RENEWABLE ENERGY AND BIOFUELS

Page: 60

 Matter of Public Importance

Mr DAVID BARR (Manly) [4.41 p.m.]: Climate change is the single biggest issue facing us because it is literally about our survival on this planet. If we do not reverse global warming, we are condemning future generations to an increasingly inhospitable environment, bringing extinction to many species and placing a question mark on the long-term survival of the human species. Every other political and social issue that is dealt with in this place pales into insignificance compared with this issue. Indeed, I think the reality of it is only dawning on many people now. We need to move away from our traditional reliance on coal and oil as energy sources. These energy sources create carbon dioxide, which basically lets sunlight into the earth's atmosphere and then traps that light, thereby hitting the earth's atmosphere. In effect, carbon dioxide is acting like a greenhouse in the earth's atmosphere. Global warming has arrived; climate change is upon us.

The 10 hottest years ever recorded in Australia occurred in the last 12 years. Indeed, 2005 was the hottest year ever recorded in Australia. The Bureau of Meteorology reported that the nation's annual mean temperature for 2005 was 1.09 degrees above average. Leading conservation agencies are of the view that temperatures in Australia are set to rise by up to six degrees by 2070. Members of the public are becoming increasingly concerned about this, and they are seeing a lack of leadership across the board on this issue. A Lowy Institute poll released this month found that improving the global environment was the policy issue most Australians are concerned about_87 per cent of respondents considered improving the global environment to be very important. Two-thirds of the respondents supported the view that global warming is such a serious issue that we need to start taking action now, even if this involves significant costs. It is possible not to incur significant costs at this stage, but the longer we avoid trying to remedy the situation the higher the costs will be in terms of both dollars and cents and environmental degradation.

Currently only 8.5 per cent of the New South Wales electricity supply comes from renewable energy. That figure is down from 10 per cent in 1993. Of that 8.5 per cent, 7 per cent is hydro energy; it is from the Snowy Mountains Hydroelectric Scheme. The remaining 1.5 per cent comprises solar energy, wind power and bioenergy. Therefore, the renewable energy situation in New South Wales has barely progressed since the introduction of the Snowy Mountains Hydroelectric Scheme, despite there being abundant sunlight and plenty of opportunity for wind power and other measures. New South Wales has only aspirational targets for reducing greenhouse gas emissions. In 2005 the Government stated its objective to reduce greenhouse gas emissions to 2000 levels by 2025 and to 60 per cent by 2050. The problem we in Australia face is that we are being held hostage to the coal industry. We have an abundance of coal, we have hundreds of years of supply of black coal and even more brown coal, and it is a source of cheap energy. However, the cost of that cheap energy is environmental degradation, a contribution to the greenhouse effect, and increasing warming of the planet Earth. We cannot keep doing this simply because we have an abundance of a resource that can cause so much damage.

Australia and the United States did not sign the Kyoto protocol. The United States Government is basically run by a corporate oil mafia and, as I said, Australia is being held hostage to the coal industry. Both our societies had better get our acts together. The New South Wales Government's response to the needs has been positively anaemic, and the Federal Government has been in denial on the issue. This contrasts with what has been happening overseas. For example, California has a renewable energy target of 20 per cent by 2010; originally it was 2017. The Governor of California, Arnie Schwarzenegger, has taken a keen interest in this. The Terminator knows that without appropriate measures being taken our lifestyle will be terminated. This is in stark contrast to the occupant of the White House, Conan the Barbarian.

It is a depressing prospect that we face the world's most powerful country and it must be up to the separate States to institute changes. That is what is happening in Australia, but the New South Wales Government has not done enough. The Nature Conservation Council of New South Wales, the Total Environment Centre, Greenpeace, Climate Action Network Australia and the Australian Conservation Foundation have this week jointly issued a report asking the New South Wales Government to legislate for 25 per cent of electricity to come from renewable energy by 2020. I strongly support this proposal. It is something that can be achieved. We can start exploring various renewable options, such as solar energy and wind power. In New South Wales something like 0.01 per cent of energy is generated by wind power. By way of contrast, in Denmark 23 per cent of energy is generated by wind power. New South Wales has obvious advantages as far as solar energy is concerned, and we were at the forefront in developing solar technology but, sadly, that is being allowed to dwindle, it is not being explored, it is not being encouraged enough by governments, either at Federal or State level, and the technology is going overseas.

However, if the Government acts now on renewable energy it will become an important export industry for this State. As noted in a report to Renewable Energy Generators Australia Ltd, rising energy demands, together with rising greenhouse emissions, is leading to a strong global push for renewable energy. New South Wales needs to take advantage of this opportunity to benefit economically, or it will be too late. For example, both China and India have rapidly growing economies and abundant renewable energy sources, and the Chinese have set a renewable energy target of 10 per cent by 2020. According to the report just released by Australia's conservation agencies, to which I referred earlier, currently $3 billion worth of renewable energy projects are under development in New South Wales, and those projects could increase New South Wales' renewable energy supply to 14 per cent. However, without effective policy support these projects will be lost offshore or interstate.

Given the way we are dealing with the issue of renewable energy, we are facing an inconvenient, unpalatable and unconscionable truth: that we are not doing enough. We are failing badly. At the moment the State seems to be relying on the market forces, through the Greenhouse Gas Abatement Scheme, which the Government introduced in 2003 and is to be applauded. However, in itself the scheme is not enough. Statutory targets need to be set, and we need to be moving firmly down the road to looking at additional renewable energy sources. Measures that scream out include conversion from wood to ethanol, such as occurs in the mallee scrub in Western Australia, where the mallee is grown between crop fields; biogas sequestration; biogas from food treatment plants, breweries and so on; wind power; wave power—in respect of which a pilot project is taking place in the Illawarra region—and, most significantly but, sadly, most ignored, solar power.

In conclusion, there is one other issue on which we will be hit with a double whammy: running out of the world's oil. Unless we look for alternative and renewable sources our whole way of life is going to change dramatically. The impact of a reduction in the availability of oil, meaning a significant increase in the price of that product, will have a profound effect on the way we structure our cities and on the way we live. I do not see any sign of the Federal or State governments addressing that issue in any way whatsoever.

The Federal and State governments need to get serious and come up with a comprehensive national plan on renewable energy to deal with the depletion of oil throughout the world and on making sure that our environment is protected for future generations. I do not believe that means looking at nuclear power, which is a Faustian bargain in the sense that, as yet, no way has been satisfactorily demonstrated to deal with a highly toxic waste product that has a half-life of thousands of years. There are other alternatives, and this Government and the Federal Government should be exploring them.

Ms KRISTINA KENEALLY (Heffron) [4.50 p.m.]: I speak on the matter of public importance raised by the honourable member for Manly. There are almost 2,000 megawatts of renewable generation proposals pending for New South Wales. These proposals would see extra electricity generated through wind, solar, biomass and other zero-emission technologies. However, these and other renewable energy projects are being held up by the refusal of the Commonwealth to extend the national mandatory renewable energy target. The current national renewable target set by the Commonwealth Government is so low—a mere 2 per cent—that the targets have been easily met, with only a small amount of additional renewable energy generation, such as wind power, being created.

The renewable energy sector has been calling for some time for a higher national mandatory target. That would be the most efficient and sensible way to back the development of renewable energy industries right across Australia, including New South Wales. The Federal Government's strategy of announcing grant funding to the odd project here and there is not a substitute for the support that a national mandatory renewable energy target would give to this emerging industry. And it is not a substitute for a coherent and well-rounded strategy to address the greenhouse challenge facing Australia. In contrast, the Iemma Government has an excellent track record in taking action_not just words_to address greenhouse emissions.

The following are just some of the initiatives that place New South Wales at the forefront of Australia in actively reducing carbon emissions. New South Wales was the first jurisdiction to commit to reduce greenhouse gas emissions to 2000 levels by 2025, and to reduce emissions by 60 per cent by 2050. The New South Wales Government introduced GreenPower, a program to accredit renewable energy generation, which has since been adopted nationally. The New South Wales Greenhouse Gas Abatement Scheme [GGAS] was one of the first emissions trading schemes in the world when it was established four years ago, attracting worldwide interest, and we are working with other States to expand the scheme nationally.

The Government's $200 million Energy Savings Fund, aimed at projects that reduce energy consumption and emissions, is one of the first of its kind. Programs such as the Building Sustainability Index, known as BASIX, provide support for solar water heaters. These initiatives are achieving results. New South Wales GreenPower customer numbers increased by 87 per cent in 2005, which is higher than the national increase in GreenPower sales of 67 per cent. The latest independently audited accounts show New South Wales was the leading State in GreenPower sales and that we represent 37 per cent of national sales. We expect this trend to continue with even stronger growth in New South Wales in 2006 in both GreenPower sales and customer numbers.

However, the Government is not resting on its laurels. The Government will shortly introduce regulations to require all electricity retailers to offer an optional 10 per cent GreenPower component on all new residential, or moving, customers' accounts, and to provide standard labelling of greenhouse performance on electricity bills. Since the commencement of the Greenhouse Gas Abatement Scheme in 2003, more than 25 million tonnes of greenhouse gas have been reduced. During 2005 the total number of accredited projects under the scheme grew from 93 to 146. These projects created more than 10 million abatement certificates during 2005, equivalent to taking two million cars off the road for a year. The projects supported include gas-fired power stations; projects to improve efficiency at existing power stations; power stations using waste coal mine gas and methane from landfills and sewage treatment plants; projects to help customers improve their energy efficiency; planting forests to capture carbon; and industries converting from using coal to gas.

On 18 October the Minister for Energy introduced the Electricity Supply Amendment (Greenhouse Gas Abatement Scheme) Bill to extend the scheme to 2021 and beyond. I note that bill was passed by the upper House last night. The extension of GGAS means a total saving of 86 million tonnes of emissions in New South Wales. In the absence of Commonwealth leadership, New South Wales has stepped in to lead the development of a National Emissions Trading Scheme, which will deliver significant greenhouse savings for Australia. On 16 August the New South Wales Premier, other Premiers and Chief Ministers released a discussion paper called "Possible Design of a National Greenhouse Gas Emissions Trading Scheme". The discussion paper shows that a carefully designed emissions trading scheme can help Australia enhance its competitiveness by minimising the costs of reducing emissions. Emissions trading receives the support of leading business groups and companies, such as the Australian Business Roundtable on Climate Change, economists and conservation groups.

The invitation remains open for the Commonwealth Government to participate in the process. Under the $200 million Energy Savings Fund, more than $19 million was allocated to 28 projects, saving an estimated 1.4 million tonnes of greenhouse gas emissions over 10 years and 1.3 million megawatt-hours of electricity. Round 2 of the New South Wales Energy Savings Fund was launched on 8 September and is open until 1 November. The Government also has provided funding for renewable energy research and development projects, including the solar thermal power system at Liddell Power Station. This support has helped bring the technology to the commercialisation stage where it can take advantage of the global market.

As a result of the Government's initiatives, New South Wales emissions in 2004 were 1.2 per cent below 1990 levels, despite population increases; and since 1991, emissions per capita in New South Wales have fallen by 15 per cent. The Iemma Government continues to support the development of renewable energy and the reduction of greenhouse emissions. It is time the Commonwealth Government listened to the message that all sectors of the community are now united on: that greenhouse gas emissions need Federal action now.

The New South Wales Government has researched and prepared a New South Wales wind atlas as a resource for wind farm developers. The atlas plots the locations in New South Wales that have the best wind speeds in regard to strength and consistency. The wind atlas uses data and modelling from global-scale and continental-scale climate models, as well as fine-scale calculations for wind speed near large individual landscape features such as ranges and large plains. The New South Wales wind atlas models average annual wind speed across the State. The wind speeds are modelled at a height of 65 metres above the ground, which is close to the height of modern wind turbines.

The New South Wales Government has also published a "Wind Energy Handbook". The handbook provides a comprehensive kit of accurate and impartial information on all aspects of wind energy development in New South Wales. It has material for all participants in commercial wind energy development. The handbook aims to help participants and interested parties take an informed approach to wind energy projects and ensure the ongoing sustainability of the wind energy industry. However, I return to the point I made at the beginning of my contribution. These wind projects and other renewable energy projects are being held up by the refusal of the Commonwealth Government to extend the national mandatory renewable energy target. These targets are low and the Commonwealth needs to join with the Iemma Government, which has set an example, not just in words but also in actions, in developing renewable energy markets and schemes here in New South Wales.

Mr ACTING-SPEAKER (Mr Paul Lynch): Order! I will give the call to the honourable member for Tamworth. At the conclusion of his contribution I will call the honourable member for The Hills so both members will be able to speak prior to the reply of the honourable member for Manly.

Mr PETER DRAPER (Tamworth) [4.49 p.m.]: I thank my colleague the honourable member for Manly for raising this important issue in the House today. The production of biofuels and, in particular, the production of ethanol, is of great importance to the north-west of the State because great progress has been made to see construction of a new $100 million ethanol plant in Gunnedah, with the project expected to commence next year. As the honourable member for Manly pointed out, this is a timely debate with oil stocks declining and prices increasing.

As I have said in this place on other occasions, it has been a long roller-coaster ride for Currabubula farmer and engineer Matthew Kelly, who, as the managing director of Primary Energy Pty Limited, has devoted the past eight years to establishing Australia's first grain-fed dry milling ethanol plant. The project has enjoyed strong support from Gunnedah Shire Council and the Federal Government, which provided a grant of $1.1 million to enable Mr Kelly to get the project to construction phase by helping with detailed engineering design, legal costs, environmental impact assessments and planning fees. I am pleased that the State Government has agreed to convert its fleet to using ethanol blends and I am also pleased that the Federal Government has introduced incentives to help motorists convert their vehicles to LPG.

Gunnedah, as a small rural community, is set to enjoy enormous benefits from the development of an ethanol industry, which will produce one of the world's greenest fuels. In the first 12 months of operation the plant is predicted to inject $516 million into the regional economy and $1 billion over five years. It will provide employment for 50 permanent employees, 350 indirect jobs in transport and marketing, and 500 jobs in construction. One of the project's most positive spin-offs is that it will provide local farmers with a reliable market for their crops by utilising around 300,000 tonnes of grain per year. The plant will see the natural gas pipeline extend services into Gunnedah.

It will produce 120 million litres of fuel grade ethanol, which will be mixed at 10 per cent to produce E10 fuel. That is a major step forward towards reducing our reliance on fossil fuels and developing a sustainable industry. E10 fuel will deliver significant other benefits, including a reduction in vehicle gas emissions by up to 30 per cent as this renewable fuel produces less fossil carbon dioxide than conventional fuels. An added bonus is that every year the plant will produce about 90,000 tonnes of high-protein meal as a by-product of production that can be used for feedlots and other intensive livestock industries.

The project also has significant environmental benefits due to the processing technique, which replaces current technology that is highly energy intensive. The Gunnedah plant is planned to be environmentally positive as it creates more energy than it requires to grow the grain. As I mentioned previously, biofuel provides huge metropolitan area health benefits through lower tailpipe emissions. Also, air toxicity levels are lower than conventional fuels. If all of the ethanol proposed to be delivered from the Gunnedah plant is blended as E10, the resulting emission reduction from this one plant would equate to removing 65,000 cars from Sydney's roads every year or a reduction of 300,000 tonnes of carbon dioxide.

Production of ethanol from agricultural crops is renewable, unlike petroleum products from crude oil, which is a finite resource and is linked to the global marketplace. Increased ethanol production will extend and supplement our declining crude oil reserves. The Centre for Agricultural and Regional Economics has undertaken studies on regional impacts of ethanol production, and with ethanol from agricultural crops being renewable, the centre has performed several studies looking at the potential regional impacts of this production. Its findings indicate that where there is a ready availability of raw material or crops, communities can establish a plant and gain economic benefits, with potentially some 30 plants able to be established in regional areas of New South Wales.

The proponent of the Gunnedah proposal is in the process of preparing documentation for the State planners to scrutinise. It is extremely important that the Government supports this project, not only for the future of a regional community like Gunnedah, but also because of the positive impacts it will deliver to the entire State. The Government needs to lead the way in promoting ethanol as a viable, harmless alternative to traditional fuels. As I have pointed out previously, Gunnedah Shire Council has been extremely proactive. It has 38 vehicles including light trucks, cars, plant equipment and stationary engines, all operating on E10. The new fuel has been available in Gunnedah since last November and the council actively promotes its use.

Gunnedah Shire Council is making a positive attempt to encourage people to use ethanol blended fuels, and has worked hard to convince the New South Wales Shires Association to come on-side and encourage other councils to promote this as a viable alternative. Primary energy deserves ongoing support, and I call on the Government to assess this project as being of great significance. Renewable energy is the future. We are looking at hydro energy, solar, wind farms, biogas sequestration, utilising wave movements and tides. We are still very coal dependent and I fully support the proposal to move towards a target of 25 per cent renewable energy by 2020. Recently I was in Germany and its landscape is covered in wind turbines. We have opportunities to utilise that technology as well. To hear that only 2,000 megawatts has been organised is disgraceful. The blame game needs to finish. The Federal and State governments need to work together to give an ecologically and economically sound future.

Mr MICHAEL RICHARDSON (The Hills) [5.05 p.m.]: I am pleased to participate in this debate. There seems to be a lot of news not only about climate change but also about investment in renewables. We heard the Premier today answer a question from the honourable member for Bligh about renewable energy sources, and he talked about the projects pending or approved in this State. Indeed, the honourable member for Heffron also spoke about projects pending or approved. At the time I interjected, "pending or approved are the operative words," because these proposals—and that is all they are—are not going to get off the ground without some sort of investment by the Government. There needs to be real financial incentive from the Government to make these proposals economically viable. That is not happening. As Greenpeace and the Total Environment Centre noted in a report at the weekend since 2001, in the last five years only two new wind turbines have been introduced in New South Wales compared with 215 in South Australia. If that is not an indictment of this Government and its lack of commitment to investment in renewable energy and reducing greenhouse gas emissions, I do not know what is.

The honourable member for Heffron and the Premier spoke about the New South Wales greenhouse gas abatement scheme. This is not, by any measure, a good scheme. The University of New South Wales issued a report last year pointing out that something like 95 per cent of the projects that had been approved up to the point to which New South Wales greenhouse gas abatement certificates had been written were not additional projects but were pre-existing projects. This included projects such as the Tower and Appin coal waste gas plants down at Appin operated by BHP. They were completed well before the scheme was put in place and merely created a windfall profit for BHP.

Over the lifetime of the scheme it was estimated that only 30 per cent of the projects were additional projects; in other words, only 30 per cent would actually result in a reduction in greenhouse gas emissions. That is a disgrace and a lost opportunity. By contrast, as always the honourable member for Heffron—and we expect that on this side of the House—was critical of the Howard Government. Today under the Government's low emission technology development fund two massive new projects have been announced. One is for the country's most polluting power station, Hazelwood in Victoria, and the other is for the world's second biggest solar power plant, to be built in Mildura. That will be operational by 2015. It is significant that both these projects are in Victoria because Victoria is actively pursuing greenhouse gas reductions.

Victoria welcomes investment in renewable energy sources, particularly in the area of solar energy. Victoria has also set a renewable energy target of 10 per cent by 2012 but actually changed the target; it was going to be 10 per cent by 2010 but that was thought to be not achievable. Victoria changed the time frame but left the original target in place. It believes the target is eminently achievable. New South Wales must set targets and reduce our greenhouse gas emissions by 50 per cent to 60 per cent by 2050 just to stabilise the earth's atmosphere. I welcome the comments made by the honourable member for Tamworth relating to Gunnedah council's use of locally produced ethanol. It is a step in the right direction. It is only a small step, though, in comparison to what needs to be done with power generation in this State.

Figures released on Sunday show that 89 per cent of electricity in this State is produced by burning coal. Clearly, there needs to be a huge investment not only in replacing some of that coal with lower emission intensity technologies but also in low-emission technologies themselves, such as the integrated classification combined cycle. If we do not do that we face the possibility of catastrophic climate change by the end of this century and the destruction of many of the world's species. It is possible that mankind can do something about that. Mankind can change the future. We can change it for the worse or for the better. I sincerely hope that everybody in this House wants to change it for the better.

Mr DAVID BARR (Manly) [5.10 p.m.], in reply: I would like to have heard the honourable member for The Hills clearly and unambiguously put the Opposition's position on mandatory renewable energy targets, but we did not hear that. We certainly have not heard the Government's position, and it is time we did. New South Wales and Victoria have the most greenhouse intensive electricity supplies in the world. Only one country has a higher level than these two States, and that is a republic in Central Asia—it might be Kazakhstan but I am not sure. If this State did not have such an abundance of coal no doubt this debate would not have taken this format, because we would be moving more strongly down the lines of renewable energy. We must be weaned off coal, which is a source of cheap energy and electricity. New South Wales has the cheapest electricity rates in the country and one of the cheapest rates in the world. It may seem like a blessing to have such an abundance of an energy source. However, it is also a curse because it makes us lazy in the sense that it is easy to use and there are megabucks to be made from digging it up, exporting it and using it for coal-fired power stations, et cetera. But the cost is calamitous in the longer term; it is ruining our environment.

We cannot keep going down this route. We must wean ourselves off coal. The proposal to move to a target for 2020 would still mean there is significant coal use. It is not saying that coal can be done away with altogether, because at this stage it cannot. There is no single answer. We must explore various options but we are not doing so. We are not doing nearly enough. The honourable member for Heffron talked about pending projects and some worthwhile initiatives, but they are still small scale. It is not big time. The crisis is upon us now. We are in a permanent state of drought. We have severe problems with water shortages and water quality, we will have severe problems with oil and the price of oil going up, and we have severe problems with emissions. And the people are leading the politicians in this debate. Members of the public are showing the lead in terms of wanting more to be done, but not enough is being done. The Federal Government has been in a state of denial. It is probably only the change in the Murdoch press overseas and the debate that has hotted up here—excuse the pun—that forced the Federal Government to start looking at the issue more seriously.

The State Government has been relying on the market, hoping that in future things will improve. It needs to do much more. It needs to be much more proactive. We need statutory regimes in place to ensure that future generations are better off or no worse off than they are now. Recently my son said to me, "Dad, your generation has had it best. It'll be a lot worse for our generation." That is the legacy we are leaving for the next generation. We are incredibly affluent. We have plasma televisions sets, airconditioning, fancy cars and so on, but all of that comes at a cost. And the cost is the use of the earth's scarce resources. We have been inconsiderate in using those scarce resources and allowing coal-fired power stations to belch out emissions. We have ignored the dire warnings about climate change that have been given over the years. We are only just waking up now. Future generations will condemn us for being lazy and not being proactive in working to improve emissions to ensure that there is a decent planet for the next generation and the generation after that. At present species after species faces extinction; the planet is warming up, and it will keep doing so because of a time lag. Things are looking pretty grim. As I said at the start, there is nothing more important facing us than this issue. It is a planetary issue and we are not addressing it properly. It is time we did.

Discussion concluded.