Adjournment Debate – Energy

Wednesday, 17 October 2018

Mr PITT : I’m pleased to follow the member for Whitlam, because, once again, we can actually define the difference between idealism and realism. On the call for 100-kilowatt solar panels, whilst it sounds like a fantastic idea, the reality is pretty straightforward. For the people who are listening to this broadcast, I think the reality is this: if the entire country ran on solar panels, then it would be available to power electricity only during the day on days when it is sunny, on days when there is no cloud, on days when there is no storm, on days when there is no monsoon. The proposal from those opposite is that for the times when people in this country might want to use energy, when there aren’t those types of weather conditions, is nothing. Their proposal is to have no power at that time.

This is a job for engineers. It is not a job for politicians to determine how we should design what is an incredibly complicated network—not only with transmission, not only with generation, but in terms of system strength and in terms of protection of incredibly expensive assets. One of the ways to do this is to implement ACCC recommendation No. 4 on driving down electricity prices. The reason I’m such a strong supporter of this is that it puts all of the ideology to bed. It does not matter which fuel source you support and it does not matter whether you think we should run the country on solar panels or wind. It will be a hard commercial decision. But the only way it will be a hard commercial decision is if we set the standards correctly, because you cannot compare a wind turbine or a solar panel, which are intermittent, with a gas turbine or a steam turbine or with traditional hydro. They are not the same. Reliability 24/7—it is completely different to something that is not firmed, that is intermittent and relies on the weather. The people of Australia should not have to look out the window to work out whether they can turn on their stove at night.

This is an incredibly technical argument. The reality is that, if we go to the market with a true contract condition, not one based on ideology but based simply on price and reliability and a reduction in emissions, we will get a true result and we will finally put to bed all of the arguments about what is cheaper, what is more reliable and what actually works. I’m a strong supporter of that. We must set a reliability standard by which all fuels will be considered equally. This is the most appropriate and common-sense way to deal with this issue.

While we’re at it, we need to drive down prices. Approximately 50 per cent of the price of electricity is based on the cost of transmission lines and the write-down cost, particularly for state owned assets. Some $50 billion worth of transmission and distribution assets are owned by governments in this country. The rates of return for them are incredibly high, particularly given the fact that money is easily available at the moment and it is much cheaper than the rates of return that they are getting.

We should also implement the general offer for a tariff for domestic use and, in my view, there also should be one for a food and fibre tariff across the country in order to help our ag producers, who, with the current price of electricity, simply cannot compete. I have growers in my region who are spending $100,000 on electricity, only to find that their crop is now worth less than what they spent to irrigate it. Anyone who is in business knows that is unsustainable. We should fix that up and provide a proper tariff.

We should also eliminate late-payment structures—retailers are out there making an enormous amount of money from charging late-payment fees—particularly for those who continue to get a hard-copy bill. It might arrive after the due date. There is no possible way for you to pay that if you’re not aware of it. It’s just simply another way that retailers, in particular, are milking money out of the electricity system.

In terms of reliability: in my professional view as an electrical engineer, we have no choice but to extend the life of our existing generation. We cannot construct not only base-load power but all of the different types of considerations and combinations in a short period of time. We need this nation to have a reliable energy supply. We should leave it to the people who actually design these networks and who spend decades building their experience. We should get away from the ideological fight, and we should go back to hard, contractual facts with a set standard. Then we can forget all the arguments about what is cheaper and what is not, because it will be set and fixed by the market.

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