Hansard debates

Mrs McARTHUR (Western Victoria) (15:47): Look, poor Ms Taylor, she is part of the old cold war antinuclear bunker mentality that just will not have a bar of new ideas and new technology. You want to be technology agnostic and embrace all forms of energy, because we need to increase supply in this state. You have shut down supply. We need to increase it. Whether it is from advanced coal-fired power stations, nuclear energy, wave energy, waste to energy, renewables, hydrogen, let us look at the whole lot so we increase supply. Batteries actually are not going to increase the supply of energy, I have got to tell you. I have got dairy farmers, Ms Taylor—you would not know about what is happening out in the bush—who have to have containers that hold diesel generators so they can run their dairy plants, because there is no reliable power supply to their dairy industry. Now, that is a disgrace.

Look, I am here to support Ms Bath’s motion in support of a parliamentary committee inquiry into the impact of the closure of Hazelwood power station on the Latrobe Valley and the expected economic effect of the closure of Yallourn, now slated for 2028. Once again, as Mr Quilty said, we heard from the workers in the wonderful union movement that the Labor government pretend to represent that they embrace nuclear. You are not listening to your own workers, Ms Taylor. Never mind. It is important to have this inquiry to clear away some of the political fairy stories. I have heard the Labor Party commentary in recent days on the closure of Yallourn, and I have to say I do not believe it: ‘It’s all going to be wonderful. The jobs will be replaced immediately—and the electricity. The plant generates 22 per cent of Victoria’s power and 8 per cent of the national market—swapped at the flick of a switch with no consequences for the security of baseload supply and no price hikes for business or domestic energy consumers’. Well, what a fairytale that is. Tell that to the hundreds of Hazelwood workers who four years later remain unemployed or underemployed, working part-time or in lower skilled, lower paid, less secure jobs. This is despite a fabulously expensive taxpayer-funded support package for the Latrobe Valley. Why should Yallourn prove any different?

My concern, and I fear it is a realistic one, is that yet again we will see the plant close, hundreds of millions spent by a panicking government and yet unemployment and economic deprivation inexorably increasing. This is why I am particularly supportive of part (1)(c) of the motion, which seeks to investigate the performance of the Latrobe Valley Authority, a wonderful quango that has been created, and the value for money achieved by the $266 million originally ploughed into the Hazelwood transition fund and the further $125 million committed last year. We absolutely need to understand how much each replacement job has cost and how sustainable the attempts to transition Hazelwood workers have been. If we cannot do so accurately, it will be impossible to understand the real cost of closing Yallourn or any other coal-powered generator. We cannot just look at the higher energy prices for domestic and industrial users; the cost is so much more. We also have to add to the price tag the hundreds of millions of dollars required to subsidise the economy of an entire region when viable existing businesses are closed.

With the greatest respect, I have got little time for ministers’ predictions on this. They have got form in this area. I do not just mean the laughably optimistic estimates of job replacement figures or a puzzling ignorance of the most basic truth that reduced supply of an asset will increase its cost. In terms of understanding future energy market developments, the Labor Party at state and federal levels have shown time and time again that their ideological biases will always cloud any clear-sighted, long-term strategy for energy generation and infrastructure. It is only a decade ago, for example, that the Gillard Labor government’s contract-for-closure scheme would have seen coal-fired power plants paid money to shut for fear that without it they might otherwise continue operating indefinitely. Fortunately the idea was abandoned, yet four of the five plants chosen have in any case been decommissioned without a single taxpayer cent being spent. At the state level we only have to look back at Minister D’Ambrosio’s comments before Hazelwood closed to see how much today’s predictions are worth. She said:

Electricity prices will still be lower than other states and that is something very important in this …

Well, we all know what happened here. Prices soared. Victoria became a net importer of energy for the first time in 10 years. The Australian Energy Regulator found wholesale energy prices rose 85 per cent between 2016 and 2018, and the Australian Energy Market Commission noted household bills increased by 16 per cent when Hazelwood went offline. In a state which has traditionally enjoyed low energy costs, industrial and home consumers are still paying the price today. The same failures to anticipate future developments are evident in the expansion of renewable power across Victoria, which has occurred with an almost incredible lack of foresight with regard to infrastructure construction. The problem the sector experiences now with grid connection was hardly difficult to predict, and yet this lack of planning will leave Victoria susceptible to blackouts and higher energy bills in summers to come. What is interesting is that these mistakes are not simple arrogance. They are underpinned by ideology which not only outlines the ultimate vision but trumps common sense in decision-making.

Ministers and, I suspect, many in the public service seem to believe that because an immediate transition to renewables is the sacred goal, anything which gets us there might be the right thing to do, whatever the cost. I have nothing against renewables, but you need to work out how you are going to transition to the entire change. We head hell to leather to higher renewable targets without the supply network. We close coal power plants without the replacement base load. This is the same mindset which bans nuclear power outright, as I have said, and places a moratorium on onshore conventional gas exploration currently. Even a long-term transition towards higher renewable generation via the use of gas for base load is rejected. The Andrews government’s faith that new batteries and increased interconnection will tide us over is just that—faith.

Surely on this, of all issues, it is far too important to take chances. Sixty-seven per cent of national electricity market generation last year came from coal, 8 per cent from Yallourn alone. Ditching coal without gas or any other dispatchable power can only leave the Victorian grid vulnerable during periods of sustained high temperatures or renewable droughts. In fact, if you look outside the Victorian government or environmental activists, it is difficult to find anyone who thinks this immediate eggs-in-one-basket approach is advisable. Snowy Hydro chief executive Paul Broad is fairly typical in noting:

You’re going to need more gas plants in Victoria to keep the lights on.

Keeping the lights on would be a good idea. He said:

Batteries are all well and good. But there’s a massive opportunity for gas power, the market is screaming out for it in Victoria, and even more so now …

with the planned closure of Yallourn. This high-stakes environmental idealism of the Andrews government should be of great concern to moderate Victorians who want to keep the lights on. With the closure of Hazelwood, it was evident that Labor swapped blue-collar jobs in the regions to win green votes in the city, but the consequences of lack of base load will affect the entire state. And there is the economics of a $252 million brown coal royalty grab, which soon after required a rescue package for the Latrobe Valley that is now approaching $400 million. I urge you to support the motion.

Sitting suspended 3.57 pm until 4.18 pm.