Mr PEDERICK (Hammond) (11:26): I rise to speak to the Public Works Committee's fifth report of the 54th parliament. The report is in regard to the South Australian virtual power plant project. This is obviously a project that is being looked at by the Public Works Committee because part of the phases of this work is around how much money is invested in the project. The issue is the potential for the project to go over $4 million, so for obvious reasons it goes direct to the Public Works Committee, which has looked at this issue.

I think it is a great opportunity for South Australians to reduce their power costs after having the worst costs in the world inflicted on them by the previous Labor government, who, even though they make out they have green eyes for energy, invested over $100 million in dirty diesel generators, which, if all fired up at once, would burn 80,000 litres.

The Hon. D.C. van Holst Pellekaan: Nearly 400.

Mr PEDERICK: I have been corrected: it is nearly $400 million on dirty diesel generators that would burn 80,000 litres of diesel an hour. I remember saying to the former energy minister that he would not need just a truck to fuel these diesel generator; he would need to hire a ship to make sure that we had enough diesel on board to power these plants. That is just a reflection of what has happened with power policy by the previous Labor government.

What happens is that so many private people have had to invest tens of thousands, even hundreds of thousands, on an individual basis, depending on what they are trying to power at home. It is not hard to spend in excess of $20,000 to have a diesel generator. In fact, I have spoken to people who have spent over $20,000 to have a generator in place on an automatic switch so that when the power does drop out, if it does, especially in the dark days of Labor, they do have continuous power.

I have talked in here before about vital industries, such as dairies. Many of them have spent tens and tens of thousands of dollars to make sure that, when they are powering those rotary dairies that host 50 or 60 cows, they do not have to have put their cows through missing a milking and the associated issues with managing the dairy herd when they do miss a milking. I also reflect on what happened on a broader scale when hundreds of millions of dollars were lost to production. Olympic Dam had to shut down after the breakdown on 28 September 2016, when, because of the previous government's policy, one circuit-breaker dropped the whole state out. It is just outrageous that the previous government gave us the most unreliable grid but the most expensive power, and that is if you could get it.

This virtual power plant is helping follow through on our policies to save money for the good constituents of South Australia. I have 14.1 kilowatts of solar panels on my properties. I wish I had a lot more, but there is only so much roof space. The issue for South Australians is the ever-increasing price of power, as it was under the previous government. We are now trying to clean up Labor's mess with battery programs, solar panel programs and energy programs for industry and also getting that vital interconnector built through to New South Wales. The previous government was in favour of it until we decided we were going to implement it. We put that seed money in for the energy companies to look at that vital connection to the 53 per cent of green power from this state through to the coal power in the east.

A lot of people are allergic to coal-fired power stations. They talk about climate change and get emotional and that sort of thing, but I believe that we are the biggest exporter of coal in the world and that we cannot get enough ships into the east coast of Australia. If we are serious about climate, we need to look at it on a global basis and understand that coal plants are being built every second of the day somewhere in the world. Whether that is right or wrong is a bigger policy debate.

Certainly, people have to have power—that is the issue—and they have to have stable power. We need to have a mix of base load, so there is still a place for coal. There is obviously a big place for gas, but then we see some people pushing back against the gasification of the Leigh Creek coalfield, which, sadly, had to shut down because the previous government forced the destruction of a perfectly good power station at Port Augusta. I think if they can get this gasification project up and going it will be a great project for this state.

However, you do need to have that base load and transition power also in gas to work alongside the bulk of green energy, and it is the bulk of green energy in this state. Green energy is intermittent. What we are doing on this side of the house is making sure that people can connect to the system so we can have storage. Power options are getting cheaper every day. They have been very expensive over the last few years but, as time goes on and there is more uptake, people come on board. However, we still need those other sources.

This project came about with the establishment of the Renewable Technology Fund, and that was about incentivising the deployment of next-generation storage technology to provide system services such as fast frequency response and peak generation capacity as well as broader community benefits such as affordability, which I have been talking about, and job creation. I note that Tesla was involved in the virtual power plant that was approved by the previous government back in December 2017.

This $800 million South Australian virtual power plant project will be delivered over three phases, and that commenced in January this year. During phase 1, 100 systems were installed on South Australian Housing Trust properties. The primary objective of this phase was to streamline installation processes and refine customer engagement. Households have retained their existing energy retailer during this period. This phase of the project has been completed.

In phase 2, 1,000 systems are going onto South Australian Housing Trust properties. The primary objective of this phase is to demonstrate the aggregation platform for the system security services and retailer model and to prove commercial viability of the virtual power plant at scale. Then we roll into phase 3, which is the full rollout of up to an additional 24,000 systems on government-owned properties, mainly but not exclusively South Australian Housing Trust properties, plus 25,000 systems on private properties via an approach to opt in if you think you can manage that approach.

This was referred to the Public Works Committee, which has contemplated the proposal. They have done some consultation across the housing department, Treasury, the Crown Solicitor's Office and the Office of the Industry Advocate. They have looked at a whole range of issues around it and they have recommended that the public work go forward. I fully commend this project.