Bill's Speeches

SPEECH - GETTING ON WITH ENERGY POLICY - SYDNEY - TUESDAY, 18 JULY 2017

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I’d like to start by acknowledging the traditional owners of this land, I pay my respects to elders both past and present.

It’s common for politicians to come to events such as this and talk-up the positives of renewable energy. But you all know this.

You know our natural advantages – the sunniest continent in the world, one of the windiest places in the world.

You know the capacities of our universities, research centres and private firms who have built on those advantages, driving improvements in generation, efficiency and storage.

I also hope, by now, you know where the Labor Party stands.

My party and I don’t see renewable energy as ‘experimental’ or unproven.

I am reasonably confident that at our state conferences we won't have resolutions to leave the Paris Accord.

For us, renewable energy is front and centre: both economically and environmentally.

It's not in the distant future for us. It's not one day when we run out of other options - it's now.

Renewable energy is the cheapest form of new electricity generation.

And if some of the other members of parliament in Canberra need proof of this, they perhaps need to only walk down any residential street in Australia.

Almost 1 in 4 residential households now have solar panels for their homes. 

Put another way, the Australian people aren’t waiting for politicians to tell them renewables are the way to go – they're ahead of us, they’re voting with their feet.

The marginal cost of operating a solar panel or wind turbine is close to zero.

The fixed capital costs of solar and wind continue to fall.

There are big strides being made in all of the clean energy technologies – biofuels, geothermal, hydro and more.

Now, it’s true many people still associate baseload power – traditionally provided by fossil fuel generation – with reliability.

And while gas and coal will continue to be an important part of our energy mix for the foreseeable future, the economics are shifting and diversifying.

As distribution becomes more de-centralised and consumers continue the march to take control of their energy use, we will need more flexible forms of power.

Doing very little actually does nothing to enhance the future of coal.

It is just one of the reasons why the private sector is not seriously talking about investing in new coal-fired power plants – because they wouldn’t have the flexibility to work alongside the demands of the future. They’re too costly to ramp up and down.

It's why renewables plus storage will become even more valuable.

Storage is the future of reliability - whether it’s batteries or pumped hydro.

It is an interesting development in the debate about clean energy that storage will, in fact, become the conservative option.

Developments in battery technology will help power everything from the family home to commercial industry and they will guarantee renewable energy is the most reliable option, even when the sun isn’t shining and the wind isn’t blowing.

Again, the Australian people are voting with their feet.

In 2015, there were 500 battery installations in Australia. This year, we’re expected to exceed 20,000 installations.

But for all the success we’ve seen – the development, the breakthroughs yet to come, there is one area where Australia is not making progress.

The politics of renewable energy.

I’m reminded of something Malcolm Turnbull said in 2010:

We have every resource available to us to meet the challenge of climate change except for one: leadership.

He was right then. He still right, now.

This failure of leadership means we are just passing the problem onto future generations, to our children and their children.

  • More droughts

  • More bushfires

  • More extreme weather

  • More hardship for farmers

  • More property damage.

  • More insurance cost. 

And every Australian is living the consequence of a lack of leadership, right now.

Under the current Liberal administration, wholesale electricity prices have doubled. That’s the cost of policy uncertainty.

No carbon tax to blame. It's the price of gridlock and inaction –  and it is stapled to every Australian family’s electricity bill.

Two weeks ago, electricity retailers here in New South Wales put their prices up by as much as 19 per cent. 

That is a massive impost. It’s a disaster for family budgets, particularly for low and middle income earners.

People are angry – and they have every right to be. 

Especially because every time our current Prime Minister puts his head on television to say the problem is fixed – prices go up again.

We have a government with the means to be able to do something, just not sufficient will.

So let me be clear to Australians who are paying too much for power: every day the Government refuses to take action, you are paying higher prices than you should be.

Until this policy uncertainty ends, prices will just keep marching up, and up and up.

It’s time for the parliament to put a price on pollution.

Everybody knows this is inevitable – your sector, business, unions, investors, not to mention the Government’s own expert advisers and regulators.

Everyone knows this is inevitable, yet nothing has happened.

And as we continue to delay, we are risking investment after the Renewable Energy Target winds down in 2020, despite the good economics of renewable energy.

Our country cannot afford another political cycle lost to brawling and name-calling.

  • Between governments and opposition.

  • Between Canberra and the States.

  • And – of course - it's within the government itself – for whom, I am afraid, renewable energy is now a convenient proxy for leadership destabilisation. 

Australians are well and truly over this rubbish state of affairs.

The message I get – everywhere I go – from families and business-owners, from people in the regions, suburbs and our big cities is straightforward.

Just get on with it.

That’s the polite version, anyway.

I can tell you, getting on with it, is my priority, it’s Labor’s priority.

  • Getting on with providing certainty for new jobs and new investment.

  • Getting on with modernising Australia’s electricity grid – investing in new infrastructure like the interconnectors, pipelines and storage we need – and updating the energy market rules to put consumers back in control.

  • And getting on with the decisions which will set us up for a future of cleaner, cheaper and more reliable power. 

The prize in getting renewable energy policy right is profound.

Lower prices -  ensuring the National Energy Market operates in the interests of households and not just electricity companies who are trying to sweat their assets and protect their investments.

The prize is profound in terms of more jobs - building industries around de-centralised renewables. Providing long-term secure jobs for the tradies, manufacturing workers, engineers and technicians whose skills will drive the transition of the market.

And the reward is profound in terms of the future of our environment -  fulfilling our contract with future generations by driving our transition in our energy sources that every credible scientist tells us is essential, fundamental and irreplaceable for real action on climate change.

Let's be straight - these are tough issues, no doubt. They have bedevilled a decade of policy making.

But when you look at what’s at stake, failure is not an option, is it?

Denial, delay - it doesn't really pass muster. .

We need to find a way through the politics.

It's why today, I’m not here with a shopping list of new announcements, or indeed, the promise that Labor will undo everything that’s been done in the past four years.

One of the things that drives people to distraction is when the only priority of a new prime minister is ripping-down and tearing-down everything the previous government did - even if it’s a prime minister from your own side.

Tony Abbott has shown us where that road leads.

He demolished a comprehensive set of energy and climate policies – and replaced them with nothing - a void.

And worse than the absence of policy – he created a political environment where merely saying the words ‘climate change’ or ‘renewable energy’ subjected the people saying it to allegations of ‘political correctness’ and the very worst kind of ignorant, shouting scare campaigns.

  • The $100 lamb roast.

  • The Whyalla Wipe-Out.

  • Windfarms causing an epidemic of illness across the land. 

And, of course, there was last week’s characteristically nuanced contribution from the Liberal head of the Government’s Environment and Energy Committee, arguing that people would be dying this winter because of renewable energy. He didn't say anything about cutting the payments to pensioners for energy cost.

This kind of fact-free scaremongering has proven to be brutally effective, and I don't think the Government has finished with it yet.

But after the Liberal landslide in 2013, plenty of commentators advised me, and Labor to cut and run from the climate debate.

I am proud to say that we actually stuck to our values following that defeat. From my first day as Leader, I and my party have stood for real action on climate change.

We've pushed the national debate, we've led it.

We stuck to our guns by setting strong goals for cutting pollution, for providing certainty to invest in renewable energy.

  • 50 per cent renewable energy by 2030.

  • Zero net pollution by 2050. 

We are going to lead again, be it from opposition – by bringing the climate change wars to an end.

We want to draw a line under the most toxic and poisonous of the politics of the past decade.

We just want to get on with it, providing certainty for business, industry and families.

That’s why, even before the Chief Scientist completed his review, I wrote personally to the Prime Minister promising that we would work constructively with the Government on a way forward.

You may be aware, our preferred policy position was to deliver an Emissions Intensity Scheme.

We have always argued that a price signal for pollution is the best and most efficient way to cut emissions and put downward pressure on prices.

And I think electricity is a sector that’s ripe to lead emissions cuts. But even with renewables, storage and the smart demand management technologies that are revolutionising the sector, there are other parts of the economy which need to do their part.

That’s why, at the last election, Labor took a comprehensive set of policies to meet our goal of zero net pollution by 2050.

  • An Emissions Trading Scheme for the broader domestic economy.

  • Energy efficiency measures, like better emissions standards for vehicles

  • And more safeguards around land-clearing, as well as improved carbon capture and storage in agriculture 

We can't leave the job of cutting pollution to the electricity sector alone.

But given the immediate price pressures in electricity, the ongoing concerns about energy security and the fact that electricity makes up 35 per cent of our total emissions, it’s vital that we put a price signal into the electricity market as soon as possible.

This is the consensus view of everyone from the Business Council of Australia to the CSIRO.

Now, the Finkel Review has found that, like an EIS, a Clean Energy Target can transform the electricity sector.

Again, by putting a price signal in place.

The Finkel modelling has found that a CET would deliver retail prices 6 per cent lower than business-as-usual between 2020 and 2030.

RepuTex modelling has found that under the Government’s modest targets, wholesale power prices would fall to around $60 per megawatt hour by 2030.

But it also found that under Labor’s more ambitious targets, wholesale power prices would be as low as $40 per megawatt hour.

All of this is what the experts have been saying for a very long time – renewable energy isn’t just the cleaner option – it’s the cheaper one.

More ambitious targets would mean lower prices, because cheaper renewable energy would represent a greater proportion of our energy mix.

And more renewable energy investment would lead to more competition in the electricity generation sector, further lowering prices.

It would also reduce our reliance upon gas, reducing the influence of stubbornly high gas prices on our electricity bills.

And if the Finkel Report can point to these kind of outcomes using a Clean Energy Target as opposed to an Emissions Intensity Scheme, as well as meeting high standards on energy security and pollution abatement, then I’ve made it clear that Labor is prepared compromise from our preferred model.

To put the national interest ahead of a particular preferred position.

If the economic and environmental case stacks up, we’re not going to get stuck in a hair-splitting argument between the difference of an EIS and a Clean Energy Target.

Having said that we are prepared to move, and we represent quite a lot of members of Parliament, I want to sound a note of caution to the terms of our engagement with the Government.

This isn't about writing the government a blank cheque - bipartisan support for a bad deal helps no one.

Or if I can be really blunt, compromise is a two way street. I get the sense that Mr Turnbull is willing to compromise with the right-wing of his party - he just offers my Labor Party take-it-or-leave-it.

He knows best - what would the rest of us know? He has argued both sides of every case.

In all seriousness, we will negotiate with the Government, but it has to be give and take.

I want Labor to be involved in the policy design and the drafting process, because I believe that’s how we can guarantee the best possible result - for jobs and investment and for Australian families and businesses.

I want Josh Frydenberg to sit down with Mark Butler.

You understand compromise in your businesses - it's when parties come together.

We are prepared to make concessions. We are prepared to make concessions from Opposition. But we need the Government to also move.

Mr Turnbull can talk about the 'sensible centre', but you've got to move to it. It's no good telling people where it is - you have got to arrive there.

What happened with the Renewable Energy Target in 2014 is a good case study for this.

At the time, as you might recall because so many of your investors and livelihoods depended on certainty, if you remember the great confusion of 2014.

The endless lobbying the Clean Energy Council had to do, the education you had to set out, explaining the basics to people who should know better.

But as a result of the great confusion of 2014, investment in large-scale renewable projects fell by 88 per cent.

For those of you who work for international companies weighing up decisions about investing in the Australian market, what a frustrating period it must have been. To report to the parent company and say: 'Well, they sort of get it - but they don't. The money will be ok, you'll get a return…possibly.'

Labor stuck to its guns. We worked with industry.

We had a view that a higher Renewable Energy Target was better, but industry said: 'Bill, we just need to keep it alive - keep the framework alive'.  

So we compromised. Interestingly, at that stage, so did Mr Abbott.

We held firm on an effective target of 23.5 per cent renewables by 2020. Thank goodness we did.

We are now approaching 2020 with a strong medium-term signal for investment and job-creation in renewable energy - your sector has seen the benefits of ending that period of the great confusion. 

But we all know that there’s so much at stake, in the long term in particular.

Bloomberg is estimating $7.4 trillion of global investment in renewables between now and 2040.

Our region, the Asia-Pacific, will be home to as much investment in generation as the rest of the world combined.

And of course, we need to provide certainty to grab our share of that global investment.

It is also important to say that while we’re focused on those opportunities, we need to be mindful of the effects of transition. On workers, on communities, on whole sectors of our economy.

One way or the other, I’ve spent my whole working life ensuring people are not forgotten when change occurs. 

Now, I know the worst thing is pretend to people that change doesn't have to happen.

To indulge in the fantasy that everything can stay as it was, forever.

When you play that game, you end up with is that brief illusion of comfort followed by sudden, demoralising shocks.

The kind of dislocation we saw following the announced closure of Hazelwood.That was a whole workforce, a whole community knocked-around by an event that everyone agreed was inevitable.

But if it was inevitable, failing to plan for it was inexcusable.

Let me be clear: Hazelwood's closure was too fast, too harsh on too many  –  we don’t want to see it repeated around the country.

The priority of the parliament should be what the CFMEU coal miners have described as ‘just transition’ – where blue-collar workers and their communities are prepared for change, and equipped to benefit from it.

So the hard-working, highly-skilled workforces in sites nearing the end of their safe usage can find new jobs and new opportunities in the new industries created by a clean energy future.

But in order to have that just transition, you need certainty.

You need to lock-in an approach that all sides of politics, regardless of where they sit periodically after elections, that we can have a consensus.

One that all corners of the country can agree upon.

At the beginning of this year, Mr Turnbull spoke about ‘drawing the battlelines’ on energy policy.

I think there have been enough battles, more than enough battles.

I say instead of digging out your trenches and marking your battlelines, or revisiting old ones – let’s go and find the middle. The common ground, the 'sensible centre'.

Let’s use all 50 of Dr Finkel’s recommendations as the foundation for a better, bipartisan energy and climate policy.

Let’s just get on with it. Let's just work on a price on pollution now.

Let’s get the legislation into the parliament and through the parliament this year, ideally. So it’s not buried or derailed by an election campaign or leadership instability.

This will require all of us to rise above politics-as-usual. To stare down vested interests, the familiar voices of those who profit from the status quo.

I’m up for that challenge - even if that means making life for Mr Turnbull easier.

Because I happen to think taking action on climate change is more important than the next opinion poll.

It is about helping families and businesses who are battling rising costs. 

I think it is a terrible pity for the nation that the internal argument in the Government raises the risk or prospect of lowest common denominator policy.

I am not saying that because I want political advantage. I just say it because it's a fact, a risk.

I continue to hope Mr Turnbull will decide to do what is right – rather than deciding something less optimal is an acceptable outcome.

And today, I have endeavoured not to have too many hard-and-fast lines in the sand for the Government.

I want to create an environment where Mr Turnbull can persuade his colleagues to put the future first.

For Labor it’s about jobs, investment and energy security. It's about real action on climate change.

It's about all of these things for the next decade and beyond, for the Australia of 2030 and 2040.

So my promise today is straightforward: whether we’re in government, or opposition, Labor will just get on with it.


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