MATTERS OF PUBLIC IMPORTANCE
Mr BIRRELL (Nicholls) (16:12): Thank you, Member for Adelaide—I'll try and flesh a bit of that out about energy prices and manufacturing in my presentation. Industry is struggling across Australia, and those of us who have industry in our electorate and go and talk to industries have been told that. Not only are they worried about what is happening now; they're worried about what's going to happen in the future.
I'll briefly touch on the very important agricultural industries in my part of the world and across the Murray-Darling Basin that have some real headwinds, because one of their major inputs is irrigation water, and, in the last term of government, the then minister for environment decided that the government would buy a significant proportion of that irrigation water back.
Economics 101 is that, when you take something away from what we call a consumptive pool, everything that's left in that consumptive pool gets much more expensive, so those businesses are going to find it harder to buy the irrigation water that they need. That's going to make their businesses less viable, and I predict it will push up food prices for Australian people.
Agriculturalists in the Goulburn Valley need access to affordable and reliable irrigation water. Manufacturing needs energy, and it needs it to be affordable and reliable. As previous speakers on this side have said, there have been recent bailouts in Whyalla, Nyrstar and Glencore, because energy has not been affordable and has not been reliable.
Why is that? Well, the answer to where we're going with this comes from a report by the Centre for Independent Studies that I suggest everyone in this parliament read called The renewable energy honeymoon:starting is easy, the rest is hard. It explains the fact that a certain amount of intermittent energy or solar and wind in a grid can be very good.
Thirty per cent, roughly, is what they say. Thirty per cent of renewable intermittent energy in a grid can be quite successful. The people who have what I call 'energy illiteracy' say, 'If 30 per cent is good, 60 per cent must be better, and 90 per cent must be unbelievably good.' I think they've settled on 82.
But what this report points out is that the intermittent energy is a very different type of energy in a grid to what we call the baseload generation, which can come from hydro, gas, coal or nuclear. As the penetration of intermittent solar and wind energy gets further into the grid, above 30, up around 50 or 60—and if it ends up at 82 per cent—this report shows that energy becomes much more expensive and less reliable.
They're explaining this because of the way that energy works in the grid, and they're also giving some examples from around the world of people who have tried this. They talk about Spain—they talk about the Iberian blackout that was caused by having too much intermittent power in the grid, causing it to shut down. They talk about Germany, which is going through a de-industrialisation because it relied too much on renewable energy.
They talk about Denmark and they talk about California, which have higher energy prices—higher electricity prices. What we're worried about on this side is that, if we ignore this sort of expert advice that explains how the grid works and we continue on with renewable energy up to the point of 82 per cent in the grid, we are going to have a similar price hike and the unreliability that these other countries have experienced.
And, unlike Spain, we do not have a neighbour like France with nuclear energy generation to bail us out, which is what they've done. And Denmark has done the same thing in relation to Norway, which is a neighbour that has hydroelectricity. I just ask everyone: bone up on your literacy when it comes to energy policy.
I was actually doing an interview from an apple orchard and I was debating. The member for Warringah said baseload power is an 'antiquated' notion and 'a thing of the past'. And I said, 'These apples—when they get picked, how are they going to be refrigerated if baseload power is an antiquated notion and a thing of the past?' And, sadly, I don't think she's alone in her illiteracy about how the energy grid works when it comes to manufacturing.
We need reliable and affordable power to keep industry and keep manufacturing in Australia.