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Legislative Council - Fifty-First Parliament, Second Session (51-2)
2007-10-18 Daily Xml
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ELECTRICITY (FEED-IN SCHEME—RESIDENTIAL SOLAR SYSTEMS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

(Continued from page 1021.)

The Hon. P. HOLLOWAY (Minister for Police, Minister for Mineral Resources Development, Minister for Urban Development and Planning) (16:29): I thank members for their contributions to this debate and their indications of support. I was asked a number of questions during the debate. The first was: who will pay the metering costs? The answer that I have been provided with is that consumers will pay all costs. The next question was: does ETSA have administration costs? I am advised that people who install photovoltaic buy the panel and meter, as is the case now.

The next question was: do retailers have administration costs? ETSA pays for the administration, etc, and passes the costs on to consumers. This is the current arrangement. It is likely to be only a small increase in these costs due to feed-in, if there is any increase at all. ESCOSA will assess the amount of the increase. Retailers might have some costs. These will be recovered in the market, as they are currently. The next question was: can they offer a higher rate? My advice is that, as per section 36AD(2) of the bill, it will be a condition of a retailer's licence that they pass on all money they receive from ETSA for their electricity generated by solar panels. As is currently the case, retailers can pay as much as they like for their electricity: 44¢ a kilowatt hour is the minimum.

The Hon. Sandra Kanck then asked about wind turbines. My advice is that trials are underway in Adelaide, Perth and Melbourne. A number of planning issues remain, but it is certainly the intention to consider any progress on micro wind turbines as part of the mid-term review. The Hon. Mark Parnell then asked a question about why 44¢ was the figure, and why a higher figure was not used. This is not the only measure being put in place to tackle climate change. There is a portfolio of responses, including (as mentioned) the national emissions trading scheme, which has been supported by this government since 2004.

Then there is the government's purchase of green power. I refer the honourable member to the government's greenhouse strategy of tackling climate change if he wants some more information on that. The figure chosen—the 44¢ a kilowatt hour—has to balance the benefit to photovoltaic owners with the costs that are borne by other consumers. We believe that this is a good balance. I also remind the council that we do have the mid-term review and, clearly, the effectiveness of that figure can be assessed then.

The Hon. Mark Parnell then asked about small business. I point out that this is not intended to be a scheme for people to make a profit, but the scope of the scheme will be on the agenda for the mid-term review. The Hon. Mark Parnell then discussed the greenhouse implications. Again, I make the point that each kilowatt of photovoltaic installed replaces 1½ megawatt hours of electricity from the grid, since each megawatt hour on the grid results in about one tonne of emissions, and we expect the current three megawatts to grow severalfold over the life of this scheme.

Some of this will, no doubt, be due to the legislation before us—and, again, we have the mid-term review and, certainly, this issue of greenhouse implications will be looked at when that mid-term review is undertaken. The Hon. Mark Parnell then spoke about the impact on the price of electricity. If we saw photovoltaics grow from the current three megawatts to 10 megawatts (which is more than triple but likely by the end of the scheme), the cost spread across all householders would be less than $5 per household per year.

The Hon. Ms Kanck said that she would not benefit because her panel is too small; it will only power her lights. The point is that feed-in will give her a benefit whenever (a) her solar panel is working (that is, it is sunny) and (b) her lights are turned off. The feed-in, based on net metering, provides an energy efficiency incentive: use as little power as possible during the day to maximise the earning and benefit from the scheme.

The Hon. Mark Parnell then said that our renewable energy position is due to New South Wales policy. I wish to address that question. We have a consolidated planning regime for wind farms to facilitate them. South Australia has been working hard since 2004 to secure a national emissions trading scheme to put a cost on carbon and to provide the necessary certainty to support greenhouse abating technology. Earlier this year, the Prime Minister finally agreed, after years of pressure from the states, to implement an emissions trading scheme.

A question was also asked about who will pay the GST. My advice is that consumers pay GST on the electricity they buy. That is the unavoidable truth. When businesses sell things such as electricity they can claim input tax credits, because they are registered for GST. If you are not registered for GST, you cannot claim an input tax credit. The commonwealth, of course, makes the rules in relation to the goods and services tax. The Hon. Mark Parnell then referred to the dramatic variability in wholesale electricity prices, and he implied that domestic photovoltaic owners should benefit from very high peak prices.

I make the point that consumers are not exposed to spot market prices. Electricity retailers are exposed to them, but they are large, sophisticated businesses, which make complex financial arrangements with merchant banks and other market participants to manage their risk. Consumers cannot reasonably be expected to do this. On average, if consumers were exposed to the spot market—and, presumably, that would mean to buy and sell—they would be financially worse off than they are at the moment.

The Hon. Mark Parnell then asked about the arrangements for renewable energy certificates and this legislation. I point out that this bill does not change the arrangements for renewable energy certificates at all. Consumers who install photovoltaic systems will be entitled to some renewable energy certificates under the current EMRET scheme. This might change in the future. Anyone with a renewable energy certificate, whether consumer or generation company, can sell that REC to whomever they please. The feed-in does not change this. The legal position around ownership of the electricity generated by photovoltaic panels is quite complex. This bill is not intended to change it. Whether or not retailers can sell the power generated from these panels will not change. I trust that addresses the issues raised during the debate and, again, I commend the bill to the council.

Bill read a second time.

At 16:40 the council adjourned until Tuesday 23 October 2007 at 14:15.

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