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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2017-02-15 Daily Xml
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Emissions Reduction Targets

The Hon. G.E. GAGO (15:01): I respectfully ask a question of the Minister for Climate Change. What technologies are available to help limit emissions from the Australian energy sector to help achieve Australian government 2030 emissions reduction targets and its commitment under the Paris agreement to limit global warming to 2º Celsius or less?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (15:01): I thank the Hon. Gail Gago again for another incredibly important question in this place. According to independent commonwealth agency the Climate Change Authority, approximately one-third of Australia's emissions come from the electricity generation sector. This means that if the Turnbull government is going to have any chance whatsoever of meeting its 2020 emissions targets and its 2030 emissions targets or even its commitment to the Paris climate summit in 2015 to limit global warming to 2º Celsius or less, it will have to do something to reduce emissions in the energy sector.

There is another important imperative that requires national focus on energy policy and that is Australia's coal generation fleet, which is ageing and needs replacing. After Victoria's Hazelwood power station retires later this year, I am advised that Australia will have 25 gigawatts of coal-fired generation, none of which will be in South Australia. Two-thirds of that is already more than 30 years old in terms of plant, and by 2025, there will only be four gigawatts of coal generation that is less than 30 years old in terms of plant.

This old coal generation is inefficient both in terms of fuel costs and the carbon emissions and other pollutants it produces. Of course the sensible solution, one that will provide the certainty that investors and businesses are calling for, is to enact an emissions intensity scheme. Modelling has shown that this will help reduce power prices whilst also helping address the challenges our electricity sector is currently facing in helping them transition from old, dirty coal-fired power to new renewable clean power.

Of course, as I said, that modelling and that advice is coming from experts in the sector and we know from yesterday that the Liberals don't listen to the experts. We know from yesterday that, from the Prime Minister down, the Liberal Party doesn't much like informed scientific or expert advice. The solution that the Liberal Party has proffered up is so-called clean coal. You take ordinary coal, put a label on it and say it is clean and, apparently, you can magically tackle both climate change and energy security. Why would we let the facts get in the way of good spin? It was great spin that they put on in parliament: 'Clean coal. Here's a lump of it. It's clean coal.'

The fact is that clean coal isn't clean and it isn't even real. Clean coal does nothing for emissions. As Mr Dylan McConnell from the Climate and Energy College at the University of Melbourne has pointed out, Prime Minister Malcolm Turnbull and his colleagues used old research from 2010 to justify their claims. This harks back to tactics used not only today by the Hon. Mr Lucas, but yesterday by the Hon. Mr Ridgway, going back to 2003, dredging back to old information, the flimsiest of excuses to try and bulwark their flimsy policy position, their ideological policy position.

The Hon. D.W. Ridgway: Yours is working really well. Look at the investment leaving this state.

The PRESIDENT: Order!

The Hon. I.K. HUNTER: It was a lot like the Hon. David Ridgway yesterday, as I said. The updated research which the Prime Minister should have been referring to and which Mr McConnell pointed out last Friday, I am advised, on 10 February, from the CO2CRC indicates that emissions from clean coal will be around the current average emissions intensity of the electricity sector.

This so-called 'clean coal' is no better than the average emissions intensity of the market, and insignificantly better than regular coal. It defies belief that we are even talking about building one (a new coal plant) in 2017.

That is referenced to Mr Dylan McConnell in Renew Economy,10 February 2017. It also makes it absolutely impossible, according to Mr McConnell, for the Turnbull government to meet its 2030 emissions reduction targets. Then there is the price tag associated with it. According to Bloomberg New Energy Finance, the cost of energy from a new coal power plant would be anything between $134 and $203 per megawatt hour. That is in contrast to wind at $61 to $118, solar at $78 to $118, and a new efficient gas plant ranging from $74 to $90.

Bloomberg also points out that clean coal would result in 'substantially higher' electricity prices. Even the electricity generators have ruled out building coal-fired power stations. As I quoted yesterday in this place from an AGL spokesperson in the Financial Review, on 1 February 2017:

…we won't build any clean coal power stations.

A further quote from an Energy Australia spokesperson in the Financial Review on the same date:

While existing coal is cheaper than other forms of generation, investors and financiers view it as a legacy technology, one which will be replaced—the only question is when.

Further, Mr Matthew Warren, who I have quoted before, the Chief Executive of the Australian Energy Council, from 2 February 2017:

…in practice there is no current investment appetite to develop new coal-fired power in Australia. The industry's investment focus has shifted to a combination of firm lower emissions gas generation, renewables and enabling technologies like storage.

The fact is, there is no future for coal. Also:

In the grid of the not too distant future coal's baseload operation becomes a curse, not a blessing…The fundamental control paradigm of grids is changing from baseload-and-peak to forecast-and-balance. The balancing component will require more flexible or firming capacity, not baseload. Gas-fired generation is much better suited to providing flexibility to the system than coal, and could provide this at a much lower cost.

That is a quote from Mr Leonard Quong, Senior Associate at Bloomberg New Energy Finance. But perhaps the most entertaining summary of the Liberals' plans in this regard is from a respected financial commentator Mr Alan Kohler, who wrote in The Australian, on 13 February, about 'The great coal hoax'.

Coal is by far the most expensive fuel for generating electricity, full stop—if the cost of dealing with climate change is also taken into account.

He says, variously in his article:

At about the same time as Scott Morrison was waving his ridiculous piece of coal about last week, the result of India's first major solar auction for 2017 was announced with record low prices. It is part of India's national electricity plan, released in December, which calls for a fivefold increase in renewable energy, and a reduction in thermal power from 66 to 43 per cent of total capacity.

The coalition, meanwhile, is clinging to the idea that we need to build more coal mines in Australia to supply India's supposed voracious appetite for thermal power.

As one of the sunniest places on earth, Australia should be a world leader in solar, bidding to supply India with the latest renewable technology. Instead our politicians have been locked in a battle over a delusion for nearly a decade: that coal is cheap and renewable energy is expensive.

That is Mr Alan Kohler in The Australian on 13 February. He goes on to say:

Instead of helping the states to deal with this problem sensibly, Coalition politicians, including the federal minister for energy Josh Frydenberg, are just trying to score points and embed the hoax.

Those crises have now arrived in the form of blackouts, and they are not caused by too much renewable energy.

He says:

As the BCA [the Business Council of Australia] makes clear, it's due to a lack of investment, in turn due to a lack of policy certainty and clarity.

He goes on to say, and this is where I have to agree with him most wholeheartedly:

This is entirely the Liberal Party's fault—not just Malcolm Turnbull's, although he is a rather pathetic figure now. If he didn't go along with the hoax, he'd be sacked and another PM would.

By taking the low road in 2009—

The Hon. J.S.L. DAWKINS: Point of order, sir.

The PRESIDENT: Point of order, the Hon. Mr Dawkins.

The Hon. J.S.L. DAWKINS: For the second day running, we have had the minister doing an eight-minute answer to a Dorothy Dixer from the Hon. Gail Gago, and I think that is an abuse of question time. I ask you, Mr President, to draw his answer to a conclusion.

The PRESIDENT: Minister, can you get to the conclusion of your answer.

The Hon. I.K. HUNTER: Well, it is just like the point of order yesterday that was raised by the Hon. Mr Dawkins. Had he not made it, I would have been finished by now, Mr President.

The Hon. J.S.L. Dawkins: You went on for some time, you went on for two minutes.

The PRESIDENT: Order! Let the minister finish his answer.

The Hon. I.K. HUNTER: Let me go on:

This is entirely the Liberal Party's fault—not just Malcolm Turnbull's, although he is a rather pathetic figure now. If he didn't go along with the hoax, he'd be sacked and another PM would.

By taking the low road in 2009 instead of the high road, and deciding to mislead Australians about the true cost of energy, the Liberal Party condemned the country to a decade of confusion and stasis on energy policy.

That reached a nadir of absurdity last week with the Treasurer's coal stunt.

The rest of Australia's leaders, in particular the CEOs of our largest companies, should declare now that enough is enough, and pull these idiots into line.

That was Mr Alan Kohler in The Australian, condemning the Liberal Party right across this country for their lack of policy and leadership. It is no wonder, when you see people like the Hon. Mr Steven Marshall, member for Dunstan and Leader of the Opposition—

The Hon. J.S.L. DAWKINS: Point of order, sir: this is an abuse of question time and I ask you to ask the minister to finish.

The PRESIDENT: I think I asked the minister to come to a conclusion at the last point of order. Minister, can you get to the finality of your answer.

The Hon. I.K. HUNTER: Absolutely, Mr President, absolutely I can.

The Hon. D.W. Ridgway: Well sit down, sit down and shut up.

The Hon. I.K. HUNTER: Well, in a moment, if you give me the time to finish. It is no coincidence that you see an abject abdication of leadership here by the Liberals in South Australia. Why did Senator Cory Bernardi leave the Liberal Party? It is because they have no chance of actually leading this state, just as at the moment we are seeing absolutely no leadership, from the Prime Minister down, in the Liberal-National coalition. They have no policy on energy, and it is little wonder then that all of the states have to backfill that vacuum.

Members interjecting:

The PRESIDENT: Order!

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