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Australia's energy future

Parliament House Canberra

29 October 2020

Thank you Mr Speaker.

Today I rise to address the house on the Australian Government’s comprehensive plan to drive down energy prices for all Australians as we reduce emissions.

On this side of the House Mr Speaker, we understand that it is access to low-cost energy that underpins the economic security of all Australians.
 
Because our energy sector is not only a critical export for Australia but also underpins our domestic competitiveness. 

Competitiveness in areas like manufacturing that supports 850,000 jobs in Australia.

For every petajoule of energy that we consume domestically we generate $304 million in GDP.

Energy should be plentiful; it should be reliable, and most of all it should be affordable.

It is the foundation upon which this great country has been built.

Affordable, reliable energy provides employment and opportunity across all sectors and regions – for tradies, farmers, hospitality workers, manufacturing workers amongst others.

And as we make our way out of the crisis, access to affordable, reliable energy will fuel our industries, create jobs and relieve the financial pressure on families.

We have a comprehensive plan for recovery, reform and resilience.

A plan that will give rise to the next chapter in our national story.

A plan that focusses on technology not taxes.

A plan that enables choice for consumers.

A plan that only a Liberal National Government is capable of delivering.

Australia was, is, and always will be an energy superpower.  It is who we are and what we do. We are blessed with abundant natural resources.

Coal – derided by those opposite – has provided generations of Australian workers with a good income and a comfortable home. 

To this day, it is the lifeblood of towns throughout rural and regional Australia. It has powered our industries and given rise to others overseas, lifting millions of men, women and children out of absolute poverty.

We are one of the largest exporters of gas in the world, and an important and trusted supplier of uranium. The royalties and taxes they have provided have built our school and roads, trained our doctors and nurses, and helped protect our borders.

We are opening up new opportunities such as hydrogen, and cementing Australia’s position as a world leader in renewables.

We are seeing record investment in renewables, with an incredible 6.3 gigawatts of renewables capacity delivered in 2019 – a number that looks set to be repeated this year.

$30 billion has been invested in the sector since 2017. According to the Clean Energy Regulator, Australia is investing roughly 10 times the average of industrial countries and four or five times the next highest level of investment.

That is an extraordinary outcome Mr Speaker.

Those opposite talk Australia down. Arguing that investment has fallen is ill-informed and misleading. They seek to talk down Australia’s achievement and the strength of the renewable sector for political purposes.

As the CER itself has stated:

This story of the collapse has been around for a couple of years... But in our view, it is not true.

While the Government is getting on with implementing our energy plan, the Leader of the Opposition peddles falsehoods.

We're delivering a record level of investment in wind and solar, which is creating benefits as well as challenges. We must back it up, that’s why we are building the largest pumped hydro project in the southern hemisphere.

It was this Government that commissioned Snowy 2.

It is this Government that established a $1 billion Grid Reliability Fund.

And it is this Government that is fast tracking every major priority transmission project in AEMO’s integrated system plan.

We must have a realistic policy framework that enables us to deliver the energy that Australians want.

And Mr Speaker I am pleased to say that this side of the house has a clear and consistent energy plan.

A plan that we have been implementing and a plan that has been working.

Electricity

I am happy to report that prices have been coming down for some time.

The most recent CPI energy figures show more reductions in energy. We have now had seven straight quarters of CPI electricity price reductions compared to the corresponding quarter of the previous year.

We have now had 13 straight months of wholesale electricity price reductions and I am confident we will have had 14 straight when this month ends. Prices that have fallen by up to 48% over that time across the NEM.

Prices are now at levels not seen since 2014.

It's no coincidence that those 13 months follow the Government’s introduction of the big stick legislation.

Legislation that has brought important accountability into the energy market, a market that continues to be dominated by a small number of players.

The reforms we have delivered – like abolishing the loyalty tax through our default market offer and taking action on sneaky late payment fees – are delivering real savings for consumers.

But reform to the market is not the only thing that this Government has achieved.

It was this Government that had the courage to put the consumer first.

It is this Government that doesn’t shy away from the hard decisions that will protect Australians

Nowhere is this better seen than in our response to the Liddell taskforce.

The modelling through that taskforce was clear. If Liddell isn't replaced with dispatchable capacity, then prices rise.

We have seen it with the closure of Northern in South Australia and we have seen it with Hazelwood in Victoria and it is the consumer who ultimately loses and the vested interests that win.

We as a Government will not let that happen. We will not let the price rise to over $80 MW/h when Liddell closes and continue to rise to over $100 MW/h by 2030.

That would be a sledgehammer to industry and growth not seen since the carbon tax.

The Government considered this problem in detail and we have taken a principled approach.

Ultimately this is the private sector’s responsibility, and we will only step up, if the private sector steps back.

We did the work, we set the clear target for the private sector and if they step up, we will step back.

I welcome the strong support from the local members on our plan – including from those opposite.

We, as a Government, understand the gaps in the energy market and we have addressed them.

Transmission projects are complex and difficult to get started, however many projects have a strong business case.

That is why we have invested over $300m in early works for interconnection and over $117 m in Microgrids. We have already invested in 18 microgrid projects across 70 regional communities and we will invest in many more through a refunded ARENA.

We are progressing every remaining priority project in the ISP. We are working closely with the Governments of Tasmania, South Australia, Victoria and New South Wales, and we know that if the business case is strong, private sector investment will be forthcoming.

Our funding will bring forward key projects like Marinus Link in Tasmania, VNI West in Victoria, PEC in South Australia and CopperString in Queensland.

This builds on QNI and Humelink in New South Wales.

These projects form the backbone of our electricity market.

We have created a plan that is integrated and will protect all Australians from the kind of shocks to the electricity system that Labor Governments in South Australia and Victoria oversaw.

Emission Reductions

It is this Government that smashed our 2020 Kyoto Target.

It is this Government that has outlined how we will meet and beat Paris and it is only this side of the house that is compliant with Australia’s international obligations.

Let me be clear Mr Speaker, the Paris Agreement requires a Nationally Determined Contribution - which is a 2030 target.

When those opposition can only commit to a target three decades from now, what they are saying is this:

It's all too hard. It's too hard to cost their policies, it's too hard to outline what technologies will get them there and it's too hard to balance the views of the Member for Hindmarsh with the rest of the Labor Party.

What they also won’t tell you is that to meet their 2050 target they will need around a 43% target by 2030.

Labor is all at sea on emissions.

It is this Government that is taking the Paris Agreement seriously and being transparent.

The last budget built on our strong track record, with another $1.9 billion in investment in clean technology.

With a refunded ARENA.

With a technology investment roadmap that will guide $70 billion in investment in the technologies that we must develop to reduce our emissions.

It’s a budget that invests in the technologies we need. Hydrogen, CCS, green steel and aluminium, storage and soil carbon.

The Government’s plan has three key focuses – lower emissions, lower costs and more jobs

Getting the technologies of the future right in Australia will support 130,000 jobs by 2030, and avoid in the order of 250 million tonnes of emissions by 2040.

If these technologies achieve widespread deployment globally, they will significantly reduce emissions from energy, transport, agriculture and heavy industry. These sectors account for 90 per cent of global emissions and emit 45 billion tonnes each year.

Australia should be proud of our achievements. We should be proud of the fact that we are a world leader in energy, including renewables.

We should be proud of the fact that we are one of a very small group of nations that have met all their international achievements.

And we will achieve this while supporting our key domestic sectors, like mining, agriculture and manufacturing.

Gas

The Government backs the gas industry, backs Australians who use gas and it backs the 850,000 Australians who rely on gas for a job. The manufacturing sector alone relies on gas for over 40 per cent of its energy needs.

Gas is a critical enabler of Australia’s economy. It supports our manufacturing sector, is an essential input in the production of plastics for PPE and fertiliser for food production. 

In 2019, we overtook Qatar to be the largest LNG exporter in the world, with an export value of $49 billion.

Our LNG sector directly employs over 28,000 people, approximately half of whom are located in regional areas and support jobs such as drillers, machinery operators, truck drivers and surveyors to name a few.

Gas also provides the firmed generation that we need to balance the record levels of increased supply from solar and wind.

However, we know more needs to be done to secure our future gas market. AEMO have identified that more investment is needed to avoid the risk of shortfall in the southern states by 2024.

We have already taken steps to address this. It is this Government that has secured supply through the Australian Domestic Gas Security Mechanism.

It is this Government that introduced the Day Ahead Auction scheme that has unlocked spare capacity in our pipeline market.

We have seen real price reductions on the back of these reforms. Even before COVID-19, there were reductions in the domestic spot price across Eastern Australia.

These prices have fallen by 54 per cent in second quarter of 2020, compared to the same time last year which follows significant reductions before COVID. The AER has also found that spot gas prices were at their lowest levels in four years.

Our 13-point plan in the budget focuses on 3 key action areas: unlocking supply, efficient transportation, and empowering consumers.

This Government will secure a future gas market that is attractive for gas development and investment. This will allow us to remain one of the top LNG exporters.

We will ensure that long-term domestic gas contract prices are internationally competitive to support our manufacturing and industrial sector.

We will ensure that there is sufficient new gas generation to maintain a reliable grid.

We have proven through the Snowy project at Kurri Kurri that the Morrison Government doesn’t bluff.

Our National Gas Infrastructure Plan will identify the major priorities for investment. If we don’t see the investment that we need to keep our gas market strong then we will act.

This could include underwriting projects, streamlining regulation, or the establishment of a special purpose vehicle with a capped Government contribution.

We will deliver a transparent and competitive gas trading system through improving our most strategically located and connected gas trading hub – Wallumbilla – as the Australian Gas Hub.

We will build on the 70 PJ of extra gas secured as part of the NSW Energy Deal through deals with the Northern Territory, Victoria, South Australia and Queensland. These deals when combined with the Minister for Resources, Water and Northern Australia’s five strategic basic plans, will provide the supply we need.

Earlier this month I was in the Northern Territory to discuss an energy deal and to visit the Beetaloo basin.

A development that this Government has backed and one we will work closely with the Territory Government to make happen.

I can update the house that we are also well progressed on a deal with South Australia and we have made strong progress on joint projects with Tasmania, Victoria and Western Australia.

Fuel Security

The third pillar of our comprehensive JobMaker energy plan is focused on boosting Australia’s long-term fuel security.

A plan that acknowledges that the future will be different, from the past.

One that realises the economic benefits of having a domestic capability moving forward.

A capability that other fuel-dependent industries, such as our farmers, truckers, miners and tradies rely on.

It will enhance Australia’s national security and protect Australian motorists from higher prices.

Our plan has three key elements: 

  1. 1. Investing $200 million to build new diesel storage 
  2. 2. Creating a minimum onshore stockholding obligation to safeguard key transport fuels,
  3. 3. Backing our local refining sector through a production payment in recognition of the fuel security benefits that refineries provide Australia.

The events of 2020 have reminded us that we cannot be complacent. 

The Government cannot predict international market forces but through our fuel security package we will create 1000 new jobs and build the sector of the future.

Conclusion

Mr Speaker.

This Government has delivered a comprehensive plan that will deliver lower prices and it will deliver the jobs that Australians want. It’s a plan that will help us grow in a COVID recovery.

It's a plan that will deliver the projects and investment that Australia needs.

Only this Government can be trusted to deliver the clear, responsible plan that will keep prices low for all Australians.