Wednesday, 16 August 2023

Bills

Energy Legislation Amendment Bill 2023

Second reading

Debate resumed.

Ella GEORGE (Lara) (14:46): I am delighted to rise today to speak on the Energy Legislation Amendment Bill 2023. This bill is an omnibus bill, which will amend the National Electricity (Victoria) Act 2005 and the National Gas (Victoria) Act 2008. This legislation is intended to strengthen the electricity and gas regulatory framework in Victoria, and it builds on the Andrews Labor government’s commitment to the people of Victoria when it comes to supporting a reliable and affordable energy supply for Victorian households, families and businesses. There are three components to this legislation. Firstly, the bill adds decision-making criteria to the Victorian legislation in the event that the Minister for Energy and Resources triggers the retailer reliability obligation. Secondly, the bill enables alignment between penalties applied to Victorian gas market participants with those in other jurisdictions. Thirdly, the bill changes outdated references to the gas distribution system code, which is now known as the Gas Distribution System Code of Practice. These amendments are very technical in nature but are all intended to strengthen the electricity and gas frameworks here in Victoria and provide confidence to Victorian households, families and businesses that energy markets are working in their favour.

It is important to consider why these highly technical changes are needed and why this bill is being introduced. Victoria’s electricity system is undergoing a substantial transition. Ageing and increasingly unreliable coal-fired generators are exiting the market and being replaced with cleaner and cheaper renewable energy, and this legislation is all about ensuring a smooth transition from the old to the new. Here in Victoria we are investing in renewable energy, like the $1.3 billion Solar Homes program, which not only generates renewable energy but also helps households and families keep their electricity bills down. Programs like this are so important when we know that many households are struggling with the rising cost of living. This year rooftop solar has generated nearly five times the amount of power compared to the amount of power generated by gas in Victoria. This will only grow as we continue to invest in solar homes.

Then there is the $540 million Renewable Energy Zone Fund, which is all about upgrading Victoria’s energy grid. Renewable energy zones will make it easier for new renewable projects like solar and wind energy to be connected into Victoria’s grid and to power homes and businesses across the state. This $540 million fund also sends a powerful message to the private sector that Victoria is open to investment in new, clean, renewable energy technology. Initiatives like this have allowed Victoria to triple its production of renewable energy since 2014, which is a remarkable achievement. We know that investment is what will drive the transition to renewable energy, but just as important as investment is ensuring that Victoria’s network has the appropriate regulations and frameworks, which is why this bill is before the house.

An important part of the transition to renewable energy as Victoria’s electrical system is upgraded is strengthening the retailer reliability obligation, or RRO. RROs work by ensuring that the electricity retailers and large energy users have enough capacity contracted to meet the forecast demand. RROs help ensure a reliable energy system by requiring companies to hold contracts or invest directly in generation or demand response to support the reliability across the national energy market. The RRO is an important measure that can be triggered when there is a gap in forecast demand. It is there to ensure a steady supply of electricity for all Victorians and to hold retailers and large energy users to account.

This bill will amend the National Electricity (Victoria) Act 2005 to strengthen the RRO framework established under the National Electricity Law, which was amended in 2022 to enable jurisdictional energy ministers to trigger the RRO in their own states and territories. To strengthen this measure further the bill will also introduce Victoria-specific decision-making criteria and consultation safeguards to be used in the event the Victorian minister needs to trigger the RRO in response to an emergency risk of significant electricity disruption. The decision to trigger the RRO will be informed by up-to-date information about the energy sector, forecast demand and the broader economy, and any decision to trigger the RRO will be made in consultation with the Australian Energy Regulator and the Australian Energy Market Operator as well as the Treasurer and the Premier. Additionally if the minister does trigger the RRO, a statement will be published outlining the reasons. It really is a just-in-case measure and will only be used where the energy market does not address a forecast reliability gap. RROs are important, as they ensure that retailers and large customers are responsible for securing contracts directly with providers during times when it is predicted that there will be a lack of supply, and strengthening regulatory frameworks like these is exactly what is needed to give Victorians confidence in an electricity system that can meet demand.

The next function of this bill is to align penalties applied to Victorian gas market participants with those in other jurisdictions. The legislation will enable regulations to be made to increase the maximum civil penalties payable for parties that breach the rules. The change will provide additional flexibility to the Australian Energy Regulator and the courts in determining an appropriate response to instances of non-compliance and help ensure that any civil penalties issued reflect the severity of the conduct and act as a deterrent. Again, this is about holding energy companies to account and protecting energy users. Finally, the bill updates several outdated references to the Essential Services Commission gas distribution code in the National Gas (Victoria) Act 2008, and this will help improve the accurate interpretation of the act.

In Victoria we are leading the way nationally when it comes to renewable energy. We have set an ambitious target of 65 per cent renewable energy generation in Victoria by 2030 and 95 per cent by 2035, and in the Andrews Labor government, when we set a target, we meet it. Previously we had a renewable energy target of 25 per cent by 2020, which was exceeded, and we have increased our 2030 target from 50 per cent to 65 per cent. Renewable energy is something that the Victorian community have really got behind. We took a big and bold renewable energy agenda to the state election last year, including record investments in renewables and bringing back the State Electricity Commission to put power back in the hands of Victorians. We are investing $1 billion to bring back the SEC and deliver 4.5 gigawatts of renewable energy, and that agenda was resoundingly endorsed by Victorians in November last year. We know that the best way to improve electricity reliability is to invest in renewable energy and bring new renewable energy into the energy market. Our investment in renewable energy sets an example for the private sector to invest in renewables and move away from old technologies and coal-powered electricity. It is so important to couple this government investment with the appropriate regulations and frameworks, and on this side of the house that is exactly what we are doing.

I must commend the Minister for Energy and Resources for her leadership in this space and say just how exciting it is to visit different organisations across the electorate of Lara who are doing some truly inspiring work in the renewable electricity generation and renewable energy space. The Lara electorate is home to some of the most amazing minds in the state, and I have been blown away by some of the technology that is being developed. Lara is home to the 300-megawatt Victorian Big Battery, which can provide energy to the broader community in times of need. I had the pleasure of taking a look at the Big Battery with the Deputy Premier last year, when we heard that it has the capacity to power the Geelong region for about 3 hours – an important backup in case of an interruption to the energy grid. We have the incredible team at Austeng led by Lyn and Ross George – no relation – who, after receiving $100,000 through our government’s Renewable Hydrogen Business Ready Fund, were able to investigate the feasibility of replacing cremation equipment powered by gas with hydrogen technology. I joined the Minister for Energy and Resources to launch this hydrogen burner, which is now ready to roll out to industry.

Locally I have had some very engaging conversations on renewable energy generation projects. I could speak all day on this, but there is just one project that I would like to highlight. Pavilion Farms in Anakie are investing in new technology for their biogas project. Their project will convert approximately 30,000 tonnes of chicken litter and other organic waste from their business, which is a chicken farm, into renewable energy and sustainable green fertiliser. It is a really unique project. The manufacturing facility is planned to produce over 8000 tonnes of high-nutrient organic fertiliser from waste. It will reduce the need to rely on chemical fertilisers but importantly will create energy to sustain both sections of their business and of course will create local jobs in Anakie. I am really proud that our government has supported Pavilion Farms with a $9.3 million grant for their biogas project under the Energy Innovation Fund.

The amendments in this bill will ensure that there are better outcomes for consumers. It will strengthen Victoria’s energy network and improve electricity reliability and at the same time enable the transition away from coal generators to clean, green and cheaper renewable energy. I think we all understand the cost-of-living pressure that is affecting families and communities across the state, and this government’s energy policies are designed to help ease that pressure with initiatives such as solar homes and the power saving bonus. The more we invest into renewable technology, the sooner we can bring back the SEC and the sooner we can roll on those savings of cheaper energy into the market for households to benefit from. This bill is just one of a raft of measures this government is making in the energy space to ensure that all Victorians have an efficient, reliable and sustainable energy network. That is why I support this bill and I wish it a speedy passage.

Martin CAMERON (Morwell) (14:56): I also rise to talk on the Energy Legislation Amendment Bill 2023. Firstly, I would just like to thank the member for Croydon who led off this legislation debate. This is about the third or fourth one he has done. What it means, as other members have said, is that as we transition out of our coal-fired power systems that we use now and come into renewables, there are more different types of power supply sources that we are going to need to hook up to the grid. We are just adjusting a few bits and pieces with these amendments so it is easier to make this a lot more bulletproof than it is now, because we have never had to have these bits and pieces in place before.

The bill is part of the government’s commitment to manage the transition of the energy sector to achieve their net zero emissions by 2045 while ensuring a reliable supply of energy to Victoria’s consumers. That is what we expect; we want that absolute reliable supply. The omnibus bill amends the National Electricity (Victoria) Act 2005 and the National Gas (Victoria) Act 2008 to deliver better outcomes to Victorian energy consumers. The main purposes of the bill are:

(a) to amend the National Electricity (Victoria) Act 2005 to incorporate decision-making requirements that will apply to the minister when deciding whether to make a T-3 reliability instrument under the National Electricity Law, and

(b) to amend the National Gas (Victoria) Act 2008 …

to enable regulations to be made that prescribe the civil penalty for a breach of a declared system. Now, I know these are a lot of technical terms, and we do need to get these in place so they can be enacted if we need to do it. The bill will introduce the Victoria-specific decision-making criteria and consultation safeguards to be used in the event of the Victorian minister needing to trigger the retailer reliability obligation in response to an emerging risk of not having the significant amount of power that we need to supply Victoria. We do not want that disruption.

The decision to trigger the RRO will be made in consultation with the Australian Energy Regulator and the Australian Energy Market Operator as well as the Treasurer and the Premier. It will ensure the decision is informed by the most up-to-date information regarding the energy sector and the broader economy, so it will give us a lot more backstops to go to if we have trouble with our power supply and to make sure that we do not have that issue with the power supply. For a long time now we have relied on our coal-fired power stations, so the energy requirements are to make sure that we have got sustainable electricity services in Victoria. As we are heading into the renewable sector, we need to make sure that we have got all these bases covered. The RRO puts in place responsibility on retailers and large customers to secure contracts with electricity producers during periods of forecast lack of supply. This in turn encourages forward contracting, which is important as it helps to underwrite much-needed new investment in electricity generation and avoid supply shortfalls, which are no good for the state and especially no good for the people that live in the state of Victoria.

The bill will improve the functioning of Victoria’s wholesale gas market by enabling regulators to increase the maximum civil penalties payable by parties that breach the rules. The change will provide additional flexibility to the Australian Energy Regulator and the courts in determining prescribed civil penalty provisions. The bill will make further modifications to the national gas law as it applies to the law of Victoria to enable the Supreme Court to make an order that a person pay a civil penalty for a breach of a declared system provision that is prescribed to be a civil penalty provision. If there is a breach, there are ramifications, and it can go to the Supreme Court. Finally, the bill will update reference to the Essential Services Commission gas distribution system code in part 6 of the National Gas (Victoria) Act 2008.

As I said, it is a fairly straightforward bill, as the member for Croydon and other members in the house have spoken about today, but we need to have these things in place as we transition to a lot more industries providing power to Victoria. As I said before, for the general public the reliable supply of energy is paramount. It is human nature that people expect that when you turn your light switch on at home the lights come on and if you plug your mobile phone in or, nowadays, you charge your car the supply of energy is there. Instead of it just coming from a coal-fired power station, it is going to be coming from wind and solar, hydrogen down the track and any other newer renewables that come on line in the future.

The government also spoke about how the renewable sector is going to bring down our power prices, which is great, but at the moment we see that the power prices are still going up, whether it be electricity power prices or gas power prices. It is a real strain on the cost of living for the general punter in the community. Last week I went to the Loy Yang Latrobe energy hub information day down in Traralgon. Obviously Long Yang is one of our power generators down there in the Latrobe Valley. We did have the Minister for Energy and Resources and Minister for the State Electricity Commission down there talking. The question was asked about power prices. The government’s rhetoric has sort of changed a little bit. It was that the renewables coming on board would push down the power prices, and now it is that we have to wait for the renewables to come on board so we can see the benefit of those power prices. It is not an immediate effect; we have to wait to see the power prices start to go down when the offshore wind component starts, the solar component starts and the transmission lines are done. We are still a fair way away from having that ability to see substantial drops in our power prices. As we are all paying bills in here, we would love to see that now, but unfortunately we need to wait until the renewables come on. It was interesting to hear the minister speak about that and to sort of get a time line of when that can happen. We know the time line from when we transition out of coal-fired power stations and into renewables is very tight.

Another one I have been to see is the Hydrogen Energy Supply Chain program, which is supplying hydrogen, and all the aspects of what green hydrogen into the future can provide for the whole of Victoria. With the HESC program, which was a pilot program down in the Latrobe Valley, there are outcomes and jobs that will be able to be done once the government ticks off on the approval and gets the ball rolling on our hydrogen future. It is feasible, it is doable and it is done around the world. It is just another one that the government needs to tick off on to start to create the certainty in the Latrobe Valley of jobs and job security. We are a manufacturing hub down there; that is what we do.

The bill will amend the National Electricity (Victoria) Act 2005 to strengthen the retailer reliability obligation framework established under the National Electricity Law, which was amended to enable jurisdictional energy ministers to trigger the RRO. Now, we could talk about the prospect of gas, which we know the government is trying to phase out here in Victoria, but we will have to leave that for another day. I would like to thank the providers that the member for Croydon has spoken to and initiated talks with. As the member for Croydon and everyone from this side of the house has said, we do not oppose this bill. It is work that needs to be done. It is changing the language with the amendment to make sure that going forward we have that supply line so it is able to be done.

John MULLAHY (Glen Waverley) (15:06): I rise to speak on the Energy Legislation Amendment Bill 2023, and firstly I would like to thank the Minister for Energy and Resources and her team for bringing this bill to the house. It is excellent to see so many bills coming through in the energy space, and it demonstrates how the Andrews Labor government is doing what matters when it comes to energy policy. I would also like to acknowledge the wonderful contribution by the member for Lara, who preceded me. The purpose of this bill is to improve and strengthen the framework around gas and electricity in Victoria. This bill seeks to amend the National Gas (Victoria) Act 2008 and the National Electricity (Victoria) Act 2005. This bill can essentially be broken down into three parts.

The first is to add decision-making criteria to Victoria’s legislation in the event that the minister for energy triggers the retailer reliability obligation, known as the RRO. To fully understand the necessity of the RRO it is important to recognise the context in which this operates. Victoria’s energy and electricity system is undergoing a rapid change. As the state, the nation and the world transition from fossil fuels to renewable energy, increasingly unreliable coal-fired generators are being replaced with cleaner and cheaper renewables. Smaller yet necessary measures ensure that the right regulations are in place to improve reliability. One such measure is the RRO. In its annual electricity statement of opportunities the Australian Energy Market Operator publishes a long-term outlook. This forecasts electricity reliability in the national energy market. However, if a reliability gap remains three years and three months out, the RRO can be triggered. This safety mechanism will act as an additional insurance policy to ensure that the amount of contracted power generation equals the forecast demand well ahead of time. This bill adds additional safeguards to existing Victorian legislation to provide assurances that any triggering of the RRO is justified. And for further transparency, once the RRO has been triggered, a statement of reasons will be published.

The government understands that in order to facilitate an effective and efficient transition we must introduce measures to ensure sustainability of our energy supply. We are continuing to progress our efforts, which will ensure that as coal-fired generators close we have sufficient renewable energy generation and storage capacity. Strong renewable energy targets and programs such as the Victorian renewable energy target auctions, named VRET 1 and VRET 2, are critical to this process. They provide long-term contracts that create investment certainty to build new renewable energy generation projects. After the success of VRET 1 it was great to be with the minister to announce the successful projects for VRET 2 last October in my district of Glen Waverley. Six projects have been successful. VRET 2 will bring forward 623 megawatts of new renewable generation, as well as delivering 365 megawatts and 600 megawatt hours of new battery energy storage. This will be delivered by the six successful projects. It was great to be down at Wilson Transformers in my district where we made that announcement. The successful projects are the Derby solar project, Frasers solar farm, Fulham solar farm and DC coupled battery, Glenrowan solar farm, Horsham solar farm and Kiamal solar farm.

Our government is committed to reaching 100 per cent renewable energy consumption for government operations by 2025, which these six projects will help deliver. VRET 2 is a vital step in Victoria meeting legislated renewable energy targets of 40 per cent by 2025 and 50 per cent by 2030. It will continue to place downward pressure on electricity prices, which will be a relief for all Victorians. Furthermore, our $1.3 billion Solar Homes program has already helped more than 200,000 Victorians receive a solar rebate. By switching to solar Victorians can save over $1000 every year on their energy bills. By incentivising Victorians to make the switch to solar we are facilitating a smoother transition to clean and renewable energy.

As of March this year at least 3375 households in my electorate have applied for the Solar Homes program. A majority of these applications have been for solar panels, but there have also been a significant number of applications for battery and solar hot water rebates. It is great to see so many people in my community that are taking up the opportunity to make the switch to renewable energy. I am proud to be part of a government that is providing decent rebates for Victorians to make the switch to cheaper and more environmentally friendly sources of energy. While I and my team of volunteers were out doorknocking throughout the electorate, we spoke to many households who have already applied for these rebates through the Solar Homes program. Many spoke of the financial difference switching to solar has already made to their finances, and many are also proud to be using renewable energy.

On the subject of solar power I must make mention of my recent visit to a great local public school in my electorate, Brentwood Secondary College. After a heartwarming visit to Glenallen special school I joined the deputy mayor of Monash council Nicky Luo to take part in a tree-planting event at Brentwood. Brentwood Secondary is leading the way on environmental action, having received a 2021 Premier’s Sustainability Award, a 2022 Sir John Monash Award and the 2022 ResourceSmart Schools Award as the only 5-star ResourceSmart school in the state. I congratulate the Green Team led by Venkata Kalva, and I was pleased to play my part in protecting the local environment.

Further on initiatives regarding solar, the Andrews Labor government has introduced the $540 million – yes, $540 million – Renewable Energy Zone Fund, which will make it easier for new projects to be connected to Victoria’s grid. How could we forget that the Andrews Labor government is bringing back the SEC? The SEC will support Victoria’s renewable energy transition. We are investing an initial $1 billion towards delivering 4.5 gigawatts of renewable energy. This government understands the importance of publicly owned renewable energy. Not only will it drive down energy prices, but it will also improve reliability for all Victorians.

The second part of this bill goes to aligning penalties applied to Victorian gas market participants with those in other jurisdictions. The bill will enable maximum civil penalties payable by gas companies to increase. This will allow the Australian Energy Regulator to consistently apply penalties across the east coast gas market. This amendment reflects the government’s consistent and tough approach to energy companies that do the wrong thing by Victorians.

It is a shame and a disgrace that under the previous Liberal government big energy companies were given free rein to exploit loopholes. In a short span of just four years for Victorians, gas and electricity disconnections more than doubled and power prices increased by nearly 35 per cent. We cannot accept a situation in which the most vulnerable Victorians are left without access to electricity and heating. That is why these measures are an appropriate incentive for power companies to act appropriately. It is under our watch that the number of disconnections has halved, and we have supported all but more specifically the most vulnerable Victorians with not one or two but four rounds of the power saving bonus.

As of 25 July at least 11,967 households in my electorate of Glen Waverley have applied for the latest round of the power saving bonus. That is almost $3 million worth of cost-of-living support to people in my electorate, which I am sure is something that my constituents appreciate. We have helped hundreds of constituents in the community to apply for the bonus, especially those who struggle with submitting an application online themselves. As an office we have run several power saving bonus application sessions across the electorate, including at Highvale Retirement Village, Aveo Oak Tree Hill and the Australian Unity Victoria Grange retirement community. We also ran two sessions at South East Volunteers in Glen Waverley, including one session with the Premier. The current round is open until 31 August, so to all my constituents: make sure you get your application in if you have not done so already. If anyone in the Glen Waverley district needs assistance in applying, please contact my office. We are always there to help.

This bill will encourage improved cooperation between the state and federal governments when it comes to energy matters, which is a win for everyone. For the last 10 years or so Victorians have faced delays and stagnation on energy policy from the previous coalition government, including the lack of belief and motivation to be serious when it came to adopting renewable energy. As I mentioned before, the Andrews Labor government is doing so much work in the energy and renewables space. This includes our recent budget commitment to introducing 100 neighbourhood batteries across the state, including one in the City of Monash. These batteries will play an integral role in providing power for our local communities. Essentially these batteries will collect energy and store it throughout the day and then feed it back into the grid at night. As a result, an estimated 25,000 homes will be provided with cleaner and cheaper energy from these batteries.

Once again, it is great to see so many energy-related bills being discussed in the chamber, including this bill. I would like to thank the minister once again, alongside her excellent team, for their tireless efforts in improving the energy sector for all Victorians. I am proud to be part of an Andrews Labor government that takes energy policy, including renewable energy, seriously so all Victorians, including those in my electorate, can have widespread access to cheaper and cleaner energy. Because this is the Energy Legislation Amendment Bill, I would just like to digress. I am looking forward to seeing the energy that the Matildas will bring tonight. Kerr, Raso, Fowler and Mackenzie Arnold – I am sure they are going to shock the English into submission, and I commend this bill to the house.

Roma BRITNELL (South-West Coast) (15:16): I rise to speak on the Energy Legislation Amendment Bill 2023. I thank the Shadow Minister for Energy and Resources, David Hodgett, for his earlier presentation where he outlined the bill. But just in a nutshell, before I start speaking about the effects of these sorts of bills in South-West Coast, which is probably going to be my main focus, I would just like to quickly outline that some years ago there was national legislation, or a program, that evolved as a result of the identification that in an emergency situation, usually a natural disaster, there did need to be the ability to trigger a response. The retailer reliability obligation – the RRO – was formed to make sure that there was the ability to have energy available to the community. In 2019 an amendment was made, and the state premiers and chief ministers were given the ability to trigger that RRO in their states.

This piece of legislation has come to our attention, and it puts a bit of a framework in place for the Minister for Energy and Resources if she needs to pull the trigger or use those levers in that sort of time frame of about three and a half years. There needs to be a framework around that and a statement of explanation. The principle of that I get. It makes some sense in that legislation to put a framework in place – no-one is going to be uncomfortable with that. The bill also does a number of other omnibus-type actions. One of those is around the gas civil penalties.

I am just going to a focus for a minute on the fact that we have a government, the Andrews Labor government, who have been in for the last decade. Over the last decade what we have seen is power bills increase. Whilst it is important to have regulation and some frameworks, what we really need is action at this point in time. We are in the middle of a real cost-of-living crisis. Every day in my office people write to me about the concerns they have about how they are going to cope. I think this is very relevant to this bill. This is from a pensioner, and he says:

We have just received a notice of increase in electricity charges starting August 1st 2023 which are outrageous –

He goes on and says:

… The Daily supply charge has also increased we will be paying $542 per year just to have the electricity connected.

Danny O’Brien: What?

Roma BRITNELL: Yes, that’s exactly right. This is a rise of almost 700 per cent in costs since he retired in the year 2000. Unfortunately, as he states:

… my savings have not earned that much. My standard of living like so many other retirees is going backwards.

I think that is the point. There are levers that the government can use, and despite all the years they have had – in fact I said a decade but it is actually 20 of the last 24 years – what we have got is a cost-of-living crisis, and energy sits along with groceries at the forefront of that.

People in the township of Terang, for instance, have written to me, and they say they have increases in their gas bills of over 80 per cent. Terang only has one provider, so they have no way to keep their energy costs down. They just cannot do it. The people who took the gas to the township of Terang did it in good faith, but unfortunately – and I am not standing up for big corporates – there has not been the regulation or the environment put in place by the government that does need to be put in place to make sure that these sorts of exorbitant cost rises do not take place.

So whilst this bill puts a framework around a decision-making process and makes sure the minister puts out a statement of reasons for instigating and triggering the retail reliability obligation to take effect, I asked at the bill briefing, ‘If the minister identifies that in 3½ years time there is going to be a gap and we will not have enough energy to meet the requirements, how does this actually encourage, incentivise or ensure that the contractors who have the supply of energy actually invest or make sure there are generators available? What is the actual mechanism for that to take place?’ Unfortunately, that is outside the parameters of this bill, but for me I think that we have just gone and raced towards a future that takes away reliability and affordability. And when you have been in nursing like I have, you have had people say to you, ‘I’m not putting the heater on in winter because I’m just too frightened of the power bill.’ I have actually been in situations where many, in fact probably numerous, clients have ended up in hospital with a chest infection which has then become pneumonia because of the cold of the winter. They are literally too frightened to see the power bills go up, so they are just not turning the heaters on. These are the real consequences. There are real consequences when people are so worried about the cost of living.

I quoted a constituent who talks about a 700 per cent rise in his power bill and how his retirement means have not gone up in any way, shape or form in the last 23 years, since the year 2000. That is pretty similar to the length of time that the government has been in – 20 of the last 24 years. I talk about the people of Terang. So many of them are just so worried. Many people in South-West Coast use wood to warm their homes. That was the only form of heating I ever had on the farm. Getting up at 3 o’clock in the morning was a necessity to make sure the house was warm, because the fire would not stay alight if you did not do that at 3 in the morning. So I totally get how all these wonderful changes might sound great to the minister, like cutting off gas to new homes. But when the industry has worked so hard towards change and we are putting hydrogen, for example, into houses through the same mechanism that the gas currently goes through, if we are not going to actually put those pipes to the houses, how are we going to work towards an affordable future that gives reliability and affordability and creates the change that we do have to move towards, but not in a way that puts a crisis in place? I think that is what this legislation really is identifying. There will be gaps. There will be gaps in the market, and we will see that, more than likely. I think we went very close last winter, from what the experts who talk to me about this said. So we do not want to see that. The people I referred to that I came across in my community nursing days that were too frightened to turn on the heater – that is only going to get worse.

We have had two sitting weeks since the winter recess, and the bills have not been coming in thick and fast. In fact they have rushed a couple in this week and have only given less than the normal time frame to be able to consult with the community. It feels like this government are just running out of ideas, and when they come up with one it is, ‘Let’s rush it out really quickly because we probably need something to fill the space,’ because it is quite clear they are scrambling.

Whilst, as the member for Croydon said, I do not oppose this bill, I struggle to understand how it is helpful to the community of south-west Victoria, when power has never been more expensive, people are really frightened of what the future brings, we are cutting off opportunity for people and we are spending a lot of time just spinning the wheels and spinning out the spin to make it look like the Andrews Labor government are actually doing something. I think that is sometimes making a fool of our community rather than actually achieving affordable, reliable power and being responsible governors of the state. I will finish on that note. I look forward to legislation that comes to the Parliament that does actually address the cost-of-living crisis rather than just fluff around the edges. I will not say the term that comes to mind that we have just had a ruling on as that would not be appropriate, but the government should get a wriggle on.

Chris COUZENS (Geelong) (15:25): I am pleased to rise to contribute to the Energy Legislation Amendment Bill 2023, and I thank the Minister for Energy and Resources for her work on all the energy policy.

This bill will ensure better outcomes for consumers, particularly some of the most vulnerable in our communities. Victoria is leading the way with one of the fastest energy transitions in the world. We have more than tripled the share of renewables in power generation in just eight years, and I think we should all be very proud of that. We have helped nearly a quarter of a million households install solar panels on their roofs, reducing bills and giving them control over their energy. I know in my community people are taking up those opportunities to have solar panels put on their roofs. There are things like the Victorian Big Battery that we have in our region – it is the largest in the Southern Hemisphere and makes Victoria the home of the Big Battery – things that as a government we are really proud of. And there are actions. We have reduced greenhouse gas emissions by more than any other state in Australia since 2014. We have had hundreds of power saving bonus applications. My office and I have been out there promoting that throughout our community, just as many on this side of the house have been doing, and I understand some members on the other side of the house have been doing that as well. This is making a real difference to so many households, so we are always out there encouraging people to apply for that power saving bonus and promoting that as much as possible.

We also have exciting changes which mean more jobs, cheaper energy and cleaner air for our communities, and these are great opportunities. As I think I mentioned in a previous energy speech, Federation Uni in Ballarat is developing a training course for workers to be able to carry out the important work that needs to be done. These are the sorts of things that help support my community but also many communities around Victoria, particularly in regional Victoria. The fact that the state government saw Federation Uni as the place to do this training is really fantastic for that community but also for communities like mine that are only an hour down the road and particularly for younger people to take up those training opportunities. It is a great opportunity in my community. My community supports all the legislation, all the changes and all the policy directions that this government has been taking. I have mentioned in this place many times how children and young people come to see me at my office to talk about what we are doing in terms of not only energy but protecting our climate and dealing with environmental issues. It is a really important issue in all our electorates, and I often sit down with people and have those discussions. From the feedback I get, they are very happy with what we are doing as a government. They see that we are leading the way in this country.

We have in Geelong the Geelong Sustainability organisation who work very closely with us – always pushing for more, and that is fair enough. I have regular contact with them and discussions about what needs to happen. They are a great organisation, a community-based organisation, that really does care about what we are doing as a government but, as I said, also acknowledges that Victoria is leading the way in this community.

This bill has three components to it. The first adds decision-making criteria to Victorian legislation in the event that the minister for energy triggers a retailer reliability obligation. The second enables alignment between penalties applied to Victorian gas market participants with those in other jurisdictions. The third changes outdated references to the gas distribution system code, which is now known as the Gas Distribution System Code of Practice. These amendments are technical in nature but provide confidence to Victorians that energy markets are working in their favour. Our electricity system is undergoing a fundamental technological transformation as ageing and increasingly unreliable coal-fired generators exit the market. Those generators are being replaced by cheaper renewable energy. To enable a smooth transition from old technology to new we must introduce measures to ensure that the lights stay on. The primary measures are those that support new renewable capacity to come online in time for the closure of the coal-fired generators. In Victoria those measures include strong renewable energy targets and programs such as our Victorian renewable energy target auctions, our $1.3 billion Solar Homes program and the $540 million Renewable Energy Zone Fund.

Smaller measures that ensure that the right rules are in place to improve reliability are also important. One such measure is the retailer reliability obligation, or RRO. The RRO works by ensuring that electricity retailers and large energy users have enough capacity contracted to meet the forecast demand. The Australian Energy Market Operator, AEMO, publishes a long-term reliability outlook in its annual electricity statement of opportunities – the ESOO. The ESOO forecasts electricity reliability in the national electricity market over a 10-year period, identifying any reliability gaps. This provides a signal to investors and policymakers to bring on new capacity to meet the gap ahead of time. If a reliability gap remains three years and three months out, AEMO or state and territory energy ministers can trigger the RRO. It acts as an additional insurance policy by ensuring that the amount of contracted power generation equals the forecast demand well ahead of time.

The RRO was introduced at the national level in 2019, with the ability to trigger the mechanism initially vested with AEMO. In 2022 the trigger was extended to state and territory energy ministers. The ability of the Victorian energy minister to trigger the RRO already exists in national legislation. This bill adds additional decision-making criteria and consultation safeguards to Victorian legislation to provide assurance to energy users and market participants that a decision to trigger the RRO is justified. Before triggering the RRO the minister will consult with AEMO, the Australian Energy Regulator, the Premier and the Treasurer to ensure that the most relevant and up-to-date data is being used. Once the RRO has been triggered, a statement of reasons will be published outlining the reasons for the decision. The RRO is a just-in-case measure that will be used only when the market does not automatically respond to a forecast reliability gap.

We already know that the best way to improve reliability is to bring renewable capacity into the market, and our government’s energy agenda has been hugely successful in doing just that. Our ambitious renewable energy targets are the foundation of that agenda, setting a clear direction for investors to follow. We have set a target of 65 per cent renewable electricity generation in Victoria by 2030 and 95 per cent by 2035, and when we set a target, we hit it. We smashed our 2020 renewable energy target of 25 per cent, and we have increased our 2030 target from 50 per cent to 65 per cent. We have supported the targets with policies that promote the deployment of new renewable energy capacity. Our first Victorian renewable energy target auction was the largest of its type in Australia when it was launched and supported five projects totalling 800 megawatts of new capacity. Our second auction will bring forward 623 megawatts of new renewable generation capacity and deliver up to 365 megawatts of new battery energy storage.

Our $1.3 billion Solar Homes program is delivering renewables at the household level. We have already helped over 200,000 households access rooftop solar, and as I pointed out, in my electorate that has been taken up by many, many families who are reaping the benefits of that. It is really important that we continue these significant programs. I think the introduction of the SEC was met very strongly by my community as the only way to go. They were very excited about those opportunities. I commend the bill to the house.

Cindy McLEISH (Eildon) (15:35): The Energy Legislation Amendment Bill 2023 before us sets a couple of noble goals, I would say. The government says it is part of their commitment to manage the transition of the energy sector to achieve net zero emissions by 2045 and at the same time have a reliable supply of energy for Victorians. I think a cleaner environment is something that everybody would want. Reducing pollutants, toxins and emissions is something that will do us, our children and the planet the world of good. The purposes of the bill here, though, are around the reliability of energy. We know that there has been a lot of energy supply and there have been a lot of instances where that supply has not been reliable, and I think that is still going to be the case as we go forward, because lots of things do happen that you cannot predict. I will outline a couple of things that have happened that you could not have predicted, regardless of what the government might like to say.

A bit of background here – what is fairly crucial is the retailer reliability obligation. That was something that commenced first of all in 2019, in the middle of the year, and it supports a reliable energy system by requiring the energy retailers and some of the larger users to hold contracts or invest directly in generation or demand response to support reliability in the national electricity market. If you have a look at the movements of power through the state, there is a lot of trading and there is a lot of movement. I certainly know that going through my electorate are the key transmission lines between Melbourne and Sydney, and that is getting a little bit of attention at the moment.

The national electricity market is having a bit of a transition because there is a lot of technological change going on, and that is something that will continue to happen. Where we are now is going to be somewhere quite different to where we will be in 2045, in another 20 or so years. Things have been really moving on in leaps and bounds, and it is important that the governments across the country are mindful of what is happening and what might happen, to be prepared and make sure that we plan and set up for different changes. We have certainly got a lot of renewables coming into the market. Despite that, prices are still going up. This is one thing that I think the government is forgetting – that they talk the talk, but at the same time the prices are continuing to go up, not come down. A lot of people at the last election were expecting that their bills were going to come down and have found actually that is one other element of the cost of living that is really biting, and biting hard.

This bill, with the RRO, the retailer reliability obligation, will introduce Victoria-specific decision-making criteria and consultation safeguards to be used in the event that the minister needs to trigger the RRO in response to an emerging risk of significant electricity disruption. So there will be a risk of disruption. Sometimes we have planned outages and a lot of times we have unplanned outages. The decision to trigger the RRO will be made in consultation with the Australian Energy Regulator, the Australian Energy Market Operator as well as the Treasurer and the Premier. So there are quite a number of people that would be across this when it needs to happen. Now, the shadow minister, the member for Croydon, consulted quite widely with this, engaging with many stakeholders – the energy networks across Australia, the Clean Energy Council, consumers, the Energy Grid Alliance, AGL and Origin – as I said, a lot of the big companies in this field – to get their understanding. It is something that we are not going to be opposing.

I want to talk about some of the issues with reliability of supply, because we know what happened in South Australia in 2016 in September: they had a massive statewide blackout. It is pretty disturbing when everything is out. How do you fix that all at once? They had across the transmission network cascading failures, and it really was something that they did not predict and had to try and get on top of. So these sorts of things do happen. I see it in my electorate all the time; we have planned and unplanned outages. People show me their phones where they have the text messages about the number of planned outages. What really irks people is when they are notified of the planned outages and businesses make arrangements to either close for the morning or to put staff off, and then they go in there and turn the lights on at 7 o’clock and they stay on, and they have already made alternative arrangements. It is very frustrating. It is so important that if the communications say it is going to be a planned outage, it is a planned outage. Of course we have the unplanned outages, which sometimes can be a couple of hours. Depending on what has happened – it might be a trip, a branch over a line – it might be easily fixed, or it could be days or even months. It is very difficult when we have the big outages, say like Black Saturday or the storms in the Yarra Ranges a few years ago. It made a huge impact on people’s lives when they saw not just powerlines down but the power poles snapped in half and knew that it was going to be an outage for a significant period of time.

One of the things I like as we transition to renewables is the inclusion of gas in this, and particularly an energy mix. There have been times when the power was out, and if people had gas, they could still cook at home. Or vice versa: if they had gas hot water and the gas was off, they might have been able to boil kettles and things like that through power. So having a mix I think actually is not a bad thing, and I am quite concerned that the government really is moving away from gas, because conventional gas exploration has held us in good stead for well over 100 years. When we are drilling wells and the gas comes out – it is either pumped out or pressure – that is something that is very different from fracking. Fracking is where you have got the cracks in the rock and you put high pressure in there, whether you are injecting water, chemicals or sand, and that can open up those cracks. Fracking is banned here, and everybody is good with that. Conventional gas exploration has kind of been blurred a little bit, and I think there is very much a role as we transition for conventional gas exploration in Victoria. It will help really secure our supply.

A number of government members have talked about, gloated about, the SEC, and there are a lot of issues with that. First of all, when Joan Kirner began selling off the SEC way back when, she was selling it off because it had a debt of $8 billion. A government cannot bail out an agency with an $8 billion debt. I am really hoping things turn around, because at the moment we have such little information. In June we had reports that the SEC’s chief executive Chris Miller had warned that power prices were going to continue to rise significantly. This is deeply concerning.

Despite the government at the last election talking it up, we do not know about the first project. Nothing has been confirmed. When will additional information enter the grid? Is it going to be a public–private partnership? A lot of people in my area have asked that question as different renewable projects come onboard. If it is going to go through people’s properties, what are the rights of acquisition? A private company does not have any, but if they are in PPP with the government, perhaps they do. These are things that are quite concerning to people in my electorate. Mr Miller also told the Australian Energy Week conference that getting to 95 per cent renewables in Victoria will require a large uptick in bill rates. What does that mean? Prices are going up. The minister said this is not right, but she was still unable to offer any answers, so I think we still have quite a way to go in this field.

What I want to mention briefly is also the Scrutiny of Acts and Regulations Committee report, which was tabled yesterday, and in particular the Henry VIII clauses. This is a provision in a bill or an act that permits subordinate legislation to amend an act and that may constitute an inappropriate delegation of power. So what SARC have noted is that:

… the Bill makes amendments to Victoria’s wholesale gas market which forms part of a national scheme of legislation. The Committee notes the significant penalties which may be imposed under section 3A of the South Australian Act.

As a result, the committee is going to write to the minister:

… to seek additional information in relation to the imposition of penalties and other matters which may be prescribed by regulations and the intersection and operation with new sections 70 and 71 of the National Gas (Victoria) Law and section 3A of the South Australian Act.

For reference, that is from pages 4 and 5 of the SARC Alert Digest that was tabled yesterday. The committee is seeking additional information in relation to the disallowance process for regulations. The opposition is not opposing this bill, but I think there are still a number of questions that the government needs to be looking at quite carefully.

Jordan CRUGNALE (Bass) (15:45): I rise to speak on the Energy Legislation Amendment Bill 2023, which is an omnibus bill. As we have heard in the chamber so far, it will strengthen the electricity and gas regulatory framework that applies in Victoria by amending a number of acts, including the National Electricity (Victoria) Act 2005 and the National Gas (Victoria) Act 2008. The changes will enhance the protection afforded to energy consumers and give more certainty to market participants. We are certainly very committed to managing the transition of the energy sector to achieve net zero emissions by 2045 while ensuring the reliable supply of energy to Victorian consumers.

As I have mentioned, the bill does make a number of amendments. These reforms are necessary as they will incorporate the requirements which will guide the Minister for Energy and Resources when deciding to make a T-3 reliability instrument under section 14JA of the National Electricity Law to trigger the retailer reliability obligation, the RRO ministerial trigger. That is amendment 1. I take this opportunity to thank the minister for her work and that of her office and department.

The bill will also amend the National Gas (Victoria) Act 2008 to enable the making of regulations to prescribe high civil penalty amounts for breaches of Victoria-specific provisions of the national gas rules. The bill will correct outdated references to the Essential Services Commission gas distribution system code as well. As I have mentioned, the bill delivers these three amendments, which will result in improvements to the national electricity act and the gas act.

I might have to start talking about renewables, as some of my colleagues have. We are leading the nation in our transition to renewables. We have done so much already in eight years. In fact we have tripled the share of renewables in power generation. We have helped nearly a quarter of a million Victorian households install solar panels on their roofs, reducing bills and giving them control over their energy. We held the Victorian renewable target auction – the country’s largest reverse auction for renewables – and we have installed the Victorian Big Battery, which we have heard about also in the chamber during this debate. It is the largest in the Southern Hemisphere and made Victoria the home of big batteries. Through these actions we have reduced greenhouse gas emissions by more than any other state in Australia since 2014, and we have really only just begun. Having comfortably surpassed the 2020 renewable energy target of 20 per cent, we increased our 2030 renewable energy target from 50 per cent to 65 per cent and we have set a target for 2035 of 95 per cent. This target will be backed by separate targets for offshore wind and energy storage.

I thought I would also talk about a neighbourhood battery, because everything sort of feeds into this, both electricity and gas and our renewables commitment to our state and the nation. It was great on 5 June to say hello to the Phillip Island community energy storage system, our neighbourhood battery. I was joined by the minister to open it. We were amongst some very active local community organisations like Totally Renewable Phillip Island, the Energy Innovation Co-operative and Gippsland Community Power Hub. The PICESS, as it is known, replaces seasonal generators used to support peak demands, which we do have on Phillip Island, and helps address short-term imbalances. It all goes towards achieving our energy storage target. It soaks up the power, stores it and dispatches it when needed. This was a $10.92 million neighbourhood battery initiative, which has supported trials from feasibility to implementation. There is always more, and in an election commitment of 100 more neighbourhood batteries I was very pleased to hear that we will have one each for Bass Coast, Casey and Cardinia shires, which will triple the number of homes with access to a battery, provide crucial extra storage capacity for our communities, drive down power bills and obviously pave the way to getting to our world-leading targets as well.

Our Solar Homes program, as mentioned, has 200,000 installed already. It will power our state with cleaner, cheaper renewable electricity, and our plan will support 59,000 Victorian jobs, because we are all about doing what matters, and community is at the heart of our initiatives, programs, policies and platforms. We are in a renewable energy revolution, and our Andrews Labor government is helping to bring more distributed energy and storage to communities.

It was great mid last year also to be down in Corinella, where we officially celebrated the big install at the Corinella & District Community Centre at their weekly community lunch. We said hello there as well to a big solar power system and battery, which again reduces emissions, saves on their power bills and provides grid independence and resilience during power outages. This was in partnership with the local council and the centre, who met us halfway, funded from our $3.1 million community climate change and energy action program round, which supports our communities to transition to a net zero carbon economy. It was great to be there with the manager, the president, the board and a whole heap of people. We have also installed on the Coronet Bay community hall and at Venus Bay, which is out of my electorate, at the Venus Bay Community Centre –

Danny O’Brien: It’s in a good electorate.

Jordan CRUGNALE: I know – and at the Bass Coast Adult Education Centre. It is a great town, Venus Bay. I can see it from where I live.

In June it was great to be at the Bass Coast Children’s Centre, where the kids, parents and teachers were absolutely overjoyed at how solar panels have slashed their energy bills thanks to a solar power system supported by grant funding from Sustainability Victoria under the community climate change and energy action program – a very long name – and the centre and Bass Coast shire as well. So it is about these partnerships that we have with local organisations and councils. Their latest electricity bills reveal an outstanding 54 per cent decrease in usage compared to the same time last year, and it is all expected to be paid back within 18 months after electricity bill savings are accounted for. That is huge.

We have also got a very bright future, particularly with Morwell-based Solar Victoria’s work, to provide better access to renewable energy for households all over the state. I am a huge fan of solar and wind, and it is great that, alongside my upper house MP in the other place Harriet Shing, we are continuing to champion projects for Gippsland that will deliver jobs, energy and reliability using the new technologies that are continuing to evolve at lightning speed. Of course offshore wind is in the mix, and again it was only earlier this year that I was thrilled to join with our energy minister for a significant milestone down at Star of the South project as they launched their specialist research geotech vessel.

Danny O’Brien: Also in a good electorate.

Jordan CRUGNALE: That is right. We do a lot of work right across the state. This is big, transformational and nation leading, and it is offshore wind energy, and it started right there in Gippsland. We go beyond.

A member interjected.

Jordan CRUGNALE: That is right. This is a whole new industry that is already attracting lots of local and global investment and interest. We are talking a massive transformation of the entire energy sector and a transition to a clean economy, which will help us reach our targets: creating a healthy environment by slashing our emissions and lowering our power bills – and it is great for jobs too. Some of the jobs are quite remarkable, actually, and I am trying to get my kids into trades now that they are in high school. There are huge opportunities for our local training organisations such as Gippsland TAFE and Fed Uni, and having a clean energy curriculum in our schools means we will be creating these pathways early and skilling up our kids for good, secure and intergenerational jobs. Then there is the whole supply chain and also the opportunities created by energy being produced – anything from manufacturing to food and fibre production – so the opportunities abound.

I have not had a chance to speak on the SEC of course, but other colleagues have.

Danny O’Brien: You should talk about Gippsland South too.

Jordan CRUGNALE: It is the whole of Gippsland, and we work right across electoral boundaries for the benefit of our whole community. I do not know if I could stretch that out for 21 seconds. This bill, as I have mentioned, is designed to strengthen the electricity and gas framework that applies in Victoria by amending the various acts that I have mentioned. I totally commend this bill to the house.

Jade BENHAM (Mildura) (15:55): I am happy to rise today to speak on the Energy Legislation Amendment Bill 2023, and what a week to do so. As we know, this bill amends the National Electricity (Victoria) Act 2005 to strengthen the retailer reliability obligation, the RRO, which we have heard a lot about today. The framework established under the National Electricity Law was recently amended to enable jurisdictional energy ministers to trigger the RRO. The decision to trigger the RRO will be made in consultation with the Australian Energy Regulator, the Australian Energy Market Operator, or AEMO, as well as the Treasurer and the Premier.

AEMO have been top of mind in my electorate for quite some time now. A great number of western Victoria’s food producers were out the front yesterday expressing their concern about the lack of consultation that they have had over the Victoria to New South Wales Interconnector West (VNI West) project being rolled out by AEMO. That is what happens when food producers are ignored. It is human nature to want to protect your patch, and these food producers yesterday left their crops. Some spud farmers are in the middle of harvest, and it is not easy to just up and leave your farm in the middle of harvest as those down in Gippsland did. There are some great spuds grown in Gippsland. My next-door neighbours grow spuds for Smith’s.

It is not easy to do that, but they are a passionate and committed bunch and they brought 22 trucks carrying 45 tractors here yesterday. They should be congratulated on their conviction and their dedication to this cause. The federal Leader of the Nationals David Littleproud made the trip; we thank him for his support on this issue. My friend and colleague Anne Webster, the federal member for Mallee, also made the trip. All they are asking for from the government and from AEMO is consultation and not to be ignored. It is actually not that hard. They are also asking for a serious look at the solution that has been presented. They recognise that there is a problem – they know there is a problem – they have a solution on the table, and that is plan B. Also, let me just state that no-one involved in the rally is against renewables. In fact they have brought a lot of good things to a lot of our communities with the investment in solar farms, wind farms et cetera. We just want some common sense on this issue, and we are just asking for a look at the plan B that Professor Bruce Mountain, Professor Simon Bartlett and Darren Edwards have presented.

It is a far more elegant solution which presents tangible results in power bill savings if we use existing infrastructure that is already there, and it already needs upgrading anyway – the lines are brittle. It can be done in a far more elegant way. We know if we make food production tougher, prices go up. We are in a cost-of-living crisis. The last thing we need is for our food and grocery bills to go higher, much less our power bills. We need to not ignore our food producers to help out with that cost of living. This would be a great way for the government to illustrate that they want to contribute to solving that cost-of-living crisis in the way of food production.

What that report, plan B, says is that AEMO’s modelling of VNI West shows that wind farms in western Victoria will lose about 40 per cent of their energy production, and solar farms up in my patch in particular are much the same, because the transmission system in the AEMO plan would not be able to accommodate the energy that these farms produce, and they produce a lot. Plan B can. By national and global standards of the variable renewable generation curtailment it is a really extremely poor outcome. Plan B can save energy customers all over Victoria because it will cost approximately $5 billion less. Wouldn’t you just start there? Everyone in this room needs food producers every single day, and they just want the respect that they deserve. They want to be heard and –

The SPEAKER: Order! The time has come for me to interrupt business for the matter of public importance. The member for Mildura will have the call when the matter is next before the Chair.

Business interrupted under sessional orders.