Rewiring the Nation policy

I move:

That the Senate—

(a) calls on all senators to consider the effectiveness of the Government's 'Rewiring the Nation' policy;

(b) acknowledges and supports the intent of the policy, which aims to maximise the amount of variable renewable energy in pursuit of meeting or surpassing Australia's 2030 Paris Agreement targets;

(c) notes with concern that the proposed $100 billion investment in transmission infrastructure does not directly contribute to the generation of additional electricity or the storage of energy;

(d) expresses its dismay that this policy may represent an attempt to rectify past investment errors rather than a forward-looking strategy for sustainable energy development;

(e) observes that there is significant lack of social licence for this policy within the communities it will impact, as well as deep reservations among the Australian population; and

(f) noting the current approach of the policy, asks the Government to rework the current strategy in a manner that is more aligned with the immediate and long-term energy needs of Australia, as well as the expectations and welfare of its communities.

This motion is about the government's Rewiring the Nation policy, and I must say that, now that I sit as an independent, it's a joy to be able to debate the merits of policy, not the politics of it. So I'll say right upfront that the intent behind this policy I do support—that is, to bring down emissions and increase renewable energy in the system such that we can meet and, hopefully, beat our quest, which currently is a 43 per cent reduction, which is the government's current Paris target.

When we debated the legislation of that 43 per cent target last year, I stood in this place and I said I didn't think 43 per cent was ambitious enough—and I still don't, but I'll have more to say on that at a future time. As responsible legislators, our duty is to scrutinise and evaluate the effectiveness of such policies, ensuring that they provide value for money and benefit for all Australians. I don't think Rewiring the Nation will achieve that. Rewiring the Nation is going to require about a $100 billion investment in transmission infrastructure underwritten by $20 billion of taxpayers' money. Again, while the intent is commendable, I question whether this investment offers the best value for money and whether it truly embraces a future-focused strategy for sustainable energy development.

Firstly, I'd like to acknowledge the ambitious goal of 43 per cent. But, while commendable, this target, in comparison with those of other nations, is not as ambitious as it could be. With the current pace of emissions still rising, causing temperatures to head towards 1.5 degrees, we need to be doing more. As a nation we have the opportunity to do better, to be more ambitious and demand more-efficient energy transmission options. The current version of the Rewiring the Nation policy faces several significant challenges: first, extremely high cost; second, slow rollout; third, lack of social licence; fourth, increased fire risk; and five, the potential risk of grid insecurity. The policy's focus on stringing wires and poles across our country to create an enormous infrastructure is economically inefficient and will lead to higher prices for consumers at a time when all Australians are already grappling with the escalating costs of living.

Those listening at home may not know that a portion of their electricity bill is made up of a supply charge. You'll see it on the back of your energy bill. This charge funds the transmission and distribution infrastructure that transports electricity from generators into the market. With the government planning to invest $10 billion in underwriting tens of thousands of kilometres of transmission lines, this is part of what is known as a regulated asset base. This asset base is the asset base of mostly foreign owned companies that build the transmission lines, and it will increase by more than $100 billion. The Australian Energy Regulator sets a rate of return on these assets, which is currently 5.75 per cent, and that gets recovered from all energy users. That's everyone in this chamber and everybody listening at home. Given the enormous amount of transmission suggested in AEMO's integrated systems plan and its incumbent economic inefficiencies, these policies need to be revisited to put accountability back on those who are building the renewable systems, such that they have to count in that project the costs of transmission. If those projects don't stand up if they have to pay for the transmission, then why should the Australian taxpayers, the Australian energy users, have to pay for it?

For the Albanese government to meet its 2030 target it will need to deliver a minimum of 86 gigawatts of variable renewable energy, or VRE, as it's known, as well as at least 46 gigawatts of firming storage. That could be batteries, pumped hydro, gravitational—there are lots of different technologies out there to do that. Yet the transmission required, according to the ISP, to reach a 43 per cent reduction will not even be built by 2030, and that's at best. Projects like the Victoria to New South Wales Interconnector West, or VNI West, as it is known, as well as Snowy 2.0 and the transmission needed to service that will not be fully online until after 2029. This slow rollout and enormous cost blowouts mean that these projects will have little to no measurable effect and certainly will not be contributing to a 43 per cent target.

So I appeal to the chamber to see how important it is that we ask the government to reconsider the Rewiring the Nation policy. As senators our role, on behalf of the public, is to review and evaluate the effectiveness of policy. It is our responsibility to oversee a rewrite of the energy transmission plan, to deliver sustainable, reliable, cost-effective energy that meets the needs of Australia now and in the future.

I will give a little bit of a history lesson for those at home. When Sir John Monash set up the State Electricity Commission of Victoria he had to look to how he was going to generate electricity. He knew that there was coal down in the Latrobe Valley, so he built the generation plants down there. Because of the technology advances, he knew he could transmit it from the Latrobe Valley back up to Melbourne. It was a noble and good thing to do at the time. Now, as we all know, the fuel needed to fire up our energy sources is everywhere. Wind and solar are everywhere, so building transmission is not needed. If we were to consider alternative uses of that $100 billion, and there are many, we can come up with better ways than spending $100 billion on transmission that does not generate one electron and that does not store one kilowatt hour of energy.

By way of an exercise, I sat down and asked, 'What would it cost to put solar on every household in Australia?' There are 9.275 million households in Australia. For a five-kilowatt system, at about $7,000, that is $65 billion. That's a lot less than $93 billion. If you were to put a Tesla battery in every house, at about 10 grand a pop retail, that would get you to $93 billion, a lot less than $100 billion. It doesn't take long to figure out that $100 billion spent rewiring the nation is a complete waste of money. That's not to say that some transmission isn't needed—some is, particularly if we move to offshore wind and other technologies. However, not only are transmission lines expensive—and they don't actually contribute to reducing emissions—but also they don't have the support of the Australian people. Our taxpayers are well aware of the alternatives to poles and wires. Let's face it: there is no social licence for rewiring the nation via outdated technologies and infrastructure. Our constituents know that there are more efficient and effective solutions to energy transmission. They exercise their right, demanding that governments provide those.

Large-scale transmission distribution projects have faced and are facing significant challenges in gaining social acceptance. Local residents, businesses and farmers, usually in the regions, oppose these projects. We've seen lots of protests against them. According to the Australian Energy Infrastructure Commissioner:

… it is feasible that a period spanning 20 years or more can occur between the original prospecting at the project site, obtaining permit approvals and the project eventually being constructed.

Given this reality, there is practically no reasonable hope that any large-scale transmission projects will be approved and built in time to make a meaningful contribution to reducing emissions by 2030. In my own state of Victoria, new transmission projects are facing increased opposition from communities in regional Victoria and other areas. For example, the $3.3 billion planned VNI West—I guarantee you it will not be delivered at that price—has encountered local protests. A KPMG report suggests that this transmission project will likely blow out in cost by as much as 40 per cent. Unfortunately, VNI West is not alone in experiencing cost overruns. Other major transmission projects, including EnergyConnect, HumeLink and Marinus Link, have seen significant increases in cost estimates since 2018. These projects have experienced cost increases of 50 per cent, 190 per cent and 250 per cent, respectively. Collectively, the costs of these four projects has increased by 140 per cent on average in just four years. As responsible legislators, we must ask government to rework the current strategy in a manner that is more aligned with the immediate and long-term energy needs of Australia and Australians. In Australia, nearly half of our largest companies have committed to net zero emissions targets. This is a clear indication of the growing momentum towards a low-carbon economy, but this will require significant shifts in the investment and policy frameworks to accommodate this transition. With coal-fired generation falling away, that number is more than likely to grow. You only have to look at AEMO's second-most aggressive scenario in its 2022 Integrated System Plan, which has all of our coal fleet retiring by 2030. These retirements signal real risk for our national electricity market in the form of both system security and supply security. Fortunately, both are solvable with the use of the right technologies in the NEM, the national electricity market, but cannot be solved by simply increasing the amount of VRE alone. It is the variability of supply from VRE and the direct-current, not alternating-current, nature of these generation technologies that bring about the system insecurities in the system.

We need an energy plan that can support the huge influx of distributed energy resources, like rooftop solar. We need a plan that can manage the increased volume and variability of supply from VRE, because the nature of these technologies does not work in the current national electricity grid. We need a plan that offers stability, security and safety. We also need to consider the very real bushfire risk that transmission poses. I worked on the Black Saturday bushfires royal commission, and I can tell you that the evidence there was that transmission lines pose very real bushfire risks. The only way to mitigate these risks is to use underground or other high-cost technical solutions. These costs would have to be met by other taxpayers or electricity consumers via a higher AER regulated return on the supply charge, as I mentioned before. Long-range transmission lines are also highly susceptible to extreme weather, as the blackout in South Australia a couple years ago showed.

We can do better for the Australian people. We must do better for our country. We must do better for our world. We need to rewrite the Rewiring the Nation plan. It's not all doom and gloom. There are a raft of opportunities and possibilities to provide sustainable, safe, secure energy, but you just have to do it smarter. In conclusion, I propose that the government revisit the current Rewiring the Nation plan. I'm happy to work with them on ways to insert a practical and cost-effective approach to transmission and distribution, to find solutions that are aligned with the immediate and long-term energy needs of Australia that look at more efficient generation, next-generation storage opportunities and better abatement opportunities. Let's look at our energy transmission holistically as a whole-of-energy-supply issue. We can then achieve a more sustainable and economically feasible energy future for Australia—a secure, sustainable, fair and financially viable energy supply. (Time expired)