Wednesday, 4 March 2020

Bills

National Electricity (Victoria) Amendment Bill 2020

Second reading

Debate resumed.

Mr R SMITH (Warrandyte) (11:39): I want to turn now to the appropriateness of the RIT-T as the regulatory regime, and there have been a number of reviews into the operation of the RIT-T, most recently from February 2017. A review was ordered by the COAG Energy Council, which Victoria’s current Minister for Energy, Environment and Climate Change sits on, so I think we should reasonably expect her to be across these issues. I want to read a number of quotes from this report. They are relevant. They go to the reasons why the RIT-T is in place, and importantly I want to impress on the house the appropriateness of the RIT-T, the benefits of the RIT-T to the consumer and in terms of the application of transparency and efficiency, again, its appropriateness as the regulatory regime. I also want to point out that as a member of the Council, then and now, the minister knows the benefits of the RIT-T and knows that it is appropriate.

This report is entitled Review of the Regulatory Investment Test for Transmission, and it came to the following conclusions. Firstly:

… the review has found that the RIT-T in its current form remains the appropriate mechanism to ensure that new transmission infrastructure in the NEM is built in the long term interests of consumers. Further, it remains an appropriate mechanism for the assessment of interconnection investments.

The paper goes on to say:

Importantly, the RIT-T is able to take account of the potential market benefits which are commonly identified as potentially accruing from such investments—including environmental and competition benefits—and allows for a robust cost-benefit analysis to be made.

…

The findings of this review are consistent with previous reviews of the RIT-T, where it has consistently been found to be a robust and appropriate mechanism to assess transmission network investments and to provide an appropriate balance between rigour and timely investment decisions.

The report also says:

The RIT-T is a cost-benefit process that is applied to all new transmission network investments that have an estimated cost greater than $6 million. It was designed to replicate investment outcomes in a competitive market environment. It does this through identifying the costs and benefits associated with a new project, along with any alternatives.

Also, the report concludes that:

… the RIT-T plays the role of gate-keeper—ensuring that consumers only pay for investments that are economically efficient and optimal overall for the NEM. It aims to ensure that all credible options for addressing an identified need are considered, and that the relative merits of network and non-network options are considered on an equal footing.

…

The RIT-T is designed to be a consultative and transparent process for transmission planning. The test allows for public consultation and comment within a transparent framework.

It is these characteristics of the RIT-T—of the regulatory framework—that the minister wants to remove. The point I am making with these quotes is that the minister has been made abundantly clear of the reasons for and the benefits of the RIT-T, and the subsequent disregard for the checks and balances that are in place and the consumer protections is something Victorians should be very concerned about, particularly in light of the minister’s record around energy policy, which has demonstrably resulted in higher prices and less certainty.

Industry has its comments to make about the removal of this regulatory framework—namely, the industry representatives have said that the RIT-T process that would prevent excessive network spending and give network businesses sufficient but not excessive returns on their investments is an important part of this regulatory framework. It has also included consideration of the interactions between network businesses and consumers to ensure investment is focused on what is valued by consumers. So removal of the checks and balances, as the minister wants to do, is clearly not in the best interests of the Victorian consumer.

And another reason that the minister gave with regard to removing the current regulatory process is that the RIT-T process takes too long. But indeed the COAG Energy Council review into the RIT-T was not entirely supportive of that particular view. The report says that:

Commissioning new large-scale transmission lines, including interconnectors, is complex, requiring obtaining easements, permits, design, construction and can take up to 7 years after the RIT-T is completed. This means that, in practice, streamlining the RIT-T alone—

or in this case removing it altogether—

is unlikely to significantly reduce the lead-time for major projects, including interconnectors.

It goes on to say that:

This conclusion does not ignore the fact that it is important that strategic benefits … are implemented in a timely manner. But consumers bear the final cost of any regulated transmission investment in the NEM and it remains appropriate that a thorough cost-benefit analysis be undertaken to ensure that the most efficient option is selected.

So again, the review into the RIT-T that the minister herself saw and was part of commissioning says that the issues that she raised as her reasons for the removal of this regulatory regime are not actually ones that exist, and we probably can see that state and local government planning processes would have a significant impact on the introduction of doing these augmentations and upgrades of the transmission network as well as perhaps an environment effects statement. The department did undertake to tell opposition what the time delays that resulted from these other planning requirements were. Unfortunately we were not able to get that; we got some representations with regard to some examples of how long the RIT-T added to the process, but no examples of how these other regulatory regimes impacted.

I just want to turn now to some particulars of the bill, and in particular clause 16ZA, which tells the minister that she must consult with the Premier and the Treasurer and the Australian Energy Market Operator. It does not give any requirement for the minister to actually publish what concerns any of these three bodies might have, and so we would not know if AEMO did have a problem with what the minister was doing, because there is no requirement for that to be public. There is clause 16ZC, which specifies that an order made by the minister would override any existing agreement or contract; I have some concerns here. The government has proven that it has a flagrant disregard for contracts, the point being that contracts and agreements made under law should be respected and in broad terms they should be honoured.

There is clause 16ZH: I guess I have as much contempt for this particular clause as the minister has for the processes of the Parliament. This particular clause allows the minister to begin the process that is laid down in the provisions of this bill before the bill actually becomes law. So I would say that it is sheer arrogance for the minister to assume that this bill will receive royal assent—that the crossbenchers will fall into line. She has that arrogance clearly because she already has included, as I said, a clause which will allow her to include as part of the process provisions of this bill that have not actually even been passed yet. So it is either arrogance or it is panic, and I would suggest that there might be an argument for it being panic, because there are not too many circumstances where the drafting of a bill and the introduction of it to Parliament to facilitate major infrastructure projects is so desperate that you cannot get the bill done in time to actually start moving on those major investments. So I find that particular clause that gives that power to the minister to be perhaps not one that is in keeping with the proper processes of this Parliament.

Also, in drafting this bill and bringing it to the Parliament the minister has forgotten to actually talk to the industry about it. We have examples where the Australian Energy Council chief executive said that no industry consultation had been undertaken on the proposed bill, nor had it been sighted. And in fact industry participants have also told me that they had no idea that this bill was coming to the Parliament and are very disappointed in the government for not actually telling them about this groundbreaking—and I do not use that term in a positive way—piece of legislation that removes oversight of the regulatory regime. It is not a great thing, and the industry will tell you that, as have many of the participants.

The Australian Energy Council have also expressed their concerns in a press release, which says:

The kind of state-based intervention proposed by the Victorian Government will likely create instability for would-be investors in the energy market …

The Energy Users Association of Australia in their press release said:

While there is certainly potential to improve the rules governing the energy market and regulated grid investments, they are in place to protect consumers from poor decision made by others …

This particular release went on to say:

Equally, if there has been an overbuild of renewable energy in parts of the grid that is now impacting the financial viability of these generators, then consumers shouldn’t be asked to bail them out by paying for their grid upgrades.

I also want to make the point that this bill in its original form, the National Electricity (Victoria) Bill that was introduced to this Parliament in 2005, was introduced by then Treasurer John Brumby, who said it aimed to:

… provide a single objective for the national electricity market. That objective is to promote efficient investment in, and efficient use of, electricity services for the long-term interests of consumers of electricity with respect to price, quality, reliability and security of supply of electricity, and the safety, reliability and security of the national electricity system.

…

In short, these reforms will strengthen and improve the quality, timeliness and national character of the governance and economic regulation of the national electricity market.

It is quite bizarre that just some years later the government of the day would want to push back on what Treasurer John Brumby said to remove those elements of reliability and security, remove those elements of transparency and governance and take their own path.

In short I will say that this apparent disregard for transparency, the lack of protections that consumers will have as a result of this bill and the trashing of an independent regulatory process that has been widely validated as being the right one to protect consumers—in light of all those issues the opposition will be opposing this bill. The minister’s record is on display. The energy policy that this minister has put forward over the years of the Andrews government has resulted in higher prices and less certainty of supply. The minister’s record is on display for Victorians and as such we will be opposing this bill.

Ms THOMAS (Macedon) (11:50): I am really pleased to be able to speak on this very important bill, but before I do so I need to go to some of the things that the member for Warrandyte has said. In his contribution he has demonstrated to the house that he fundamentally misunderstands the bill and that he also has no idea about evolving energy policy. The Liberal Party unsurprisingly have no vision for the future. Let me say this: if the choice is between living one’s life audaciously and living complacently, then I know which side I am on, because those on the other side of the house and their mates in Canberra have ensured that we have seen turmoil in our energy markets.

What we have is a completely incompetent federal minister for energy, one who has denied certainty to the market and has slowed down investment in energy generation and indeed in energy transmission. In contrast here in Victoria we have led the charge and we have legislated certainty so that people know where we are headed. And we are headed where the world is headed. We are headed towards a future where our energy is generated by renewables, and it is a sustainable energy future. What we need is a transmission network that can evolve and develop to support the future of energy generation.

Time and time again I have seen those on the other side of the house completely fail to understand the way in which the generation and transmission networks work together. But can I say this too: I really want to make it very clear that when it comes to this bill, it is not about breaking off from the national system. This is what I mean by fundamental misunderstanding and indeed misrepresentation of the intention of the bill. It gives Victoria an alternative pathway. This is about ensuring and protecting the reliability of our energy system into the future. The current national framework as it stands does not deliver the agility that we need here in Victoria to ensure that we can maximise and transmit the energy that is being generated here in our state.

I need to make one further comment too. The member for Warrandyte had the temerity to call our Minister for Energy, Environment and Climate Change arrogant—from the member for Warrandyte! Let me tell you this: the Minister for Energy, Environment and Climate Change in this place is indeed a very modest person who has done more to reform the energy sector in this state, has led the national conversation, has held the incompetent federal government to account on this issue and has overseen a massive increase in the generation of power in this state. So we will not take lectures about arrogance from the member for Warrandyte—spare me.

Since we were elected back in 2014 we have been resolutely focused on providing reliable, affordable and clean energy for Victoria. Let me say this: the Victorian people have endorsed us time and time again. Of course they endorsed us at the 2018 election, but they endorse our vision every time that they apply for a solar rebate in this state. Let me tell you this: under this government we have seen 18 different projects providing over 1000 megawatts of new renewable energy become operational. We have 14 renewable energy projects currently under construction, which will provide over 2600 megawatts of renewable energy. And finally, we have a strong pipeline of projects being developed across our state, with over 4000 megawatts of new projects receiving planning approval under our government. As I said, this renewables boom has been led by this Parliament—our government, the Andrews Labor government—providing policy certainty to the market about where we are headed.

In my own electorate of course I am not going to have the time today to outline all of the amazing projects that are happening. But let me just say this: in regional Victoria we are open to new ways of doing business. I have communities that are ready, subject to the transmission system being ready, to establish and run on microgrids. Can I just tell you this: Hardwick Meatworks, thanks to some support from this government, are the largest employer in my electorate and now have the largest solar-powered microgrid in operation in the Southern Hemisphere. It was the minister at the table, the then Minister for Industry and Employment, who visited Hardwick’s with me. I have subsequently had the pleasure of taking the Premier to show him what is going on, because we are leading the way and people in regional Victoria are right up for the reform.

This is a very important bill. It does give the Victorian government the option to bring online more timely upgrades to our transmission system. We will have an alternative pathway to bring forward the investment we need in the system where the national rules fail us. The national rules are failing because they are unable to adapt to the rapid increase in generation that is happening in places like Victoria. Of course the transmission network is how we move more power around the system, and it does cover an area of approximately 227 600 square kilometres. It is a system that allows us to share power with the other states, so it is important. Demand for and supply of electricity varies greatly between states, and it is important that we have a transmission network that can move more of that power to Victoria when it is needed.

But I wanted to say this: we are not alone in what we are doing here. New South Wales is also keen to see reforms such as those that we are delivering through this bill come into effect. As the member for Warrandyte pointed out but was too afraid to name, the rules were set some 15 years ago. A lot has changed in the last 15 years.

Mr R Smith interjected.

Ms THOMAS: Yes, it was 15 years ago. You would not name that it was 15 years ago.

As Kane Thornton from the Clean Energy Council said, for the past decade the clean energy industry has been calling for reform to the flawed transmission investment model. It is now time for action. We really cannot have a model where the investment model is so far behind the generation that is happening on the ground. This bill does provide that very important option for us.

As I said, New South Wales is also seeking to amend legislation so it can prioritise projects to ensure electricity reliability and fast-track the development of renewable energy zones in its energy strategy. That would be, I might say, the New South Wales Liberal government—shows you just how far behind the complacent Liberal Party in this state is. They have no energy policy to speak of, they are beholden to—

Ms Staley: On a point of order, Acting Speaker, debating the bill is not just an opportunity to attack the opposition. I would ask you to bring the member back to debating the bill.

The ACTING SPEAKER (Ms Spence): Member for Ripon, I am happy to rule on that point of order and just ask the member to come back to the bill.

Ms THOMAS: Thank you very much. I think it is important to contrast, though, the work that is being done on this side of the house with the lack of work, thought, engagement or, dare I say, energy of those on the other side.

This is a very important bill. It is about safeguarding Victoria’s energy future. It is about setting us up for the future. Victorians are embracing renewables. The Solar Homes program is hugely popular across the state, and we need a transmission network that can deal with generation from multiple sites rather than the old model, the one that those on the other side are still stuck on.

Mr D O’BRIEN (Gippsland South) (12:00): I would like to continue in the vein of compare and contrast, and I will begin with comparing the average annual wholesale electricity price when this government came to power. In its first year in office the price was $28.83 in Victoria according to the Australian Energy Market Operator (AEMO)—$28.83. This year? In 2020 so far, $89.47. That is a 210 per cent increase in wholesale electricity prices in just the five years that this government has been in power. So if the member for Macedon wants to contrast and compare government policy on energy, we would be very happy to do so, and I am sure Victorian households would be very happy to do so as well. A 210 per cent increase since 2015 in wholesale prices, and we know why that has happened—it is because this government has messed up energy policy. We know that its taxation policies brought forward the closure of Hazelwood and sent a huge shock through the system, and that is largely one of the reasons for the increase in those wholesale prices, because we took 20-odd per cent of the state’s supply out of the system with almost no warning.

Ms Thomas: It was built in the 1960s and it was rotting.

Mr D O’BRIEN: And it was scheduled not to close until at least 2025, member for Macedon. You should go and check your facts.

This legislation that we are now dealing with is a panicked response by the government trying to fix up the mess that they have created in energy policy. We have seen that through the prices that we have experienced in Victoria over the last few years.

I might just make a comment. We hear regularly from government ministers at the table and from government backbenchers that the Solar Homes program or free TAFE has been a huge success. What a great surprise! People like free stuff! Who would have thought people would like free stuff? They like someone else paying for it. I would like some free solar panels on my roof too; that would be lovely.

Ms Thomas: They are not free.

Mr D O’BRIEN: Exactly, they are not free—taxpayers pay for them, so it is a cross-subsidy across both taxpayers and the network when it comes to the tariffs. Let us get over this suggestion that somehow there is genius on the other side that these programs are so successful. If you give people something free, you are actually firstly taking it away from someone else, and secondly, it should not be a great surprise that people will go, ‘Yeah, I’ll have some of that’.

On this legislation, I note that in the opening parts of the second-reading speech the minister talks about the crises we have had in the last few months with respect to some of the interconnectors going down. We had a problem importing electricity from New South Wales as a result of the bushfires, we had a freak storm in South Australia which shut down the connection to South Australia, and so the minister says that we need to have those connections to the national grid. We need interstate connections, and at the same time she introduces legislation to remove us from a regulatory framework for the national electricity grid. It does not make any logical sense. It is quite bizarre. For the benefit of the member for Macedon, who has now left, the speech goes on to say that:

… an Order may modify or disapply parts of the national regulatory framework …

So to say that this is not withdrawing from the key parts of the national framework is just not right. It is actually there in the minister’s second-reading speech. It goes on to say this may include:

… the regulatory investment test for transmission’ (RIT-T) …

As the member for Warrandyte pointed out, there has been a review of that, and it has been shown to be successful in ensuring that consumers are protected, that prices are kept at reasonable levels and that any investment in transmission or interconnectors or the like actually has a cost-benefit test applied. That is essentially why we are concerned about this legislation, because it throws out those tests and does not give us any confidence that any investments in the network will actually be done with a cost-benefit analysis and with the needs of consumers actually taken into account, with the exception, and I am sure someone will pull me up, that there is some sort of a safeguard. It says that the minister must consult with the transmission planner, AEMO, as well as the Premier and the Treasurer before making an order. Well, that gives us some comfort, doesn’t it! That gives us lots of comfort, given what we have seen with cost-benefit analysis and the management of major projects under this government, that she will check with the Treasurer and the Premier before making an order. I am sorry, but that does not give me much comfort. So it is of great concern.

We also see that the second-reading speech literally almost finishes with the words ‘to support the provision of affordable, clean and reliable electricity to Victorians’. I might just make a point on that. The minister and the Premier constantly have been attacking coal-fired power stations in the last couple of years as being unreliable, and I think we have reached peak irony in politics when we have got the government saying that. The alternative is solar and wind; they are basically the main renewables that we are looking at in this state as alternatives. The government is saying that coal-fired power stations are not reliable, and yet solar, obviously, gives you at best about 12 or 13 hours a day and wind has a capacity factor of about 30 per cent a day. How are any of those delivering reliable power? We have got about a 20-megawatt battery in Victoria at this stage—that is not going to help us provide reliable power. Now, I acknowledge that this legislation is partly about facilitating battery developments, and that is good, but please spare me the rhetoric that demonises the Latrobe Valley’s coal-fired power stations and says they are not reliable when the alternative is barely available 30 per cent of the time.

I just want to talk a little bit about wind in particular. I am not opposed to renewables. There are a couple of projects in my electorate that I strongly support. The proposed Star of the South offshore wind farm is in one respect also trying to improve that reliability aspect, because they believe the wind is far more reliable in Bass Strait, offshore. They think they will probably get about a 50 per cent capacity factor, so that is good. And secondly there is the Solis RE proposal, a new big solar farm in my electorate, which provides 500 megawatts with a 500 megawatt battery. I said to the developers of that, ‘Thank God someone is actually looking at providing that reliable, dispatchable power by putting in a battery as well’, so I wish them well in their endeavours.

But a little bit about wind policy. Members opposite and those members of the Greens party who sit beside me here regularly say how wonderful wind is and anyone who is against it should just deal with it, basically. In my electorate and I am sure in other country electorates they know how disruptive and how divisive wind farm developments are to a community. We have got that happening right now, at the moment, with a proposal for a wind farm at Alberton, where the community is taking the minister to VCAT given his decision to approve that particular development, and also at the existing Bald Hills wind farm in South Gippsland, where there is currently court action being taken.

To those who say, ‘This is just nimbyism; wind farms are beautiful, they’re graceful, they’re quiet, they’re lovely’, I say to them: have a look at the policy and planning guidelines for the development of wind energy facilities in Victoria. Why do I say that? Because there are specific exemptions. Section 2.1.4, ‘Exclusion of wind energy facilities in national parks, state parks and coastal parks and other high-quality environmental and landscape locations in the state’, says:

Wind energy facilities are not permitted in the following areas, in recognition of their landscape and environmental values …

Well, if they are so wonderful, why are they not permitted in these areas? Why is it that it is fine to have them on the plains of western Victoria or in the farmland of Gippsland but we cannot have them in the following places?

National Parks and other land subject to the National Parks Act 1975

Ramsar wetlands …

The Alberton wind farm is directly adjacent to a Ramsar wetland.

Yarra Valley and Dandenong ranges, Bellarine and Mornington Peninsulas, the Great Ocean Road area within five kilometres of the high water mark, and Macedon and McHarg Ranges

Ms Green interjected.

Mr D O’BRIEN: This is about the planning policy guidelines; it is not about how much wind there is. It goes on:

the land within five kilometres of the high water mark of the Bass Coast, west of Wilsons Promontory

And it goes on:

… the coast east of the urban area of Warrnambool …

These areas, coincidently, are pretty much all held by the Labor Party. The Macedon Ranges—I did not hear the member for Macedon say she does not want any wind farms in the Macedon Ranges. All these areas are excluded. So I say to those who think wind farms are fine and we should get over it: well, why does the Labor government’s own planning policy framework exclude them from those areas? They put them out somewhere else where they do not have to look at them but they can all feel good about it, and that is why I have concerns with this legislation as well. Labor has bungled energy policy. This is a panicked response to try and fix it, and it is Victorians who will pay the price.

Mr EREN (Lara) (12:10): I am delighted to be speaking on this very important bill, the National Electricity (Victoria) Amendment Bill 2020. At the outset can I say congratulations to the minister for being innovative in the way she is dealing with this very tough issue. There is no question that as the population grows and the demand increases for reliable, efficient and affordable energy we need an innovative minister and innovative government to come up with policies such as this.

Can I just take up some of the remarks of the member for Gippsland South. The Liberal Party on that side have very short memories about Jeff Kennett.

Mr D O’Brien: There it is.

Mr EREN: Well, of course. Nobody is going to deny—I do not think Jeff Kennett would deny—that he privatised the industry, and you know that. They can argue till the cows come home, but the fact of the matter is that Jeff Kennett privatised an industry which was at that time making energy affordable. Further to that, we have a federal government at the moment which is very indecisive about where it wants to head in terms of policy, direction and the industry. When you have the Prime Minister and other members of federal Parliament coming into Parliament with a lump of coal, it is not very conducive to the expectations of the wider community about not only having a reliable and affordable energy supply but also thinking about the future environment and the ramifications of how we get our supply of energy and what source we extract it from.

That is why I think it is important, and I think even the members opposite have now declared that they are partly in favour of renewable energy. They are sort of undecided as well, because they have got no leadership federally. That is why this bill will go a long way to making sure that Victoria protects itself, and rightfully so, from the indecisiveness of the policies of the federal government, who are dragging their feet on this very important issue.

There are a lot of people particularly in my area that very much depend on affordable energy. We have benefited from renewable energy in my electorate at Ford’s former manufacturing site. I will get to that in a moment in terms of having some manufacturing jobs available going forward and in terms of renewable energy. But before I do I just want to make sure that it is abundantly clear that this government has had a mandate on two occasions, both in 2014 and in 2018, that the community out there trust it with its policies going forward in terms of protecting this state and doing whatever it takes to protect this state from some of those indecisive decisions that are being made both federally and in other parts of the nation. We have got to do it. One of the reasons why we are the strongest economy in the nation and one of the reasons why we have the fastest growing population anywhere in the country is that Victoria is really a great place to live, work and raise a family. We have got to protect that very good reputation that we have, and that is why this bill goes a long way to making sure that we do that.

This bill will amend the National Electricity (Victoria) Act 2005 to allow the Victorian government to bring online more timely upgrades to Victoria’s transmission system. This will mean we have an alternative pathway to bring forward the investments we need in the transmission system where the national rules fail us, cutting through red tape and fast-tracking urgent investment like grid-scale batteries and transmission upgrades. If we do not do this going forward, then we are going to have a lot of problems, because as we know the Yallourn power station—and this is privately owned, of course—has made it abundantly clear that by 2029 it is going to wind back its operations.

Mr D O’Brien: By 2032.

Mr EREN: Well, 2029 to 2032—yes, that is right. The member for Gippsland South knows this. So if we do not have policies to safeguard our state going forward, then we are going to be in a lot of trouble. That is why the people voted for us at the last election—because they understood the important decisions that needed to be made. I am sure that if that other lot were in government, they would not dare stand up to the federal government. They would kowtow to them. They would try to work around it, but in the end they would submit to their masters in the federal government and would not look after the interests of the Victorian community, and that would be an absolute shame.

Just in relation to what I mentioned earlier, in the short time that I have available to me, we obviously have taken decisive action in terms of our policies relating to energy. The Andrews Labor government has shown decisive leadership and has encouraged unprecedented investment in the renewable energy sector in Victoria and in reducing our greenhouse gas emissions from electricity generation. As I have indicated, you need policies that basically drive the industry to invest in Victoria rather than the other way around in terms of investing in technologies that are going to be obsolete in a number of years time. We want to be the leaders in this area so that we can attract those investments and jobs that are required going forward.

Since the Andrews Labor government was elected in 2014, 18 different projects, providing over 1000 megawatts of new renewable energy capacity, have become operational. We also have 14 renewable energy projects currently under construction or undergoing commissioning which will provide over 2600 megawatts of renewable energy once they are complete. Finally, we have a strong pipeline of projects being developed across our state, with over 4000 megawatts of new projects receiving planning approval under our government.

This renewables boom has been driven by our strong renewable energy targets, which we recently increased to 50 per cent by 2030. This new target will create over 24 400 jobs in Victoria and utilise a supply chain that has grown across Victoria. These projects have delivered significant benefits across Victoria. For example, the Vestas Renewable Energy Hub came about as a result of the Victorian renewable energy target reverse auctions that we have in this state. The hub will be based in the old Ford factory site at Geelong and will involve investment of approximately $3.5 million and directly employ over 20 employees. The project will train hundreds of local staff in wind turbine maintenance and see wind turbine component assembly in Australia for the first time in over 10 years.

The Andrews government is also putting power stations on the roofs of Victorian homes through the Solar Homes program, which will see solar panels, solar hot water and solar batteries rolled out to 770 000 Victorian households over the next 10 years. The member for Gippsland South made comment about free TAFE and subsidies in the Solar Homes program that we have. Is that an indication that potentially going forward as a future government they will cut these subsidies to future Victorians wanting to take advantage?

Mr D O’Brien interjected.

Mr EREN: We know what you said, mate. You made it abundantly clear that people do not like it, which you were wrong about. You are either declaring that you are going to cut the funding if you come into government or you do not know what you are talking about and you are confusing yourself and others.

By and large, with these policies that we have going forward, Victorians have trusted us as a government in terms of making these very important decisions, and we will continue our record in terms of providing reliable, affordable and clean energy for Victorians. Since we were elected in 2014 we have been resolutely focused on providing reliable, affordable and clean energy for Victorians, and we will continue to do that. We have introduced major reforms to make energy fairer. We have slashed standing offers through the Victorian default offer and made it easier to find a better deal through Victorian Energy Compare.

We have done many things in this area, and obviously the Victorian communities will benefit tremendously as a result of this bill that is before the house. We have occasions of hot weather when we have more demand on our energy services. New South Wales may not, for example, have hot weather like we do, and there needs to be system. I think New South Wales is pragmatic enough to understand that we need to share some of this energy resource that we have according to demand, and vice versa. If we need to purchase something off them and they need to purchase off us in times of need, that is exactly what this bill is intended to do. It is about our state’s interest going forward, it is about making sure that we have reliable, energy-efficient and affordable policies so Victorians continue to live in the best state in the nation.

I congratulate the minister and I congratulate the government on bringing such a bill before the house. There is no question that we on this side of the house have been listening to the wider community in terms of the needs and expectations of Victorians going forward. They have entrusted us over two elections to take Victoria in a positive direction. I commend the bill to the house and wish it a speedy passage.

Ms McLEISH (Eildon) (12:20): It staggers me to hear members opposite talk about their energy policies, their focus, how successful they have been and why they are doing so great. I have to make comments on the member for Lara, who said the focus is on reliable, affordable and clean energy. He is certainly very wrong. We have had terrible reliability and we have unacceptably high prices.

One of my favourite apps actually, which many people in this chamber do have, is the PocketNEM, which gives you a little snapshot at each moment in time of the prices of power all around the country, and you can see also where that is coming from. We can see at the minute—gosh, no surprise. Which state has the highest power price? Well, that would be Victoria. And where is it getting its power from? Well, it is getting it from the other states—from the cheaper places in Queensland, New South Wales and coming up from Tasmania. There are little bits going over to South Australia because they have had some disastrous energy problems from the previous government and that has put them behind the eight ball a little bit. But it really does stagger me to hear those sorts of comments.

What PocketNEM also shows you is the generation, whether it is wind, gas, hydro or coal. It gives you an indication of what is kicking in when. It is interesting to note that there is a small hydro in Victoria, in my electorate in Eildon in Rubicon. When the price is really high on those stinking hot days the energy companies get in on it and make an absolute killing when that price is particularly high.

We have had constant outages and higher prices, as we have heard from the member for Gippsland South, who mentioned the wholesale electricity prices. In 2015 the average price, when Labor came into power, was $28.83, considerably lower than what it is now at $89.47 for 2020—a 200 per cent increase. But let us have a think about 2019, where it was up to about $110 as the average. So they are not doing well in terms of power pricing at all.

The bill before us is about modifying the regulatory framework that applies to changes and to upgrades to different services and the declared transmission system operator, or the Australian Energy Market Operator (AEMO), and the transmission network. One of the things that concerns me greatly is that this gives the minister the power to bypass regulatory requirements as outlined in the National Electricity Law and National Electricity Rules in relation to any augmentations or upgrades of, in Victoria, our transmission network and in particular the regulatory investment test for transmission.

I am greatly concerned when a government moves to bypass processes and requirements, which really works against any transparency. We saw the efforts today in question time, where the government did not want to be accountable for a lot of their dodgy dealings and tried to answer minimally. We see again processes here now being put in place to actually help them be less accountable. It is something that I think as Victorians we should absolutely be concerned about.

This bill, with the bypassing of regulatory requirements, removes the requirement for a competitive tender process; a cost-benefit analysis; oversight of the resultant cost recovery charges which flow through to the consumer—so where it hits people at the end of the day; and a regulatory impact statement. I find that, as I said, particularly concerning. We know it also allows the minister to make a minister’s order to override existing contracts and agreements in relation to augmentations. Now, those contracts and agreements would have been put forward in good faith, and now we are seeing this absolutely fly in the face of anything that is existing. But we know how the Labor government treats contracts: they are not worth the paper they are written on and they are happy to throw away a billion dollars because they do not get it. This allows the minister to order AEMO to undertake or choose not to undertake a particular action in relation to the transmission network augmentation and to specify the terms in which AEMO enters agreements.

One of the things to consider with the power industry in Victoria is it has been centralised out of the Latrobe Valley for decades and decades. It radiates radial patterns from Latrobe Valley. We have moved now to having different sources of energy and being located in different parts of the state. It means that the system should have been upgraded to a point that we could actually cope with bringing that power that is produced on, but at the moment that is not the case and there needs to be an enormous investment into the transmission of power from these newer resources.

I think that the government somehow seems to think that those on this side are opposed to different forms of energy, particularly wind or solar. I am off the grid, and I do not know that anybody on the government benches lives off the grid. It is not difficult to do. I rely 100 per cent on solar power, and it can be done quite easily. I would say that I am a big supporter of renewable energies. I do not have a backup; we are not connected in any way to the grid, so we do not produce and then sell it, push it into the grid at times of higher demand. That is not open to us, but we are certainly independent. I strongly believe we do need cheap sources of energy, because we have families out there and—looking at the prices now and businesses—some of these changes in pricing have put people out of business. We do not want to see people put out of business.

In my electorate we have had so many problems, more recently in Alexandra and Mansfield. Businesses and families have been hit seven or eight times with long power outages—power outages that they have been unable to work out the cause of. There has been very little from the distributor. I am pleased to say that the distributor did come onto local radio at my prompting recently to talk through some of those issues so people did understand what was happening. Healesville and Warburton have experienced many, many hours of power outages. For businesses that rely on fresh produce—they might have dairy, they might have meat, they might have products in an oven and the oven goes off—that produce is lost. When you are a small business operator this hits hard. You lose what you have got and you cannot run your shop. I know a lot of small businesses now have small generators which allow them to keep their refrigerators going. They have all been forced into buying generators because of the lack of reliability of power that we have in this state at the minute, but it means they do not lose as much product. Some of them are working with businesses next door. They cannot operate their tills, they cannot keep the lights on and they have to send staff home. If those staff are permanent staff they are paying, it really hits them in the back pocket very hard.

I find it staggering to hear that those opposite really think that they are leading the way in energy, because if you talk to people on the ground, the high prices and the lack of reliability are just not doing it for them. I am also concerned about the lack of consultation with the industry groups. They believe, far and wide, that the removal of an established regulatory framework, which has been reviewed to confirm its effectiveness, will result in higher prices for the Victorian consumer. We have already seen that wholesale price go up quite significantly under the Labor government, and these changes threaten to increase those further.

But I guess this is typical of the Labor government’s lack of regard for businesses, and in particular small businesses, that get hit. They are the ones that do not have the backup generators to really keep them going for 12 hours or more. I am also extremely concerned, as I have mentioned, about absolving the minister of the need for regulatory impact statements, business cases or competitive tenders for infrastructure investments. This is of significant worth. The government are very poor with infrastructure development in terms of managing these projects to come in on time; it is something that they do not do very well at all. When we got to government we had to fix up all of your botched systems. We fixed plenty of them, and you did not even build the— (Time expired)

Ms CONNOLLY (Tarneit) (12:30): I rise with absolute pleasure to speak on the National Electricity (Victoria) Amendment Bill 2020. That is because before becoming the member for Tarneit I did something a little bit different. I spent over a decade working across this country on electricity regulation and policy reform, and I will say straight up: this bill is going to be a game changer for this state and the future of Victorians and our environment, which I note that side of the house has failed to talk about. It makes me laugh, and I will start. I do not often laugh in this chamber at some of the contributions that are made by those opposite, but I will start by saying that it did make me laugh listening to the contribution of the member for Warrandyte talking about the need to plan properly for the future and his comments around efficiency and making the tough decisions governments in power need to make around new generation coming into the grid.

What is most hilarious is that the only benefit he seems to see in renewable technology is that they make good announcements. They look really good in a media announcement. I think that in itself says it all about what that side of the house think about renewable technology. But none of us on this side seem surprised. But of course you would only be seeing that, because it is your team in Canberra that has created so much uncertainty in this country, in this market, that you have stifled it. For years and years your mates in Canberra have refused to do anything. The one Prime Minister that you guys had that gave the industry a glimmer of hope that common sense might prevail to move past the inertia that your crew has paralysed this country with, you got rid of him. You replaced him with someone who lives in a fantasy world. So for the member for Warrandyte to stand here and try to lecture us on planning, on certainty, on efficiency and, dare I say it, a world in which renewable technology exists and produces clean energy is absolutely ridiculous. I say to the member for Warrandyte—and I put my hand on my heart—let us hope that the closest you ever get to shaping the energy policy of the state is with the audacious contribution that you have just made in this place. Reach over and switch on the light closest to you, because it is time to wake up and see that we are in the next decade—it is 2020.

Since our government was elected in 2014 we have been absolutely resolute in our determination to provide reliable, affordable and clean energy for all Victorians. We have listened to people; we have listened to them from far and wide. We have heard loud and clear that the need to introduce reforms to make energy fairer is what our communities want, and that is exactly what we have done over the past five years. We have introduced major reforms to make energy fairer. We have slashed standing offers through the Victorian default offer, and we have made it easier to find a better deal through National Electricity Law, a website that we know thousands and thousands of Victorians are using to get better deals to reduce their energy bills.

We have worked tirelessly with our private generators to make sure they are available when we need them most, we have pushed for new rules to allow the energy market operator to find cheaper, more reliable sources of emergency supply, and of course, a personal favourite of mine, we have supercharged the deployment of renewable energy right across our great state.

I was recently having a conversation with colleagues reflecting on just how complicated our energy law and regulatory frameworks really are. Yes, they are sentiments I absolutely agree with, because I have been listening to those kinds of remarks for over 13 years. This is exactly what communities right across Victoria and our nation also think about the way in which energy in this country is regulated. The National Electricity Law and the rules are an absolute beast of legislation and regulatory framework to get your head around, which is maybe why those opposite can never seem to get their heads around them without reading the notes that they seem pinned to in this place..

But if we put aside those complexities, it is important to remember that this bill comes about after a long observation of Victoria’s energy supply, particularly over the past year. In 2019 we saw how strained our energy grid can be during the summer period, and it is only getting worse—it is definitely getting worse—which is exactly why we are making these legislative amendments. Most recently, the bushfire season caused major disruptions to our energy grid. These bushfires have reinforced the need to make our energy system more secure and more reliable to accommodate the changing face of summer.

I am sure we can all remember the end of January last year, when we had significant blackouts—and, I remind those opposite—in the middle of hot weather days. What we know is that those power failures were coming from coal-powered energy generators, and it was our investments in renewable energy that came through for us. This is not a matter of saying that coal-fired generators are bad, let us get rid of them. This is saying that, yes, we use them, but they were not able to be used in the middle of a bushfire emergency, and renewable energy came through for us.

Climate change is a very, very real and very serious threat to Australia’s energy system and the industry. In my job before coming here I saw exactly how year after year the ‘hottest year on record’ impacted the sector’s ability to transmit electricity to consumers, to customers, right across Victoria. It is becoming clear that our energy supply is becoming more and more outdated.

Anyone that comes from the energy sector will agree that the pace of renewable technology has picked up. In fact it has been ramping up for years and years, and the advancements we are seeing in this innovative space are now outstripping the ability for the legislative reform processes to keep up. What we see in the sector today is renewable energy generators pumping out clean energy across our state, and it is not shocking to know that there are many, many more developers eager to build and get involved in these new and emerging markets. We have major investments in grid-scale batteries, energy efficiency and household solar power that are transforming the way in which households use their power.

It is pretty interesting for me because it does not feel like a long time ago, although I reflect now that it probably is, that I was sitting around a table with electricity engineers having a very passionate debate over lunch about the rollout and the uptake of solar panels in every home across our country, and about electric vehicles. Would they be popular? What would the uptake be like? What would the price tipping point be? I say that these engineers were passionate because, bless them, electricity engineers are some of the most passionate and focused individuals I have ever worked alongside. If you give them a problem, they solve it—absolute legends that they are. Many of them have now retired, and it is incredible to think that the future that we once talked about has suddenly arrived, and we are now looking to see what is next on the horizon.

It is important to understand that progress in the renewables sector relies on a robust transmission grid that is evolving to meet the demands of the energy system and is able to efficiently move electricity from where it is produced to where it is needed. That sounds really simple. Well, it should be, but unfortunately we are increasingly experiencing the national electricity framework letting us down. Investment in the transmission grid is just too slow, the process is too narrow and the best interests of Victorians are too often forgotten.

Let me say it straight: as leaders of this state we cannot continue to sit by and do nothing while we face such extraordinary challenges that come our way. We know that the simple truth is that the national regulatory framework for approval of transmission upgrades has too often proved itself not to be fit for purpose. Back in the day when I was a senior regulatory analyst, I spent years writing policy submissions lobbying for reform of our national framework. As the world of renewables started to grow here in Australia, that became harder and harder, because changes to the National Electricity Rules, the laws and regulations took years. They simply were never originally drafted for today’s market and technology.

This bill is going to change that. This bill is going to shake things up. We are not going to be relying in certain circumstances on the regulatory investment test for transmission. It is an incredibly complicated test. It takes a long time to get through. There are a lot of hurdles to get through. It is a lot more complex than those opposite pretend that it actually is. This bill amends the National Electricity (Victoria) Act 2005 to allow the Victorian government to bring online more timely upgrades to Victoria’s transmission system. I wholeheartedly commend this bill to the house.

Ms STALEY (Ripon) (12:40): I rise to speak on the National Electricity (Victoria) Amendment Bill 2020. I begin by thanking the departmental staff who provided the bill briefing, which I and the member for Warrandyte attended. They were very clear and very patient in explaining the relationships between the National Electricity Law (NEL), the National Electricity Rules (NER), the regulatory investment test for transmission (RIT-T) and the multiple other acronyms that populate the energy sector, and I do thank them for the clarity of their briefing.

As the lead speaker from the Liberal-Nationals coalition, the member for Warrandyte, has said, we will be opposing this bill. We oppose this bill because this is yet another Labor bill to raise power prices, and we just do not support that. We support lower prices. We support a proper test for increasing the grid’s capacity. The reason we have this bill is that the government has charged headlong into the renewables space without proper planning to add grid capacity. And then because that does take some time—and I will be speaking about some of these tests that we do not think should be removed but that this bill does remove—they end up with a situation which we have in my electorate now, where the Bulgana green power hub, a project that the minister and the Premier have visited on more than one occasion and spruiked in many, many fora, is designed to deliver some power locally to a glasshouse project that actually has not started, but most of its power goes into the grid. So 90 per cent of its 194 megawatts per hour is meant to go into the grid.

Now it is finished—all the wind towers are built, everything there is ready to go. That project is not attached to the grid because there is insufficient transmission capacity in western Victoria for that project, which Labor has spruiked at all opportunities, to attach to the grid. That is because they have not planned properly. We have had a massive, headlong rush into renewables, which I agree completely changes how transmission works in Victoria. Traditionally if you have got all of your power coming from the Latrobe Valley, you have all of your transmission lines coming out of the Latrobe Valley and going west. If you have got all of your power now distributed, you need distributed transmission. But the way you get distributed transmission that does not disadvantage consumers is to make sure that the tests to augment the grid are properly followed.

What this bill does in clause 4 is remove the need for the Australian Energy Market Operator to undertake the expansion of the grid. When AEMO does it, it has to apply the RIT-T. The RIT-T has a number of provisions within it. Other speakers on both sides of this house have explained the provisions of the RIT-T, but the one that I want to talk about is the cost-benefit test that is embedded within the RIT-T. It requires any augmentation processes done under that test to meet the best cost benefit. It is a very rigorous test, and it has a number of ways in which the consumer, who ends up paying for augmentation of the grid, can be assured that the lowest cost and most effective augmentation is undertaken.

But what this bill does is say there can be an alternative regulatory investment test, and that alternative regulatory investment test can be anything. We specifically asked at the briefing if it meant that there did not need to be any test at all, and that was confirmed. The entire test that AEMO implements makes sure that when it goes to market to get an increase in capacity in the grid it is at the lowest cost, because those costs are passed on to consumers, and I will come to that in a moment. That is the purpose: the lowest cost and the most effective. This bill removes that test. It is clearly saying that the government can now prescribe anything under this bill that is an augmentation of the network and it does not need to be a cost-effective project. That matters because if we look again at clause 4, the bill provides:

… that augmentation related costs or non-network services costs may be recovered through charges for services specified in the Order …

That means they can be recovered from the consumer. So on the one hand we have got a bill that is removing any test to make sure that there is a lowest cost augmentation of the grid and at the same time it can impose those additional charges on consumers. That is why I say this is yet another way that the Labor government will increase power bills in Victoria.

It is not sensible to get rid of the RIT-T. In fact the minister knows this because the minister was on a national panel to inquire into the efficacy of the RIT-T, and that inquiry came back with support for the RIT-T. It found that it was the best way to create augmentation of the grid. We agree there needs to be change to the grid as we move to renewables, but the RIT-T is the way to do it, and this bill removes that. The minister cannot argue that she has a better way to do it because she was on that panel, she was on that national inquiry.

There is one other part of clause 4, and that is new section 16ZH. What new section 16ZH does is say that if the minister does anything that she would not be allowed to do now but she will be allowed to do if this legislation passes, then that is okay, that is all right. What it says is anything that is done is all right; the minister is taken to have complied with the requirement to do the preparatory step. This is a truly extraordinary clause. We asked about it in the briefing, and we were advised that it is not a normal clause in any way, shape or form. What that clause does is completely pre-empt the Parliament’s role in passing legislation. That kind of clause should not be a part of any legislation, because the primacy of the Parliament, the point of the Parliament, is that the government—or others, but given the government has the numbers, it is the government—brings their legislation to the Parliament, and the Parliament decides if that legislation is worthy of support. They should not embed in their legislation a provision that allows the minister to act before it goes through the Parliament, yet that is what this clause does.

For these reasons, this bill is heavily flawed. It will end up increasing power prices. The government have asserted that AEMO’s actions are slow, but they have not provided any evidence for that—it is simply an assertion. I think if you are going to rip away the entire regulatory structure for transmission augmentation, then you really do need to explain why it is that you think, as a government, that you have a better way of regulating when all the experts have said the RIT-T is the best way to regulate augmentation.

Mr Dimopoulos interjected.

Ms STALEY: I note the member for Oakleigh has now fired up because clearly he does not like what I am saying. I cannot help that I am telling the truth here. I just cannot help that you do not like the truth, that once again you are finding a way to go past the experts and increase costs into the grid. You have no care for that because you did not plan properly. The government did not plan properly when they went with their renewables options and got additional renewable power. They need that in the grid, the grid cannot do it and so they are playing catch-up with this bill, which will increase costs to consumers. There is no question that this bill will mean increased costs to consumers, and that is why we oppose it.

Mr PEARSON (Essendon) (12:50): Well, I am glad that is over. If that is the start-up act for the matter of public importance this afternoon, we are all in for an entertaining afternoon. What a desultory contribution from the member for Ripon. Let us just unpick this a little bit. I think the key contention was that the government has rushed headlong into renewables and that is a bad thing. So let us just think about that for a moment. Let us suppose we had not done this. Let us suppose we had not supported the introduction of renewables into the state of Victoria. What would have happened? You are not going to have an owner of an asset like Hazelwood investing hundreds of millions of dollars in an asset that is built on technology for the 1950s. You would have had a situation where the owners of that asset would have said, ‘We’re shutting up shop. We’re out. We’re decommissioning this asset. We’re leaving Victoria’, and we would have had a loss of 1000 megawatts in baseload capacity to our grid straightaway.

The reality is that there have been a number of factors at play in relation to energy policy over the last probably 20 years, once the full rollout of full retail contestability has occurred. We have seen the emergence of renewables technology, and they have moved rapidly, but there have been challenges with their introduction because of their variability and the fact that they can put a lot of power into the grid for short periods of time and then potentially not put anything in. You also had a set of circumstances—and I would have thought the member for Ripon might have been a little bit more mindful and sensitive of this—of just the devastating impact that the bushfires have had on our community in recent weeks.

I do not think for a moment any of us thought that we would have experienced those bushfires in the way in which we did. I have always believed in the science. I have always believed that climate change was a reality. In the back of my mind—and I am probably not different to many others—I thought that we needed to start making changes and we needed to move to a low-carbon future. But I thought we had more time up our sleeves. I think what has happened over the last few weeks has been that stark realisation that we need to do more and we need to act more swiftly and more quickly—

Mr Richardson interjected.

Mr PEARSON: And we do not have time. Given the member for Ripon is a devotee of the Institute of Public Affairs, I would have thought that she might read the Australian Financial Review regularly. She may do, she may not, but I would draw the member’s attention to an opinion piece by Adrian Blundell-Wignall of 25 February this year. What Blundell-Wignall wrote was the fact that Australia produces 1.3 per cent of global carbon emissions. You look at that from one point of view and think, ‘Oh, 1.3 per cent. Well, we’ve got probably less than 1 per cent of the population—not great but, you know, 1.3 per cent is not terribly bad’. What Blundell-Wignall quoted though was insurance data by Munich Re, which found that for the Oceania region—and bear in mind that is Australia, New Zealand and the Pacific islands, and we would be the problem child of the Oceania group when it comes to carbon emissions—we are responsible for 5.9 per cent of global loss events related to climate change. So Australia is producing 1.3 per cent of carbon emissions, but we are responsible for 5.9 per cent of the claims globally for global loss events related to climate change.

Just think about that for a moment. What does that mean? What is that going to mean for, say, regional communities and rural communities if down the track your insurance company says, ‘You know what? I’m not going to insure you because your government has not taken responsibility in relation to climate change emissions; you’re responsible for a disproportionate volume of climate change emissions, and moreover you are operating a business in an area that is prone to bushfires’, or flooding or other sorts of global loss events related to climate change? What will that do? What will that do to our economy? What will that do to those communities?

Again I just come back to what we saw in recent weeks: just the fact that you had firefighters, who had been fighting fires and defending our communities for decades, coming out of that firestorm and saying, ‘We’ve never seen anything like that’. It is not like it is someone who is from the CFA who is fighting their first fire has come home and said, ‘I haven’t seen anything like that before’. We are talking about seasoned firefighters who have been on the front line on firegrounds for decades coming away and saying, ‘That’s something we haven’t seen. We don’t how to respond’.

Mr Riordan: So you want to increase power prices to combat that?

Mr PEARSON: I take up the interjection from the member for Polwarth. What we have to do is we have to face up to reality and we have to recognise that we have a global responsibility and an obligation to reduce our carbon emissions. You can spend the rest of your days driving your EH Holden until the thing falls apart. We want a brand-new Tesla. That is what I want. I want a new car that produces zero carbon emissions so we can per be part of a vibrant, dynamic global economy.

Mr Riordan interjected.

Mr PEARSON: Mate, you are stuck in some figment of your imagination from the 1960s. That is what you are.

The ACTING SPEAKER (Ms Ward): Through the Chair, member for Essendon.

Mr PEARSON: It is back to the future; back to the future for you, bud.

A bill like this is really important because we need to make sure that we have got those transmission lines updated and upgraded to be able to deal with these challenges. Now, again, you go back—

Mr Riordan interjected.

Mr PEARSON: I have got to say, Acting Speaker Ward, the member for Polwarth has done something I did not think was possible before lunch: he has actually made the member for Ripon sound like she spoke a lot of sense—extraordinary! Bravo, comrade, bravo.

If you think about it, historically we had baseload coal-fired power to provide that level of distributor power right across the state, and it was a steady flow of power that was baseload power. It was augmented by gas-fired peaking plants or potentially hydro that would come on stream to deal with high events from time to time. Therefore in terms of the quality of the infrastructure it was at a different level. The member for Ripon was right; you would have that situation where most of the assets that were producing energy were down in our Latrobe Valley because we had a low cost for brown coal. It was a relatively low price compared to other forms of energy that were used in other jurisdictions. Indeed that formed the basis of the fact that we had a very strong manufacturing system here in Victoria for many years.

What has changed and what has happened as those baseload coal-fired assets have been retired and replaced is that that is causing that level of variability and those surges across powerlines and that power infrastructure to deal with those sudden changes. It is a dynamic environment, and it is a very challenging time for many people down in the valley and in many communities. But we cannot have a situation where we do not act. We cannot have a situation where we end up having these communities being left behind because they are working with outdated and ageing infrastructure that has really no place in a global economy in the 21st century.

Some of those assets are going to be there for a while. I would expect that you would probably find that in the medium term Loy Yang A and Loy Yang B, as the last two completed baseload coal-fired power stations, will continue to operate for the foreseeable future. You would not quite know when exactly, but we do need to make sure—

Ms Staley interjected.

Mr PEARSON: I will take up the interjection. The point I am making, member for Ripon, is that Loy Yang A and Loy Yang B are two baseload units producing over 1000 megawatts each, and both were completed in the late 1980s and early 90s and are therefore newer. You would expect that because they are newer they would be retired last. That would just be my guess. I could be wrong, but that would be my guess. But we need to make sure that we provide the right regulatory framework to enable these sorts of assets to operate into the future. This is an important bill, and I commend the bill to the house.

Sitting suspended 1.00 pm until 2.01 pm.

Business interrupted under sessional orders.