Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025

Senator DOWLING (Tasmania) (18:50): I rise today in strong support of the Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025, and that's specifically what we're here to discuss. We can all reflect on where the energy debate has gone globally and in Australia and where it will head in a trajectory towards our net zero commitments and also in meeting the classic trilemma of affordable, reliable and clean.

That is the challenge that the government's broad energy settings are focused on, and that is informed by, as Malcolm Turnbull used to say, engineering and economics. That is a great way to approach this challenge that we have, and, in fact, that's exactly what the AEMO system plan seeks to do. Their Integrated System Plan shows that we do have a challenge to replace our ageing coal fleet in Australia.

That cannot be denied. As much as we'd like to live in the past, on the other side of politics, we need to focus on the future. While it's fine to diagnose problems, we actually need to ask, 'How do we address that fundamental challenge of replacing that ageing coal fleet that has served us very well historically but is not the answer to our future energy transition and the challenges and opportunities that go with that?' The Integrated System Plan clearly showed that replacing those coal plants with a mix of renewables plus storage and investment in transmission so we can actually put the renewables where the renewable assets are, where the wind blows hardest and the sun shines brightest, and connect that up with the transmission—that's part of the Rewiring the Nation agenda—is the lowest cost way.

Those three points—renewables, storage and transmission investment—are the lowest cost way to supply electricity to homes and businesses while reaching net zero. If there's another plan out there, I'd love to hear it because, as I said, this debate should be informed by engineering and economics. Let's have that discussion.

But that is the Integrated System Plan that's been put out. The Productivity Commission also looked at this issue, and its interim report, Investing in cheaper, cleaner energy and the net zero transformation, explicitly looked at this challenge around how we reduce costs in the electricity, heavy industry and transport sectors while making that compatible with the net zero goal.

Similarly, they found that a mix of renewables, storage and transmission is the way to go, and that's where technology and investment is focused globally. I know people like to talk about outliers, but the overwhelming global community and global economy are focused on those issues, because it's not just about environmentalism; it's also how we give a future for our industry and remain economically competitive with the lowest cost clean energy available, and that's the recipe to do it—those three.

I speak to this issue not only as a senator representing Tasmania but also as someone who has an economic background and has looked at this issue and how technology, policy and economics intersect. Certainly, from a Tasmanian perspective, that piece about energy reliability, equity and productivity—they're inseparable from Tasmania, most parts of Australia and our long-term prosperity.

If we actually just get to the specifics of what this bill proposes, it establishes the Australian Energy Regulator as a standalone Commonwealth entity. Why is that important? It makes it distinct and autonomous from the ACCC, which has some very important functions, but the AER has really outgrown the ACCC, and it does merit its own statutory body separate from the ACCC.

What it will do is endow it with its own governance structure, staffing autonomy, funding mechanisms and accountability framework. This matters because the AER oversees the energy market, which, as I've just outlined, is now one of the most complex and dynamic systems in Australia. The energy market is evolving so rapidly and the technology is changing so swiftly.

It's subject to so many shifting sands—global, geopolitical, economic, industrial and household bills. This is something that you really need a specialist regulator to develop the expertise and the muscle for so that they can look at these issues long term. Having a separate AER that will understand that profound transformation across the country is important, and that's the objective of the bill.

I see that transformation happening in my home state. Obviously, Tasmania leads the nation in this space. We've been looking at renewables for a long time through our proud hydro industrialisation.

It has served our economy very well, and 100 per cent is not where we're at. We're focused on 200 per cent renewables, and we're going to get there. We're going to do it in a way that delivers reliable electricity like we always have, and we're going to do it in a way that helps make a contribution to the national economy through both the existing Basslink and the now commissioned Marinus Link.

This allows Tasmania to make a contribution to the NEM, the national electricity market, by producing at different times. When the nation is in need of excess power, we're able to unlock the hydro dams and provide a contribution to the nation to keep the economies running. That's why we need to be building our transmission, which unlocks the investment in renewables as quickly as possible.

And that's something you're seeing across the globe. The race to provide more electricity generation is on, and we need to be part of it. It's a big part of what you're seeing around the other great shift going on at the moment, which is artificial intelligence, and making sure that we have the power to supply the huge needs of data centres globally.

The sustainability of the energy supply is a huge part of what the investors with mandates to invest in data centres look at, so we need to make sure that we set up an energy system that supplies our technology sectors in a way that will make them sustainable so investors will continue to invest in those sectors. That means looking at the bottom line to make sure that the source of their power is actually sustainable, not just affordable.

That is something that's on, but the history of economic development is that the more electricity generation and the higher the energy intensity in the economy—you've seen the rapid growth. We want to continue to see energy generation, because that largely means we're investing in economic activity, and that's a good thing. Under the current structure, the limitation of the AER is that it's beholden to the ACCC for staffing, budgeting and operational prioritisation.

I think this is self-evidently a structural impediment to the performance, agility and innovation that our energy market needs at this time. You could make the analogy that it's akin to a modern tech startup being asked to operate under the governance of some traditional corporate hierarchy. It just doesn't work.

We don't want a result which brings slower decisions, a diluted focus and a regulator that's ill-positioned for the scale of the economic challenges ahead. This bill gives effect to what's been looked at through several independent reviews in this space and is also subject to multiple interjurisdictional ministers looking into the same issue. They've all come to the same conclusion that we do need this separation between the entities.

So, in considering this bill, let's recall some of the strong governance reform pathways set by three of the reviews. The first review is the 2015 Vertigan review, which found that, while our energy market institutions are broadly sound, the AER lacked the autonomy to meet future challenges. It recommended full management and financial independence from the ACCC, control over its own staff and resources and clear institutional separation while retaining cooperative links where beneficial.

Mike Vertigan, I should say, is a proud former Tasmanian secretary of the treasury. Another Tasmanian who has had a great input into this was Rhys Edwards, who did a review of the Energy Security Board in 2020, which again underscored the importance of clear, accountable governance. His review recommended a streamlined structure and stronger institutional clarity once the Energy Security Board's transitional role had ended.

That's a great contribution from Dr Mike Vertigan and Mr Rhys Edwards, who is a former secretary of Tasmania's Department of Premier and Cabinet. The great contribution our state is making to this energy transition is clear. One of the other reviews was of course the Finkel review, which set out a blueprint for a secure, reliable and lower emissions energy future.

One of the pillars was stronger governance, recognising that clear roles and independent oversight are essential to delivering that transition. The Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025 delivers on this long line of advice. It enshrines the AER's independence, strengthens accountability and positions it to respond decisively to the evolving demands of Australia's energy market.

Just as these reviews envisaged, that's what is being delivered in this bill—no deviation. When we're talking about putting great powers in a regulator, institutions are really important. In fact, if we look at the recent Nobel Prize winners, they talk so much about how important institutions are.

If you look at the ABC's Boyer lecture by economist Professor Justin Wolfers, he also talked about the Australian miracle and how great our institutions are. A big part of that is how we take evidence and science and put respect and trust in our regulators. It's really important that we continue to invest in that capability because, at its heart, regulation really does only work with trust, and trust is earned through clarity.

When the AER is its own entity, it will be overseen by a defined chair with a specific responsibility directly under the Public Governance, Performance and Accountability Act 2013 as a listed entity, and the chain of accountability will be clear. Parliamentarians, industry and consumers all know where to look. Right now, ambiguity diminishes trust—not just trust in institutions but also trust in markets.

So clear accountability will restore any of that trust gap. A regulator that is both independent and answerable, that publishes decisions, that consults on them and that justifies them transparently will strengthen confidence in both market outcomes and governmental oversight. Bringing this back to my home state of Tasmania, we are the renewable energy state, surpassing 100 per cent generation, aiming to provide energy not just for ourselves but for mainland Australia.

We are pursuing clean manufacturing and decarbonised industry and hosting data-centric infrastructure that will underpin our digital future. Imagine data centres that are anchored to wind and solar resources acting as both energy users and grid stabilisers. Envision AI enabled demand systems balancing wind, hydro and battery storage.

In this vision, energy regulation must be not just reactive; it has to be adaptive and forward facing. An independent AER will help enable this. It is an institution that will ensure investors can proceed with confidence.

We're in a race for global capital to invest in our energy system. Having those regulatory settings that are trusted will be a key part of attracting that capital, as is confidence that projects can be assessed promptly, that compliance is enforced competently and energy stability is maintained through the transition. This matters to households facing high energy prices, businesses strategising long-term investment, manufacturers relying on stable power and young Australians who ask whether politics will deliver meaningful reform to them.

I think this bill signals that politics can, does and will respond and deliver structural modernisation that supports growth, sustainability and fairness. It strikes a balance. It embodies the sort of intergenerational fairness that the electorate demanded at the recent election and still demands.

I urge the Senate to support this bill. Act now to ensure a future that is reliable, affordable, locally sovereign and administratively agile. I commend this bill to the Senate.