Green Power

The Hon. M.C. PARNELL (15:03): I seek leave to make a brief explanation before asking the Minister for Sustainability, Environment and Conservation a question about the purchasing of green power in the State Strategic Plan.

Leave granted.

The Hon. M.C. PARNELL: On 31 December this year, the last vestiges of government commitment to purchasing electricity from renewable sources will disappear. Through the State Strategic Plan, target No. 65, the government committed to purchasing 50 per cent of electricity needs from renewable sources by 2014. This was then deferred in the 2012-13 Mid-Year Budget Review. Given that this purchasing of green power was always designed to be additional to the carbon price, the state and national renewable energy targets and other national initiatives, stakeholders remain perplexed that the government would abandon this crucial promise when it had been identified as a strategic priority.

Furthermore, the government appears to have made no effort over the last five years to increase the green power purchased, and the percentage has not lifted above 20 per cent, which was the amount in place when the Strategic Plan was written. I know of at least one businessperson who, as recently as September this year, moved his project (a concentrated solar thermal project) to Western Australia. I am told they were ready to build in South Australia but they just needed the certainty of government commitment to purchasing green power from renewable generators.

I am advised that the loss of this company and the plant build in regional South Australia is an opportunity cost to this state of some 2,000 high-tech jobs in construction and 75 ongoing jobs for the next 30 years, and that does not include flow-on jobs and other opportunities for South Australians. Finally, I understand that, despite the fact that renewable energy forms about 40 per cent of the overall energy generation mix, the South Australian government could still only ever manage purchasing 18.3 per cent green power for the 2013-14 financial year. My questions to the minister are:

1. Why did the government break the strategic commitment to purchasing 50 per cent of green power by 2014?

2. Why should South Australians believe this government when it says it is committed to action on climate change if, at the same time, it is breaking its own promises?

3. Does the government believe that the homeowners of South Australia and not the government should be doing the heavy lifting when it comes to transforming our energy sector and taking action on climate change?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (15:06): I thank the honourable member for his important questions, although I do take issue with the premise of his questions and will come to that in a moment. In 2008 the former premier announced that the South Australian government would become carbon neutral by 2020 by purchasing a combination of certified green energy and other carbon offsets. The carbon neutral government commitment was made at a time when there was an expectation that there would be a carbon price in the national economy.

The state government subsequently deferred its commitment to purchase green power, I am advised, in the 2013 Mid-Year Budget Review. Since then there have been significant changes in the national climate change policy with the repeal of the carbon pricing mechanism and the current review of the federal renewable energy target.

In recognition of the significant changes to national policy settings and the budgetary pressure on the state government, the Premier asked the Premier's Climate Change Council to lead a review of the climate change policies and programs. KPMG was contracted to work with the council to undertake that review. I am pleased to report that the review confirmed that South Australia has been a leader in climate change. The KPMG review indicated that future purchases of green power would not provide a good value for money approach to emissions reduction and that future climate change action should be designed to be eligible for funding under the commonwealth Emissions Reduction Fund.

The Department of Environment, Water and Natural Resources will review that carbon-neutral government initiative as part of the development of a new strategy for climate change action, taking into account the KPMG review and its recommendation, and we will come back with a decision about that in due course. For the honourable member to say that decisions have been taken already is not correct; we are reviewing the process in the light of new information and the changed climate (forgive the pun)—or the changed situation and the circumstances that we find arising out of changes to federal policy.