Question

Legislative Council

QUESTION: Renewable Energy

August 2nd, 2018

On the 2nd of August, Mark asked the Treasurer questions in relation to the ministerial statement he made regarding the supply of electricity to the state government.

The Hon. M.C. PARNELL: The minister just a short while ago read out and distributed in this chamber a ministerial statement on massive cost increases under the Labor government electricity deal. In that statement he describes how, in his opinion, the previous government mismanaged the contract for providing electricity for the South Australian government. He says in the statement:

As a result of this agreement, from 2020 the state government will source its electricity via a Generation Project Agreement with Solar Reserve and its Aurora solar thermal generation project near Port Augusta.

My question is: does the Treasurer support that exciting renewable energy project, and is he pleased that South Australia will be obtaining its energy from that renewable source?

The Hon. R.I. LUCAS (Treasurer): I'm always excited about renewable energy, Mr President, but I'm less excited about massive increases in costs to government departments and agencies. The subject of the ministerial statement today addressed the bridging period between 1 January 2018 and the potential new contract in late 2020.

The only comment I would make about the excitement of renewable energy—and I have spoken about this in this house before—is that, whilst I think the overwhelming majority of Australians probably acknowledge the fact that eventually we will move to a preponderance of renewable energy in terms of our generation, the issue which is debated at the moment and has been debated for a period of time is how you manage the transition. There are differing views and strongly conflicting views as to how you manage the transition.

It is my view and the government's view that you try to manage the transition from where we were to where we might be in a way which minimises the increases in costs to struggling South Australian families and also maximises the security. That is, you don't have the situation where the lights go out in South Australia because we happen to be at the end of the grid. With all of those caveats, as long as we manage the transition sensibly, then I'm sure that all Australians would acknowledge that we are going to move to a much greater percentage of renewable energy.

In relation to the particular contracts, etc., I don't have enough detail about that particular contract to offer a detailed response other than ultimately, as I said, we will all acknowledge the fact that we will have a much greater percentage of renewable energy in our energy generation mix in the future.

The Hon. M.C. PARNELL: Supplementary: I thank the minister for his response. In his response he only named two factors that he said were driving the government's policy, that is, to decrease the cost of electricity and to maximise the security of supply. Are there any other considerations that the minister thinks are important in our electricity supply; for example, reducing our carbon footprint?

The Hon. R.I. LUCAS (Treasurer): Yes, there are many other factors, including reducing emissions. There are many other factors as well in relation to both our National Electricity Market and managing the mix that goes into the national energy market and the electricity market in particular in South Australia. However, there are related issues, some of which we debated only last week in relation to gas supply, gas reserves and how we might access them. So there are significant economic and environmental issues in relation to those particular issues as well.

Let me comfort the honourable member by acknowledging his green credentials and my very significant green credentials, by indicating that I understand the point he is making. I can only agree with him. The extent of the agreement we will have to canvass on the particular issues at the time.

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