Mr PEDERICK (Hammond) (11:52): I rise to speak to the National Electricity (South Australia) (Orderly Exit Management Framework) Amendment Bill. It is good to follow such an excellent summation by the shadow minister, the member for Morphett, of why this has come in place. Certainly, my view of the world is that it is at least 15 years too late. This sort of legislation should have been in place before the rush to knock down power stations, coal-fired power stations and gas power stations, with the headlong rush into heavily subsidised renewables.

What we have seen is a whole change of dynamic here in South Australia mainly, because we do have very good coverage of renewables. I think at times we can generate 100 per cent renewable electricity, but they are very rare and far between. The issue with renewable generation is that you have to overbuild the resource by about four times to get enough capacity. At night, obviously your solar panels are not going to work. If the wind does not blow, the wind farms will not operate—apart from the fact the proliferation of these types of technology is causing quite a bit of angst in rural communities.

What we used to have in generation of power was the old J tariff, the night tariff, where you would want to run everything at night because we had base load humming away in South Australia, generator base load from either coal or gas. Because of the lack of industry operating at night and the lack of other demands, it was best placed to get a cheaper electricity rate by operating at night.

What has happened now and over the years is with the renewables that have come online we are encouraged to operate during the day. That is certainly what I have found and I have had solar on my farmhouse for many years now. I came in on the second round of the scheme. I missed the 44¢ per kilowatt-hour scheme.

What is interesting with the proliferation of solar panels, especially on household roofs, is that AGL have suddenly decided that they are going to reduce—and I think they may have already—the payment per kilowatt hour. It had dropped to 5¢ a kilowatt hour and now it is dropping to 4¢ a kilowatt hour. Obviously there is legislation in place due to the amount of solar now, and occasionally people may not be able to export that electricity from their properties.

It is a huge issue in this state and there should have been an orderly exit management framework, or something of its ilk, long ago—as I said, 15 years ago when there was a rush headlong into these renewable technologies. Mind you, when these renewable energy systems are not functioning anymore, when these technologies have reached their end of life, whether it is a wind turbine that has done its 30 or 35 years or whether it is a solar panel that has reached its end of life, essentially the waste will all be buried. Those were the answers I was given from the environment minister, the member for Port Adelaide, when we were discussing the bill earlier this year in regard to how the waste would be dealt with and she indicated that it would be dealt with like all other waste. Essentially, that is what is going to happen.

The issue we have is that probably up to two thirds of the power generated in the national energy market, which is essentially the eastern side of the country we are connected to, is still coal powered, and because of the demonisation of both coal and gas there are coal-fired power stations that, as they generating electricity, are literally falling apart.

We still need that power generation as we move forward and we certainly need gas. We have even seen the government now with their hydrogen plan, which I believe will not work because it is essentially going to be gas turbines and, if there is some way of generating hydrogen, there might be a little bit of hydrogen going through them. As the shadow minister indicated, that is after the gas is trucked in with B-double trucks and many, many tonnes of gas. That is hardly green energy.

Coupled with this hydrogen experiment is the fact that there will be thousands of wind turbines, thousands of solar panels and, from what I have been told, an 80 per cent loss of power from renewable energy to the hydrogen plant. It is totally experimental and you see people like Twiggy Forrest (Andrew Forrest) turning their back on it—he is at the forefront of trying to find energy solutions for his mining operations—and certainly Origin Energy.

That is what worries me: that we have a project that has been budgeted at $593 million, it has not had that budget expanded for three years, and obviously the costs for every other business operating in the state have gone up remarkably, one of those being the price of power, which is not only hurting domestic users of electricity but also putting businesses out of business because the power costs are just over the top.

We recently saw with Bestons' two factories at Jervois and Murray Bridge—and they are struggling at the moment and on a thread—that when the Japanese firm Megmilk were looking at investing in the factories they just looked at the power costs and said that it was just not viable to keep that operation going. With the troubles there I have certainly been working with the member for Finniss to do what we can to make sure that whatever happens with those two milk plants we can keep them operating into the future in a viable manner. It is not as if there is a lack of interest in the businesses, but it is a matter of getting there, and it is a matter of keeping jobs for South Australians and those 170-odd jobs in my electorate.

What we saw with this headlong rush—and we were sitting the day the power went out in September 2016. It was about 4.23 in the afternoon—I do not have the exact date—when we lost all power across the state. I have never seen anything like it. That was under the previous Labor government when the whole state just went out. We never saw anything like that, nowhere near it, in the time we were in government, the Marshall Liberal government.

The thing is we looked at what needed to be done into the future, especially in regard to EnergyConnect, the new interconnector into New South Wales. That is a vital part of the equation. But some of the stakeholder feedback in regard to this energy framework exit plan is that many of the people who are involved in this are of the view that voluntary agreements are superior to this plan. Certainly, Alinta Energy made the statement that they consider the:

…Orderly Exit Management Framework (OEMF) unnecessary and that voluntary negotiations between the project operator and the jurisdictional government are superior to a mandatory mechanism.

The Australian Energy Council is the peak industry body for electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. The AEC noted:

There are practical challenges associated with regulating the ongoing operation of generators with bespoke operating requirements. It is therefore crucial that the [Orderly Exit Management] Framework, if implemented, acts only as a last resort measure and that due regard is given to existing regulatory arrangements supporting an orderly transition.

Certainly, as I discussed, this instrument is a direct result of governments allowing an unmanaged and government-subsidised flood of renewable energy into the market that has had the direct result of base load electricity generation having to retire because of age and economic realities. Too many times we have heard in here, especially from the Minister for Energy, that it is the cost of bringing on gas-fired generation that is the issue. No, the issue is gas-fired generation is struggling to compete with the heavily subsidised renewable generation of electricity which, just by its very nature, does not work all the time.

We need base load, and economical base load, to assist in running this state. These same Labor governments require this base load generation to avoid blackouts and thereby protect themselves from voter backlash. Is that not interesting? Ultimately the costs incurred by the generators in remaining open will have to be recovered from the applicable jurisdictions' electricity customers, who are already struggling with the cost of power in this state.

The former Weatherill Labor government refused to enter into a voluntary agreement to keep the Northern power station open. Instead, the closure saw power bills skyrocket. The Malinauskas Labor government, in November 2022, reached an agreement with AGL to keep the Torrens Island B power station open, and the cost to do so was $19.5 million. That was passed on to South Australian consumers through an increased SA Power Networks network charge in their power bills, so there are more costs to South Australian consumers. We are seeing that at a time when the electricity bills in this state are the highest in the nation and as the Malinauskas Labor government adds another $19.5 million to this burden on families and businesses to pay more for their electricity bills.

What we need to see is orderly work. We certainly need to see it in regard to gas-fired generation, which will be needed until at least 2050, because we need some thermal generation to make sure this state and this country works. Certainly, we need to take a serious look at the federal Liberal and National parties' proposal of nuclear if we are going to go anywhere near net zero. If we are going to go anywhere near net zero with power generation in this state, in this country, that is where we should be looking as a base load supplier working around all of these renewables that we certainly have in this state.

The shadow minister mentioned the Heywood interconnector. When that had a couple of towers blow down back in 2022, not far from where I live, up between Cooke Plains and Tailem Bend, it caused a major frustration. It essentially shut that interconnector down and left just one interstate connection of that underground interconnector, through the Riverland. It caused a massive issue in the market on this side of the country, and obviously there are issues with a lack of being able to not only export but import electricity on that interconnector, which is so vital.

That is why, prior to the 2018 election, it appeared that all sides were keen on the EnergyConnect proposal to build the interconnector through to New South Wales. I note that the South Australian side of the project has been built. When it gets completed, it will be a major support for the amount of renewable energy that we generate in this state, in that we can export it and then can also import thermal-generated energy to come back if we need it.

I want to talk about the EnergyConnect project a bit and note that construction of the South Australian component of Project EnergyConnect, the new high-voltage transmission line between South Australia and New South Wales, has been completed—these were statements made at the end of 2023. Project EnergyConnect is the largest transmission project ever delivered by ElectraNet. The transmission line covers 206 kilometres from Robertstown to the South Australia-New South Wales state border. It includes South Australia's first 330-kilovolt substation at Bundey.

ElectraNet Chief Executive Officer Simon Emms said that Project EnergyConnect is a transformational project for South Australia and the National Electricity Market. Project EnergyConnect is the latest in a series of major network projects delivered by ElectraNet in the past five years, essential to enabling South Australia's clean energy transition and net-zero goals. A quote from Simon is:

The interconnector strengthens South Australia's position as a leader in the transition to a low-carbon economy and enhances our ability to export our abundance of renewable energy resources. As well as unlocking renewable energy developments, it strengthens South Australia's power grid, and will deliver price savings for consumers. Once in full operation the new interconnector is expected to deliver bill savings of $127 for a typical South Australian residential power customer and between $6,000 and $18,000 for business customers.

Project EnergyConnect is already contributing to South Australia's clean energy future through new renewable energy developments in excess of 2 gigawatts including wind, solar and batteries that are now proposing to connect to the grid.

I note some comments at the time from the South Australian Minister for Energy and Mining, Tom Koutsantonis, who said:

I congratulate ElectraNet for completing the South Australian side of Project EnergyConnect.

I further quote:

The Malinauskas government now looks forward to final investment decisions being made by the many renewable energy companies which intend to use this link to the NSW market. South Australia has plenty of sun and wind resources which can be harnessed as energy for sale to NSW.

They were comments from the minister near the end of 2023. In question time last week we had some interesting comments from the minister. In answer to a question the other week on, 12 November, the minister stated:

There are a number of factors in South Australia that are hard to overcome. One of them is the number of customers per line of transmission across the state and the distribution lines. We have one of the longest and skinniest grids anywhere in the world with the fewest customers on it. It makes up nearly half of our bill. Members—

and this is the interesting line—

opposite forced South Australians, and the people of New South Wales, to pay an extra $2.6 billion, or more, I think, to put up a brand-new interconnector that is still not operational.

Here is a minister who a year ago was praising the building of this interconnector. He chops and changes with his view of it, but he knows as well as I do that this will be a vital connection link between our states to not only bring down power prices but stabilise the market because of the lack of thermal generation in this state.

I look forward to the discussion as we go into committee on this bill. One thing we need to do in this state is stop power prices going through the roof and look after the citizens of the state in their homes and their businesses.