to be going into a hydrogen future overnight. That is going to take time, and we do have to be able to produce hydrogen commercially at scale, but South Australia has some incredibly strong comparative advantages compared to other parts of the world. We will be able to get there, but it is not going to happen overnight and there will be a transition and, especially for industry, gas is an important part of that transition.

We need to be able to deliver gas effectively to Whyalla if the transition is going to be made. If that transition happens, we are not going to be trucking in gas. If you have a direct reduction iron plant in Whyalla, which is the direction that has been flagged, as the replacement for the blast furnace, as a means of adding value to the massive ore resources in the Middleback Ranges, that in combination with an electric arc furnace is the direction we should be going in.

When you look at the real world, at the moment around about 130 million tonnes of iron and subsequently steel is produced by direct reduction iron technologies. There is nothing fanciful about this. These units are essentially off-the-shelf units that you can go out and purchase, and it will need gas as a transition. In that transition, as hydrogen becomes more available commercially at scale, you can bleed hydrogen to add to natural gas. Ultimately, we will get to a point where we can do hydrogen commercially at scale.

A number of projects have been mentioned around the country that, for one reason or another, companies and governments have pulled away from. When you look at those projects, most of them were predicated on the basis of exporting hydrogen overseas—they wanted to export hydrogen overseas—and that has a lot of complexity around it and lots of challenges. The thinking in this state and elsewhere is that if you have the comparative advantages, if you have those renewable energy resources that we have in this state, if you have some of the other advantages that we have in this state, such as billions of tonnes of magnetite on the doorstep of an existing steelworks, that is the way to go. It is to add value to our resources here in this country.

Indeed, I was reading something the other day, and POSCO in South Korea—who occasionally gets mentioned in this place—were looking to outsource their iron and steelmaking to Australia. They were looking at the north-west of Australia, because they realised the export of hydrogen to South Korea had a whole raft of challenges. So it made more sense to do stuff in Australia where you have the mineral resources, where you have the massive renewable energy resources.

It is the absence of vision on the other side that really concerns me. It is always about trying to score points instead of coming to us and asking, 'What is your vision for the Upper Spencer Gulf?' The Dutton nuclear plan, when you look at Port Augusta, is a modular reactor. Look at the levelised cost of electricity or the estimated levelised cost of electricity when it comes to a modular reactor. Commercially, they do not exist at the moment; there is less than a handful around the world. The thing is, you then have to start attacking organisations like ARENA and the CSIRO because they will come out with the levelised cost of electricity.

So the plant that is proposed for Port Augusta—which will never happen—will massively add to our electricity prices in this state, because what you will have to do is attempt to curtail the cheapest form of electricity. You do not have to take my word for it. Look at the CSIRO report; it comes out every year. Look at wholesale generating costs. It is clear that nuclear is not a cheap option in the Australian context. Some other countries long ago sank capital into nuclear. They did not have the same options as we have now, so it is not a sensible policy direction to go in. In Whyalla, we are talking about a transition.

We have those massive magnetite resources in the Middleback Ranges. One good thing that GFG SIMEC has done is establish the JORC reserve in the Middleback Ranges. The JORC reserve estimate is around 1.5 billion or so, but there are probably another two, three or four billion tonnes of magnetite on Whyalla's doorstep. The thing about the magnetite on Whyalla's doorstep is that it is particularly suited to use with direct reduction iron units.

So we could potentially produce iron and steel in Whyalla for generations to come if we get things right. Ultimately, there needs to be that transition to produce iron and steel in a manner that is not going to impact the atmosphere. We have to actually get down to the hard work of determining how it is that we are going to make this transition.

I would be the first person to say that there are challenges. In my community I say that this will not happen overnight, this will be a transition that will take time. That transition initially has to go through natural gas, but we will get there. In the absence of vision we have absolutely nothing. I acknowledge that it is the role of the opposition to critique the government on the question—that is entirely reasonable. But I ask them to get back to some basics.

If the iron and steel industry has a long-term future, it is about making that transition in the iron and steel industry globally to a greener future. That will happen. We talk about power prices for households, and again it is amazing. The federal Liberal government opposes the concessions for electricity.

Mrs Hurn interjecting:

The DEPUTY SPEAKER: Member for Schubert, you can leave the chamber for 10 minutes.

Mrs Hurn interjecting:

The DEPUTY SPEAKER: No, I have called your name out a number of times.

The honourable member for Schubert having withdrawn from the chamber:

The DEPUTY SPEAKER: With all the interruptions by the opposition, I will allow the member to finish his sentence. You can resume your seat until I call you, member for Frome.

Mr HUGHES: As was said by the member for King, there has been a lot of cherrypicking when it comes to electricity data. You can pick certain months, you can pick certain quarters, you can pick a particular year, but it goes up and down. Wholesale prices go up and down. At times South Australia's wholesale prices are significantly less than Queensland and New South Wales. At other times it is higher.

Ms PRATT (Frome) (12:46): Mr Deputy Speaker, I appreciate you giving me the call. I rise with fulsome support for the motion as addressed by the member for Morphett. I will speak to the motion in detail shortly, but I think the house would find it refreshing that we have heard from the member for Giles, as we do not hear from him very often on these issues.

Ms Stinson: You can't get him to shut up!

Ms PRATT: I feel sorry for him because, as the member for Badcoe interjects, what can he possibly say in criticism of the government's own policy—it is only one—on energy. As the chamber is discovering yet again, it will do absolutely nothing to drive down the increasing costs for consumers in South Australia.

The original motion as introduced notes that 'South Australian working families and small businesses are still enduring some of the highest power prices in the country under the Malinauskas Labor state government'. The motion captures the essence of this issue in the following ways: 'that electricity prices for South Australian working families have risen by $798 per year', and that is according to ESCOSA. It also notes that 'these rises in energy prices have caused intense hardships for South Australian working families' in my electorate and your electorates—there is no avoiding it.

We absolutely condemn the Malinauskas Labor government's initiative for this hydrogen power plant. It is a vanity project that will not reduce power prices by their own words. The opposition stands today in concert; it is a call to action to call out the government's commitment. It is doubling down on its stubbornness to back itself in on an initiative that really, in its transition, to quote the member for Giles, is absolutely equating to rising power prices in our state.

Households are almost $25,000 worse off per year since Labor came to power in 2022. South Australians certainly are feeling that across all aspects of their households. This is a government that has wrong priorities, a government that is running a false economy, a government that is wasting our money. To go back to 1 July last year, we saw the government's support of the application of a GP payroll tax. Since 1 July last year South Australian patients have been subject to that additional impost of the payroll tax being applied to GPs and then being passed on through consultation fees.

That really, for some households, has led people to being forced to choose between paying their power bills or paying their healthcare fees or cost-of-living prices like groceries. The reality is that fewer people can afford a pub meal for one, let alone a whole family.

We know that Labor is heavily influenced by national Greens policy, and they are certainly waging a war on the commercial and the domestic use of natural gases. At the state level the Labor government is stuck, because of course they desperately need gas to firm up renewables. Those words come from the minister himself, the member for West Torrens.

What we understand better in detail through the great work of the member for Morphett—and his summary today starts to elucidate exactly what the government is planning for our state—is that this smoke and mirrors theory, this vanity project and this experiment of a hydrogen power plant is being underpinned by natural gas being trucked in. Four hours a day of gas supply is required, coming on B-doubles being fuelled by diesel. It is hypocrisy writ large by this government to double down and back itself in to a project it should walk away from. We do not trust its costings. It has to be calculated at closer to $700 million as a total project cost, but there is nothing to say it will not get up closer to $1 billion. They have a track record of poor form on managing major infrastructure projects.

Reflecting all of that, in this very building the CEO of Santos as the guest of the Minister for Energy and Mining, the guest of the member for West Torrens, told us that this world could not function, this planet could not function without plastics, concrete, steel and heating, and all of them rely on gas. There is no hiding from the fact that we are going to be a state, country and planet dependent on gas. The Chamber of Mines and Energy is watching closely, because there is a big question mark over the government's ability to deliver on this vanity project. When it comes to any suggestion, particularly by the Greens, that we move away from gas what is very clear is that no amount of renewables can deliver the industrial base load power required for manufacturing. So I would say they need to go back to their textbooks.

If we bring the cost of doing business and the cost of living back to South Australian businesses and families, of course, just over 12 months ago the situation facing businesses was dire, and it certainly has not improved. The head of the AHA, David Basheer, made public comments, representing one of his own pubs and the industry, that we were likely to see chicken schnitzels, a wholesome family meal, being priced at $40 for a single serve.

Mr Telfer: Shame!

Ms PRATT: Shame, indeed. The cost of doing business, including the cost of running gas in the back kitchens that feed the multitudes of South Aussies that love a country pub meal—the government's policy is really putting that at risk. In my own electorate the very pub that was recognised as serving among the best top 10 chicken schnitzels in regional South Australian pubs is the same pub that now finds it has a $16,000 additional cost to its power bills per quarter. Businesses cannot survive these hikes in power bills, and the government has one policy, and that is an experiment on the West Coast that will not drive down power bills.

My own community certainly have their fortunes tied to the government's decision-making. When I reflect on the Spencer Gulf and all of the communities that are tied to the government's decision-making I do need to come back to health, because it does not look like the government has a plan to support Whyalla in any other way than to fully commit to its vanity project.

Residents know their fortunes are tied to steel and to the decisions that Sanjeev Gupta is making. We know that contractors are sitting around with nothing to do, we know they are not being paid. If I were looking to move to this region, looking at what childcare and housing and health options were available for my family, I certainly would not want to have a wife who was pregnant in the last 12 months where the midwifery services were cancelled, were not available, were diverted because the government is so focused on its project that it cannot concentrate on anything else.

The government, the minister, is quick to jump on a plane and fly over when, tragically, 250 jobs are lost or stood down, but they will not lift a finger for the 500 in my own electorate and area of Two Wells for the tomato virus. This government's priorities are wrong, and we are in a position to prove that every day.

My own community's fortunes are certainly tied to the decision-making of this government when it comes to its policy settings on energy, on the cost of doing business. For every pub in every country town that I represent, for every business, factory, plant or household, I want the government to understand that we are suffering.

Mr WHETSTONE (Chaffey) (12:56): I rise to support the member for Mawson's motion, because it is an important motion that impacts every South Australian. What we are currently seeing is that this government's whimsical, ideological theme around power generation in South Australia is putting our economy, our family businesses, at risk. It is making South Australia, in some way, a laughing stock within the national economy.

Labor promised that electricity bills would come down by $275. They have skyrocketed; in fact, they have risen by $798 per year for an average working family in South Australia. We are paying some of the highest power prices in the country. Families are currently going through hardship around cost of living, and it is all based around the cost of electricity. Many South Australian families are now on payment plans to be able to pay their bills, pay their electricity bills. They cannot afford to put food on the table. People are not turning on heating or cooling in their homes because they are too scared of what it is going to cost.

It really is just an absolute furphy, yet we have a Premier with his ideology of hydrogen for green steel, and we have the local member from Whyalla, the member for Giles, coming in here accusing the opposition of being to blame for some historic event that happened 30 years ago. It is an absolute outrage. This government should hang its head in shame that it is basing this green steel, this hydrogen plant, on ideology that potentially will not stack up.

The member for Whyalla talked about what is happening in Sweden. He cannot tell us what that program is going to cost, he cannot tell us—and the Premier cannot tell us—what sort of product will come out of the hydrogen plant by the end of the year. When will we have green steel? How much more will the taxpayer have to fork out for what is an ideological whim? The energy minister cannot give us any detail—or he will not give us any detail.

As the member for Hammond rightly said, the government is going to be looking for someone to blame, because we know that the current set of circumstances is that we are going to put $593 million, taxpayer dollars, on the table to start this project kick off. We all know that government projects blow out by 100 per cent, 200 per cent. This one has no bottom in the bucket, so it is a real concern that the taxpayers are going to fund a Labor government's whim or wish or policy on hydrogen to create energy for green steel production at Whyalla.

Whyalla cannot tip over. We understand that, and we do not want Whyalla to tip over, but we can see the writing on the wall. We have a government that is looking for someone to blame for an energy policy that will not stack up. It is an absolute disgrace.

In my electorate some of the large power consumers are consuming power to produce food. At the moment they are installing diesel generators to keep their pumps running so they can pump water to grow food, so they can put food on the table. You have to remember that you cannot eat hydrogen, you cannot eat steel. You have to eat food, and you have to eat it for three meals a day. That is what the people on the farms are doing, paying exorbitant power prices, and that is reflecting on the cost of food. We are getting record power prices coming into those farms, and they have to pass the costs on, so the cost of food is prohibitive.

Debate adjourned.

Sitting suspended from 13:00 to 14:00.

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