Published on: November 2020
Electricity Infrastructure Investment Bill 2020
Second Reading Debate
Debate resumed from an earlier hour.
Ms YASMIN CATLEY (Swansea) (17:51):
:05 As I was saying before the debate was interrupted, we must also strengthen the Government's task force mechanism and ensure it is able to deliver meaningful outcomes for workers over the medium to long term. We want to see it meet twice per year, report to Parliament and be accountable to the Parliament. We want the task force to be more than a talkfest; it must be tasked with delivering jobs. The task force should be made up of industry, business and workers representatives. It must balance the needs of consumers and of the industry. It should look at projects that we need to start in the short term and it should look at the associated infrastructure that we need to upgrade in order to maximise the long-term viability of an innovative, world-class export industry.
We need to turn the anti-worker, anti-industry thinking of the Berejiklian Government on its head. Instead of starting off with a view that local workers cost too much and that they cannot do it, we need to take the view that local workers build and design the very best. We should support them to do that, not just for Australia but so they can export that expertise and quality to the rest of the world. We need to encourage investment, development, employment, education and training throughout the energy sector. That is the only way we will be able to take people with us as more and more renewable energy projects come online. People need to have faith in the concept and have trust in the delivery. Workers need to trust that the Government has got their backs and they need to be able to trust that they will have a job, not just next year but also for the next decade. Consumers need to trust that prices will remain affordable and the reliability of supply will be guaranteed.
The only way those needs can be met is with the incorporation of Labor's amendments. I agree with the Minister that New South Wales has some of the best energy resources in the world. I also agree that we must take advantage of the full variety of those resources, but we can only do that by improving our network and our transmission infrastructure. In some ways that is why it is so disappointing that, instead of spending the first five or six years in government responding to the changing needs of our energy network, the Government wasted its time selling it all off to the private sector. That of course means those in the private sector have an incentive to not upgrade or change the network and the Government must now come through and offer them further inducements to invest in renewable energy.
So in many ways the bill exists to correct a failure of the market and a failure of the Liberal Government to see what was on the horizon. Over the past five years in particular we have been making the case that the market model for electricity generation and distribution is broken. That is due to the inaction of the Berejiklian Government and the hostility of the Federal Liberal Government to any form of renewable energy. As a consequence we have not seen the investment in the next generation of power plants as quickly or as broadly as has long been necessary.
We know that many existing coal-fired power stations will reach the end of their life span over the next 10 to 15 years. We know that many of their owners are not interested in extending their lifespans beyond that time. If unaddressed, that will lead to a lack of energy during peak seasons and power price spikes which will cripple household budgets. So it stands to reason that for the simple reason of supply and demand, we must investigate, plan and build new energy projects now so that we are ready in 10 years' time when those old power stations go offline. That is simply the reality.
We on this side acknowledge the reasons the bill is imperative and we acknowledge that the Government has finally begun to engage with an issue which Labor has been warning it of for many years, but we also say to Minister Kean that this is his one opportunity to get it right. He must amend the legislation and take seriously what we have been suggesting to him and his colleagues. The renewable energy infrastructure investment that must take place must also bring energy, manufacturing and infrastructure workers along with it. I reiterate my calls for the Government to support Labor's amendments.
Ms FELICITY WILSON (North Shore) (17:56):
:17 I am pleased to speak in support of the Electricity Infrastructure Investment Bill 2020, which is a key piece of legislation to deliver the New South Wales Electricity Infrastructure Roadmap. This is a show of leadership by the New South Wales Government to address the energy reliability and price challenges that we face in the future. It is a challenge that for too long has not been addressed. The leadership shown by this Government and by the Minister for Energy and Environment is something that we should all be very proud of as we move into the coming generation.
We all know that reform is needed to make sure that we have the required capacity to replace closing power stations at the right time, in the right places and in optimal portfolios. We need to start now because it will take a long time. It took 30 years to build the existing coal-fired power stations in New South Wales, and four out of five of them will retire in less than 15 years and will need to be replaced. Those power stations make up 75 per cent of the State's energy supply. The required capacity to replace closing power stations will not be brought forward at the right time, in the right places and in optimal portfolios by private investors under current market and regulatory frameworks. That is why we need to act now to build a modern grid at the lowest cost and in places that work for our regional and rural communities, which is an absolute priority for the Government. If we delay, consumers will face long periods of high prices and unreliable supply.
We all know that the market is moving away from thermal coal and that there is a challenge to try and replace coal-fired power stations. My community in particular is not only focused on that issue but also on the need to address climate change and invest more heavily in renewables as a more optimal option for our community and environment—and also a more financially sustainable option in to the future. I am very proud to support the legislation on behalf of my community that sees it as a significant economic challenge and a significant challenge for the environment. The bill also embeds regional outcomes into the fabric of the energy transition. The nature of the projects means that the vast majority of investment will occur in regional New South Wales.
The Committee on Environment and Planning—which includes me and my colleagues the member for Sydney, who is chair, the member for Macquarie Fields, the member for Wollondilly and the member for Manly—has been undertaking an inquiry into the sustainability of energy supply and resources. We have heard significant contributions from people in regional communities who are concerned about the future of their industries, livelihoods and communities, and the effects that the loss of those coal-fired power stations could have on their communities. We have an obligation to step forward and make sure that we are planning for the future transition for those industries and communities. The leadership position put forward in this legislation shows that we are taking that stand to invest in those communities.
We know that the private sector already sees the potential in New South Wales and has signalled its readiness to invest in energy infrastructure. There are 120 distinct large-scale energy projects in the planning system, representing about $25 billion of potential investment. The road map is forecast to deliver up to $32 billion in private investment by 2030 and support 9,000 new jobs by 2030. The majority of this investment and jobs which flow from it will be in regional New South Wales, with approximately $20.7 billion to be invested in the renewable energy zones [REZs] alone.
The infrastructure safeguard has been designed to ensure new energy infrastructure optimises benefits for consumers at lowest cost and risk. It will do this by encouraging new low-cost projects, keeping project costs down, leading to lower energy bills, reducing risks of delayed investment and associated price spikes which we have seen in other jurisdictions when coal-fired power stations have closed, and ensuring sufficient capacity in the system to keep the lights on when demand is high. Long-term energy service [LTES] agreements give investors confidence by providing certainty of a competitively set minimum return. As we know, global demand for low carbon products is increasing. Industries such as chemicals and materials manufacturing, transport and heavy industry are all going to rely on clean energy to decarbonise. Abundant cheap, clean and reliable energy in New South Wales will attract international investment, particularly to New South Wales regions.
This bill will help New South Wales take advantage of a share of the national hydrogen, green ammonia and green steel industries. In the renewable energy zones the Government will work to attract co-located industries such as minerals processing, IT and data centres, agriculture, manufacturing and food processing, meaning the benefits of cheap, clean energy will last beyond construction. The road map complements the Energy Security Board's post-2025 market review and the Australian Energy Market Commission's work on transmission access reforms and is complementary to the retailer reliability obligation. New South Wales will continue to work with national bodies to ensure that our reforms are mutually reinforcing.
Under the infrastructure safeguard a consumer trustee will be appointed to run competitive process rounds to offer long-term energy service agreements for generation, long duration storage and firming. Development pathways for generation, long duration storage and firming will guide these competitive processes and ensure that investment planning is integrated to produce the lowest cost and high reliability for electricity consumers. Technologies can participate in the competitive process that is appropriate for each energy service, with contracts expected to be awarded to wind, solar, gas and storage projects.
The infrastructure safeguard established under the bill will provide revenue certainty for private investment in new generation, which will help secure finance for its construction. It will provide an early signal to investors that their generation and storage projects will have a transmission line to connect to. An integrated whole-of-system approach adopted by the road map ensures that the capacity, location and timing of transmission, generation and firming projects are harmonised to maximise the affordability, reliability and security of New South Wales' electricity supply, and economic and social benefits to regional communities.
The Energy Corporation of NSW will lead the strategic coordination of the Government's approach to community and stakeholder management, helping to establish the social licence for the new REZ infrastructure. It is crucial that the planning pathway and supporting framework enables coordinated infrastructure development. All aspects of delivering new energy infrastructure will be considered: land use, community benefits, planning and assessments, and regional economic development. Our renewable energy zones and pumped hydro sites have the potential to deliver a huge boost to local communities—growth and long-term jobs where our communities need it most.
Major energy infrastructure projects will bring jobs to the regions with flow-on benefits including improvements to roads and telecommunications. Landholders who host infrastructure supported by the infrastructure safeguard will receive lease payments estimated at $1.5 billion by 2042. The bill provides for an access regime within renewable energy zones where the vast majority of regional investment is expected to occur. In return, generators pay access fees, a portion of which will go to community enhancement funds such as in health, sports or upgrades to parks and playgrounds.
Earlier this year the Government extended the life of the Energy Savings Scheme from 2025 to 2050 and announced increases to its energy savings target. These initiatives will improve energy affordability, reliability and sustainability for households and businesses. Amendments to the Electricity Supply Act will allow energy savings targets to be set beyond 2025 and to be changed if there is a forecast breach of the Energy Security Target. The scheme has been successful to date in encouraging households and businesses in New South Wales to save energy and money; however, small retailers have faced challenges in meeting their obligations under the scheme as a result of the COVID-19 pandemic. The bill will make it possible to exempt small retailers from their obligations during emergencies like the pandemic. The bill also streamlines the administration of the Energy Security Safeguard by ensuring that the new peak demand reduction scheme can use the same administrative arrangements as the existing Energy Savings Scheme.
We know that the bill will create jobs. It drives investment and will deliver benefits for the citizens of this State for generations to come. While there will be many discussions and contributions to this debate, with a lot of support thankfully from those across the Chamber, it is an issue that needs leadership and I acknowledge the leadership of this Government. Energy policy in Australia is not something where achieving an outcome is always easy and disappointingly has not always addressed the real needs of our communities, but we need to make sure that we keep the lights on in New South Wales, and that is what this bill will do.
We need to put downward pressure on electricity prices, particularly when people are really struggling with the cost of living, and that is what this bill will do. We need to make sure that we address the global challenge that is climate change and meet our targets of net zero emissions, and that is something to which this bill will contribute. By creating the investment pathway, we are investing in jobs for the future for New South Wales, particularly in regional communities, and we are investing in a brighter, healthier and safer future for children and for generations to come. I commend the bill to the House.
Mr ALEX GREENWICH (Sydney) (18:05):
:49 I support the Electricity Infrastructure Investment Bill 2020, which gives New South Wales the best chance it has ever had to develop a modern, reliable and environmentally responsible electricity system. I commend Minister Kean and the New South Wales Government for their leadership in delivering this legislation and acknowledge the contributions of the member for North Shore and the member for Manly, who are members of the committee inquiring into energy sustainability in New South Wales, a committee that I chair.
Coal has long powered New South Wales communities, but burning coal for electricity produces significant greenhouse gas emissions that are driving dangerous climate change. It also poisons the air, water and land. While we still source almost 80 per cent of our power from coal, four out of five coal-fired power stations in this State will close in the next 15 years and there is now an abundance of affordable, reliable and green electricity alternatives to move ahead with. Electricity provides one of the easiest pathways to cutting large volumes of greenhouse gas emissions. Technological advances in renewable energy have seen its price drop and its reliability go up. Solar and wind power are now the cheapest forms of new power generation—cheaper than coal; cheaper than gas. Battery technology development has made renewable energy available when there is no sun or wind, or when the grid needs supplementation. But we need strong policy and legislation to make the switch because there are challenges that the market alone cannot resolve.
The transmission network is at capacity and new infrastructure needs to be coordinated with new generation. Without a plan, the private sector will see investment as a risk. The renewable energy target demonstrates the potential of good energy policy. The target cut greenhouse gas emissions in the Australian electricity market by 26 per cent on 2005 levels and propelled a renewable energy boom that supported jobs, technology and declining energy costs. The target gave clear signals to energy providers on the required mix of electricity sources in the market resulting in strong investment. But that investment has stalled with the expiration of the target, especially in the transmission network, and I hope that this bill and the policy that underpins it will not only fill the void but set up a clean electricity system for the State's future.
The bill will deliver a massive boost in renewable energy generation and sets up a framework to encourage more renewable energy investment beyond legislated goals including by making sustainability a statutory object of the State's electricity plan. I believe the bill could be stronger in its bid to shore up new firming infrastructure to guarantee that the most sustainable long-term options are implemented. Climate change leaves us no choice but to drastically cut our emissions. The State Government has committed to reaching net zero emissions by 2050 and this aim must be a priority in reshaping the electricity system. I foreshadow that I will move an amendment at a later stage to allow a standing or special committee which under the bill can be established to advise the Minister on relevant matters, to provide advice on strategies in the electricity sector to help achieve net zero emissions by 2050. The transition to a clean, green electricity supply will not cause any disruption for the vast majority of people, but risks of economic shock exist for communities in which a power station is a major employer and part of the community.
There are responsible and irresponsible ways to close a power station. Closure of the Hazelwood coal-fired power station in the Latrobe Valley in Victoria is an example of how not to do things. There was little preparation and now 25 per cent of workers who did not retire remain unemployed. By contrast, Germany's targets to increase renewable energy share to 65 per cent by 2030 and 80 per cent by 2050 drew support from former power station workers because they were involved in planning, investment, retraining and income compensation through the Commission on Growth, Structural Change and Employment. The skills of coal-fired power station workers can be transferred to meet the requirements of renewable jobs as well as jobs in other industries like manufacturing or power station and mine rehabilitation. But for this to happen, early preparation, coordination and consultation is needed. Some power stations are taking initiatives that build resilience in their workforce and local economies before they close but not all are.
We need a dedicated body to look at jobs investment, transferable skills, skills gaps and retraining in order to prevent a shock in the regions before coal-fired power stations close. The body should work with employers, employees, community representatives and unions to ensure that no-one is left behind. I will move an amendment at a later stage to allow for a standing or select committee to look at the transition for workers and communities impacted by the changing energy supply. We have to bring communities in new renewable energy zones and those adjacent to renewable generation and transmission infrastructure projects with us on this journey if we are to deliver a modern and sustainable energy supply. Large renewable energy products can attract opposition from residents and farmers due to impacts on tourism, property values or agriculture. We need to engage with affected communities and look at solutions to address their concerns while ensuring that renewable energy can be delivered. Perhaps the narrow definition of "lowest economic cost transmission planning" could be broadened to favour developments that are not in towns or on prime land, and can therefore be fast-tracked to make them more efficient in the long term.
We need to be mindful that most renewable and transmission capacity in this State is on land that belongs to traditional owners. They must also be engaged in any infrastructure planning process. Community and traditional owner engagement in renewable energy zones and large renewable energy generation and transmission products could be a role for the consumer trustee or the infrastructure planner. I ask the Minister to address in his reply how the Government will ensure that local communities will have input. I acknowledge that the member for Wagga Wagga has put forward an amendment addressing this concern.
Human-induced climate change is making the planet uninhabitable. We need a plan to get to 100 per cent clean energy that phases out coal. We know from the Intergovernmental Panel on Climate Change that we must cut carbon emissions by 45 per cent on 2010 levels by 2030, with net zero emissions achieved by 2050 to limit warming to 1.5 degrees Celsius. This requires far-reaching, rapid and unprecedented changes in all aspects of society. While a major challenge, there are substantial social, economic and environmental benefits to taking this action, and these are most obviously seen in transitioning our electricity network to a renewable base. The widespread community support for greening the energy supply is reflected in the large number of submissions from members of the public to the inquiry into the sustainability of energy supply and resources in New South Wales, especially from people living in regions with coalmining and coal power generation.
Coal power cannot be the future because of its role in climate change. The world is fast shifting to other forms of energy, and it is predicted that by 2050 coal will supply only 12 per cent of the world's power. I welcome the long-awaited catch-up that comes with the bill, and I congratulate the Minister on this landmark, forward‑thinking legislation. The electricity policy area has been fraught with scaremongering that has stalled progress for too long. In what has been a tough year, it shows maturity from members of Parliament that these reforms can be achieved with multipartisan cooperation. I commend the bill to the House.
Mr DUGALD SAUNDERS (Dubbo) (18:13):
:58 As the member for Dubbo it is a great privilege to speak in support of the Electricity Infrastructure Investment Bill 2020, which was announced at the "Festival of Dubbo" on Monday. A number of Ministers joined me to also announce the Electricity Infrastructure Roadmap, including the Minister for Energy and Environment, the water Minister, who was there to present opportunities in the pumped hydro sector, as well as the Treasurer and the Deputy Premier. The bill will enable the Government to deliver cheap and reliable electricity for businesses and families across New South Wales. The Nationals are the voice for rural and regional New South Wales in government. We fight to make sure that our communities are heard and supported and that the policies created in this place deliver a good outcome for those people.
The bill and the road map it will enable is a bonanza for the bush. The plan is designed to rev up our regions, delivering 9,000 jobs and $32 billion of private sector investment by 2030. It will deliver an average electricity bill saving of $130 a year for households and $430 a year for small businesses between 2023 and 2040. Importantly, it will also provide regional communities with a voice, ensuring that renewable energy infrastructure is only developed where it is wanted so as not to impact valuable agricultural land. We know that regional incomes and economies have been hit hard by the unprecedented back-to-back challenges of the recent drought, the summer bushfires and the COVID-19 pandemic. This road map will provide an invaluable opportunity for our farmers to diversify and droughtproof their incomes, with more than $1.5 billion of lease payments expected to flow to farmers hosting new infrastructure on their land by 2042.
I am particularly pleased to support the bill because of the tangible benefits it will deliver for regional communities across our great State and the local job and investment opportunities it will bring for my community. As I mentioned, on Monday we released the Electricity Infrastructure Roadmap in Dubbo—the heart of the Central West, the capital of western New South Wales and home to the State's first pilot renewable energy zone [REZ]. This zone will deliver 3,000 megawatts of new transmission capacity, which is enough to power about 1.4 million homes. Work on the Central-West Orana REZ is well underway. Over $40 million of funding has already been announced to support the development of the pilot. The Government also recently put out a call for developers to register their interest in the zone. To put it simply, the response was overwhelming. Proposals that will generate 27,000 megawatts have been registered for the region, potentially worth about $38 billion in new private capital investment. Interest is already nine times the capacity needed to make this REZ a reality.
If it was left to existing market signals, the investment required could come too late to prevent things like price spikes and reliability issues, or it may not come at all. Our regulatory and market frameworks are not set up to enable the private sector to deliver the renewable energy zone infrastructure we need within the necessary time frame or at the requisite scale. Transmission projects have long lead times and can take many years to develop. The delivery of transmission and generation projects needs to be coordinated to make sure they scale efficiently and deliver long-term benefits for the communities that host them. Generators also need certainty of revenue to act as a buffer against the risks of congestion on the network to secure the cheapest possible finance, and this bill helps create a framework that provides that certainty. It overcomes these barriers to deliver the Central-West Orana Renewable Energy Zone and other REZs when and where they are needed and where regional communities want them.
The bill introduces an access scheme that will offer more certainty for investors when committing to projects in a renewable energy zone. It also introduces the Electricity Infrastructure Investment Safeguard, which is a key component of the road map that provides an investment signal to deliver the new electricity infrastructure that New South Wales needs. The safeguard will ensure that new energy infrastructure in REZs ramps up the benefits for consumers at the lowest cost by encouraging new low-cost generation. It also introduces an infrastructure planner and a consumer trustee to support this process. The Central-West Orana REZ will build on a detailed feasibility study being carried out by TransGrid, for which the Australian Renewable Energy Agency will contribute up to $5 million.
The bill will also support the implementation of the Australian Energy Market Operator's 2020 Integrated System Plan, which identified the Central-West Orana REZ as a priority actionable project. As the member for Dubbo and personally, my interest and commitment has been around ensuring that our regional communities are the beneficiaries of these renewable energy zones and this road map. That includes not just the tangible benefits around the planning agreements and the grant money that will flow from the projects that support our local communities but also the community acceptance, or not, of any proposed project, as I mentioned earlier. That is important. It is about making sure that locals have a proper say on whether solar, wind or pumped hydro will go ahead in their community and where and when. It is about local voices; it is not just about developers. In very simple terms, the bill enables the New South Wales Government's Electricity Infrastructure Roadmap. It delivers jobs and investment and, more importantly, it delivers cheap, reliable electricity for homes and businesses in every corner of the State. I commend the bill to the House.
Mr PAUL SCULLY (Wollongong) (18:20):
:30 In the last three or so contributions to the debate on the Electricity Infrastructure Investment Bill 2020 we have heard about some of the disparate issues in the bill and the challenge around the transformation of our energy generation and transmission system in New South Wales. The member for Swansea represents an energy generating electorate in the Hunter and Central Coast that has a long history of powering New South Wales. She recognises that her community faces a real risk of not having jobs in the long term. The member for Sydney is very passionate about addressing climate change, as his constituents are and many of our constituents are. He says that his constituents would welcome this bill. He also showed a degree of empathy for some workers who will be at the vanguard of this change. The member for Dubbo in the Central‑West Orana Renewable Energy Zone is here for his community, and rightly so. He is talking up the opportunities that come from not only the direct generation but also the construction of the generation capacity, its use and the potential attractiveness of related industries.
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I come from the Illawarra. I represent Wollongong, the only steel-generating region in New South Wales. When I woke up yesterday morning and saw splashed across the front page of that this bill was going to come with a steel mandate—that the New South Wales Government was finally going to recognise that Port Kembla produces the best steel there is and that it was going to be used in the renewable energy zones and the renewable energy future of New South Wales—I was quite impressed. I thought, "This is a real opportunity for the Illawarra." Last night, less than 24 hours ago, when the Minister got to his feet and went through a lengthy second reading speech, I was poised and ready to hear about this steel mandate, what it might mean and what opportunities might come from it. In his speech and in the 47 pages of the bill there is not a mention of steel, there is not a mention of aluminium, and there is not a mention of mandate: no steel, no aluminium, no mandate. The rhetoric of the Minister was not matched by the legislative framework that he introduced to the House.
The Illawarra community sits in stark contrast to the Central West and other communities who are set to benefit from the construction activity and the ongoing albeit only 2,800 jobs associated with renewable energies. It is for that reason that NSW Labor will move a series of amendments to this bill requiring local content, the establishment of a board to consider and develop local content requirements and a jobs advocate to support those communities who are also left out: the Hunter and Lithgow. These are huge energy-generating areas that have been largely lost in this region. We do this because the bill focuses on energy-related sectors, but it does not contain the steely legislative resolve that I want to see to match the Minister's rhetoric around steel.
The objectives of the bill are far reaching and represent a substantial investment in electricity generation and transmission. NSW Labor believes that all of New South Wales can share in the benefits of the manufacture of this renewable technology, especially the regions. The amendments we propose make sure that no region or community is left behind. They will all have a share in the renewable energy zones and associated activity that is identified and established in the bill. While Labor members support the overall direction of the bill in principle, we are concerned the Government appears very hasty in trying to ram the bill through the Parliament.
Our bottom line is that we want cheap, reliable, sustainable energy generation because it supports jobs in manufacturing communities like the Hunter, the Illawarra and western Sydney. It benefits households throughout New South Wales. But while that is our absolute aspiration, we also want to squeeze every possible job from this generation of transformation. More importantly, we want to support regions where jobs and workers and their families are at risk. We do not want to see them left behind. As a Parliament we want to see this big proposed investment have a big dividend for jobs and for taxpayers, who are forced to underwrite this over the next two decades.
The regulatory framework proposed in the bill is assessed for the risk. The risk is acceptable and appropriate. It provides new power generation required to keep the lights on in New South Wales and in energy-dependent communities. It will share the economic and job benefits across the regions and the generation and transmission of electricity will be cost effective while reducing emissions. As I said earlier, I represent the only remaining steel-producing region in New South Wales. In 2015 the outlook for the steel industry was dire and there was a big threat that the Illawarra may stop making steel as it had for nearly 100 years. That would have meant 3,000 direct jobs and around 10,000 other jobs gone. For each $1 million of steel sold through BlueScope, $1.8 million is injected into the New South Wales economy. I acknowledge former Premier Bob Carr, who is in the gallery. He has been a huge supporter of the steel industry in the Illawarra over many years. We probably would not have a steel industry in the Illawarra had it not been for the actions of a Premier who had the foresight to understand that we can protect the environment and support jobs at the same time. I am glad he is here to hear some of this debate.
The impact on the Illawarra if steel had disappeared would have cut more than $2 billion a year in gross regional product. We would have become the Detroit of Australia. Local workers made sacrifices and New South Wales brought forward bills because we wanted to see our steel made in New South Wales—the best steel—in every road, bridge, school and hospital in the State. We also want to see it in every renewable energy project. We proposed a bill to make that happen and the Government opposed it on five separate occasions. It appears in the media headlines that there might be some movement on this. I welcome the fact that Minister Kean has been actively speaking to Labor about this issue and making sure that we can do this. I welcome the contribution of the affiliated and affected unions in this case. They have helped Labor develop a set of amendments that we think will be acceptable to the Government and importantly will not leave interventions and local content requirements to chance or to the whim of future governments or individual Ministers. They will be L-A-W, law.
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We believe our amendments will give life to what BlueScope Chief Executive Officer Mark Vassella said in on Tuesday, which was that there could be a manufacturing renaissance in New South Wales and the $32 billion spend should see the creation of a substantial number of skilled manufacturing jobs and ensure local steel for local infrastructure. The reason I know this is I have been working with BlueScope on a plan similar to this for some time. Since I have been the shadow Minister for Natural Resources I have been saying for a long time that our emissions reduction objectives should be seen through the framework of industry policy, infrastructure policy, workforce skills and training policy and cost of living policy as well as environmental policy.
It is not just environmental policy. It is not just climate change policy. This is about the future of the economy and the future of opportunities not only in the new areas where energy fuel will be generated but also in the areas that have propped up energy generation in this State and country for decades and have cost the lives of miners. These are people who work hard in dirty jobs; the ones who shower after work, not before work; the ones who have made sure that the lights have stayed on and that our manufacturers have had energy available to them.
Extension of time
Let us not be fooled into thinking there is a false choice between renewables and resources, because renewables need resources. That is why it is important that areas such as the Hunter and the Central Coast and their workers are not left behind. Labor will move an amendment to the bill to include those areas in the renewable energy zones. It is important that areas such as Lithgow, which saw the closure of the Wallerawang Power Station and the Angus Place Colliery in late 2014 and has not had any support since then for the 600 jobs that were lost, are not left behind. Labor wants to make sure that opportunities are spread right throughout the State and that is why we will move our amendment. 
This bill represents the most important change to energy generation in New South Wales that we have seen for several decades and probably the most important change that we will see for many decades. That is why I caution that we hasten carefully. At the beginning of my remarks I indicated that it appears the Government is in a rush to get this bill through Parliament in the final two sitting weeks of the year. Any time a government seeks to get legislation quickly passed through Parliament, it should always ring alarm bells for members because it is often the case that something will be missed. In the original version of this bill, the much vaunted steel procurement and support for regions such as the Hunter and Lithgow was missed. There are substantial risks to taxpayers as the Government underwrites these renewable energy assets.
Australian Financial Review
I put on record my concern about the operation of the electricity infrastructure fund and how much it might expose energy consumers to in the future. On Tuesday the published comments from a range of energy stakeholders, who basically said that the New South Wales energy plan transfers risks to consumers and taxpayers. That is something that we must take into consideration as we look at this bill and consider any amendments to it. We want to make sure that we get it right, and not just so that we have an energy generation capacity in New South Wales that is fit for the future and ready to go. It is important to recognise that coal‑fired power generation will not close overnight, but through time those ageing assets will move out of the system. It is important to recognise the need to get the risk‑sharing arrangement right for the future, because if it is wrong it will be wrong for potentially a very long time and it is a very costly measure.
We want to make sure that large energy consumers that employ thousands of people in New South Wales have a fair chance at getting low‑cost energy in the future to support and maintain those jobs. Because Labor ultimately is about jobs and workers, we want to make sure that workers in mining communities and in our existing power generation industry are not left behind and that they are supported. We want to make sure that the benefits are not concentrated in the three areas—or, if the Government accepts Labor's amendment, the four areas—that are our renewable energy zones. Areas such as the Illawarra and western Sydney can manufacture the components. If businesses are given investment certainty so that they can invest and scale up, they will be able to contribute as well. They will be able to benefit and build jobs. They will be able to employ people and make sure that people can put food on the table and pay their mortgages.
Those jobs are not only important for making sure we have good employment in high‑paying and secure jobs in the future. They are also important for making sure that we can harness the manufacturing renaissance that the road map could achieve and reorient our economy to import replacement industries and export‑oriented industries. That will make sure that we grow even stronger. If areas such as the Illawarra, western Sydney, Newcastle and Lithgow have hundreds of jobs for people to choose from, kids will not have to move away from their communities and those communities will not be left hollowed out with a group of older people who have retired from the workforce while younger people cannot find a job. We have to make sure that we do this properly. While I foreshadow caution and consideration of the provisions of the bill, I strongly encourage the Government to adopt the amendments proposed by Labor to make sure all regions in New South Wales—particularly our traditional manufacturing powerhouse regions such as the Illawarra, the Hunter and Lithgow—have a fair stake in the New South Wales power generation and transmission of the future.
TEMPORARY SPEAKER(Mr Greg Piper):
As the member for Wollongong made passing reference to the visit of former Premier the Hon. Bob Carr, it is worth noting for the record that the former Premier briefly joined us in the House tonight to look in on this most important debate for the people of New South Wales. I note that he is not yet on his way to the football.
Mr PETER SIDGREAVES (Camden) (18:35):
:55 As the member for Camden I am pleased to speak briefly in support of the Electricity Infrastructure Investment Bill 2020. I support the bill because it will deliver cheaper electricity for our families and small businesses. Our prosperity and way of life in New South Wales is underpinned by access to cheap and reliable electricity. It powers our homes, our small businesses and our heavy industries that employ many hardworking people in New South Wales. This bill and the NSW Electricity Infrastructure Roadmap lay out our Government's 20‑year plan to modernise our electricity grid and power our economy in the future. The roadmap is focused on delivering the energy infrastructure that would generate cheap and reliable electricity, create jobs and recharge our local industries.
By 2030 our plan is expected to deliver 9,000 jobs and $32 billion worth of private investment for our regional communities. It will provide an invaluable opportunity for regional landholders to diversify and drought‑proof their incomes, with more than $1.5 billion in lease payments up for grabs for regional landholders that host renewable infrastructure by 2042. Importantly, it also ensures renewable energy infrastructure is only built where our regional communities want and welcome the projects. The people of New South Wales have faced unprecedented back‑to‑back challenges: first the drought, then the catastrophic summer bushfires and now the COVID‑19 pandemic. This bill will deliver cost‑of‑living benefits for our citizens—and the citizens of the Camden electorate—with households expected to save an average of $130 per year and small businesses an average of $430 per year on their electricity bills between 2023 and 2040.
This is a game changer for the State of New South Wales. It puts us in pole position to be a national leader in renewable energy generation, storage and transmission and makes sure the people we represent—the people of New South Wales—reap the benefits for generations to come. This bill, and the road map it enables, will deliver jobs and investment and will cement our State as an energy and economic superpower. Most importantly, it will deliver to homes and businesses in New South Wales some of the cheapest electricity in the world. It is now more important than ever to pursue productivity reforms like the one before us today. In summary, this bill will deliver cheaper electricity for families and small businesses while keeping the lights on. It will grow the economy, create jobs and support the regions. For these reasons I commend the bill to the House.
Ms JODIE HARRISON (Charlestown) (18:39:25):I too wish to contribution to debate on the Electricity Infrastructure Investment Bill 2020. I do so because of the necessity, which we have known about for some time, to chart a pathaway from total reliance on fossil fuels and towards renewables as a significant source of energy production. A few nights ago on the ABC, former Prime Minister Malcolm Turnbull correctly referred to climate change as a matter of physics and economics. He said that refusing to accept climate change is akin to refusing to accept gravity. We need to make changes to the way we generate, storeand distribute power in this State.We know that this will pose substantial challenges and the dangers inherent in any plan that excludes many in our communities.
I join with my colleagues in offering conditional support for the intention of this bill, which is to make renewables a key aspect of electricity generation, storage, firming and transmission. For the Government to acknowledge that it has to act to secure our energy future is noteworthy. But I have serious concerns about the legislation in its current form, as was outlined by the Deputy Leader of the Opposition, the member for Swansea, and the member for Wollongong.The Charlestown electorate is in the Hunter. I note that the renewable energy zones outlined by the plan—the New England Energy Zone, the Central West Energy Zone and the South West Energy Zone—are to be based around Armidale, Dubbo and Hay respectively. The plan excludes the Hunter, a region with a long history of manufacturing and energy production and a region where a substantial number of jobs will be impacted by a shift to renewables.
The lack of a plan for jobs for the future when stepping down an industry can be catastrophic for families and communities. We need only look at former mining communities in Wales, the north of England and Scotland to see how devastating the lack of a plan canbe. The decisions taken by the United Kingdom Government in the 1980s, closing coalmines without adequate support for impacted workers and communities, can now be seen to have entrenched multi-generational unemployment and poverty in these areas. We must avoid outcomes like those experienced in the United Kingdom at all costs.
The Holy Grail of moving from fossil fuels to renewables has always been "jobs for the future." We need to ensure living standards and economic opportunities for workers in affected industries are continued. This is difficult to do. Few overseas jurisdictions have managed to successfully thread that needle. I am concerned that the current legislation, whilst making positive steps in terms of developing renewable energy infrastructure, will leave impacted workers behind.
I do not want to see a repeat of Thatcher's Britain in Newcastle, Lake Macquarie and the surrounding region. I do not want to see workers in the Charlestown electorate and the broader Hunter Region shut out of the jobs of the future.But there is more to it than that.With the CSIRO, the University of Newcastle and a strong crop of local innovators and entrepreneurs in the area, the Hunter Region is already primed to be at the leading edge of this change. Our State cannot afford not to harness that expertise and potential.Peter Jordan, President of the Construction, Forestry, Maritime, Mining and Energy Union, expressed similar concerns to the Newcastle Herald, saying that there was nothing in the legislation about the future of power workers and their communities.
In an editorial on the topic, the Newcastle Herald pointed out the strangeness of a Coalition Government, which supposedly lives by a free market mantra, failing to let the businesses involved decide where the infrastructure goes. Instead,this Government seems willing to be picking economic winners and losers based along political lines, trying to fight off challenges in the bush from rural Independents and the Shooters, Fishers and Farmers Party.In its current form, I do not think the legislation can be seen to be anything but. The Hunter deserves better than that. The workers and communities that have been the powerhouse of this State's economy since its founding deserve better than that.
With the Premier's comments earlier this year which totally dismissed the Hunter's manufacturing capabilities, I am left to assume that perhaps the Government doesnot know about what the Hunter can achieve in this area. I call on the Government to include the Hunter region and Hunter communities in this plan, to recognise what we have achieved in the past and what we can achieve in the future. I note the very high potential for significant positive employment impact if this plan is implemented in the right way. Mr Jordan told the Newcastle Herald, "The Government claims this roadmap will create 9000 jobs but most are only in construction and only 2,800 would be ongoing."This is a significant concern. If this Government cannot build the jobs of the future, if it cannot build on the economies of towns which may well be devastated by a change, what hope can the people of this State have in this Government? What chance is there of buy-in fromthe affected communities?We need to be smart about this.
I hope that the Government accepts the amendments being proposed by the Opposition. The Opposition's "made in New South Wales"bill and the underlying policy behind it is a clear pathway to addressthese concerns. Putting in place procurement requirements that demand the purchasing of local materials, the hiring of local labour and the utilisation of local expertise will build local economies all over the State.I agree with my colleague the shadow Minister for Innovation, Science and Tertiary Education andshadow Minister for the Hunter, the member for Cessnock, who earlier this week told the Newcastle Herald:
It's imperative the Government maximise the use of locallymade equipment in this process, rather than their usual relianceon off‑shore products that cost Australian jobs, often fail and don't save money.
This is a chance for this Government's demonstrated ideological inconsistency, as the Herald's editorial picked up on, to do some good. I know the Government is generally opposed to this sort ofeconomic stimulus, to building jobs and economies in that manner, but the extraordinary challenge posed by climate change and the need to look at the future of energy production justifies taking unorthodox steps. The Minister has talked well on this issue so far but there seems to be little detail about it in the legislation and no guarantees. The Government knows this sort of policy is popular and it wants to play into that popularity but without guarantees, without legislation to back it up, all that talk will come to nothing.Procurement requirements that emphasise the use of local materials, local labour and local know-how need to be enshrined in legislation.
Another serious issue that needs to be addressed is howlong the Government has been dragging its feet on this matter.Mount Piper Power Station has the longest lifeexpectancy of any of our power stations and it is due to go off-line in 2042. That leaves us less than 22 years to fundamentally shift the nature of energy generation, storage and transmission in this State.It took 23 years from the 1949 start of construction on theSnowy Mountains scheme until its 1972 opening. Because of this Government's inaction, New South Wales will be racing against the clock to ensure our energy future. We donot have any more time to waste. We need to get this rightnow.
If it is done right, the legislation has the potential to build the industries of the future in our State. If it is done right, the legislation has the potential todeliver jobs, and lots of them, and to secure our energy grid forthe next century.We need to ensure that this legislation lives up to that potential.I call on the Government to ensure that that happens by including the Hunter as a renewable energy zone and enshrining job-building procurement requirements in legislation. Let us end destructive and pointless fights over energy and climate policy; let us do it fairly, justly and responsibly.I join with my colleagues in the conditional support of this legislation. I certainly hope that the Government accepts the amendments being proposed by the Opposition so that we can get this legislation right. We are running out of time.
Mr MICHAEL JOHNSEN (Upper Hunter) (18:49):
:16 I will give a short speech at this point in support of the Electricity Infrastructure Investment Bill 2020. I foreshadow that I will be moving amendments to this particular bill at the appropriate time. I completely and utterly support the bill on the basis that I am well-known for my support of my electorate and its mining industry. I also support all forms of energy generation that provide security and cost-benefit to everyone, whether it be households or businesses that ultimately employ so many people indirectly from the energy and mining industry.
It is well-known that in my electorate the Liddell Power Station will be closing in a couple of years and Bayswater has been flagged to close a few years after that. We need to ensure that we replace the energy generation and dispatchable power that is available to New South Wales. Importantly, we have many hundreds of workers directly involved in those power stations. If my amendments are supported by the House, the bill will provide electricity workers with long-term job security and a strong future in the Upper Hunter—indeed, right throughout the Hunter and Lake Macquarie regions. I will speak further when we move the amendments.
Mr DAVID HARRIS (Wyong) (18:51):
:11 I speak in debate on the Electricity Infrastructure Investment Bill 2020 and endorse the position that was put by the shadow Minister, the member for Swansea. We have discussed this issue at length. Tonight I will particularly talk about the proposal to make the Hunter and Central Coast a renewable energy zone as well as a targeted jobs area. For members who know the Central Coast—Mr Temporary Speaker, coming from that area you know it very well—we have been part of the backbone of energy production in this State for decades. Many people who live in my electorate are either employed directly in the power industry, have family members who are, or they support industries for power stations. At Soldiers Beach Surf Life Saving Club I patrol with many members who have had a history in the energy sector.
Obviously in recent times we have gone through the closure of Munmorah Power Station, which was originally commissioned in 1967 but closed in 2012. A little bit up the road from there is Vales Point, which at the moment is due to close in 2029, and of course Eraring is due to close by 2032. All of those dates are coming very quickly, and there is going to be a real issue around future jobs in our area. Making the Central Coast and the Hunter part of a renewable energy zone makes sense. It gives an opportunity to transition those jobs from the power industry to jobs in renewable energy. When those power stations close we will have those sites that can be used. It makes sense that they continue to be used for power generation.
Our community is growing and it is really important that we get that investment in jobs. In my electorate we are seeing huge growth in residential housing. Unfortunately, while there is some job growth it is not occurring at the rate that it needs to so that we can keep offering people local jobs. This is an opportunity. I have been a long-term supporter of renewable energy. Moving forward, it will create opportunities for New South Wales in energy generation as well as continuing to support manufacturing. When we develop new areas we have to put in new transmission, which comes at a cost. One of the bonuses of that Central Coast‑Hunter area is the fact that all the transmission lines are already in place; it is actually a cheaper way of doing business.
NSW Electricity Infrastructure Roadmap
I have read the . I am generally supportive of what is being put forward and the fact that regional jobs will be created in those areas already identified as renewable energy zones. As the shadow Minister for Aboriginal Affairs, I hope there is an emphasis on employing young Aboriginal people and skilling them in that particular area. In his reply it would be great if the Minister would make a commitment to Indigenous employment in those areas. It is absolutely vital that those young people can see a future close to their homes and on their country, and that they have opportunities to get well-paid, significant jobs close to where they have grown up and went to school so they are not forced to move away.
I know that in our area on the northern part of the Central Coast we have become very used to having those power stations operating. Unfortunately they do not employ as many people as they used to. Through the implementation of technology the number of jobs has dropped. To give members an idea of some of the issues—it is a negative-positive, in a way—we have got the Colongra gas-fired power turbines next to the old Munmorah site. When they built that a lot of people were involved in construction, but now it basically employs around three people who do the cleaning et cetera. It has a control room, but it is controlled by someone using a laptop in Sydney because it can be turned on and off when needed. We used to have thousands of people employed next door at Munmorah. Those numbers dropped off as the technology improved. Munmorah shut down and then we had the new turbine—which is a good thing—but the number of jobs involved with that have dropped significantly. Members have to recognise that as this transition happens we have to create new opportunities for people to be employed.
The fact that the Government is pushing forward with this road map looking into the future is a positive, and I thank it for that. For a long time those industries had a finite life and people were really struggling with what would come next, because there was no future road map. As the member for Swansea, the shadow Minister, said in her contribution, NSW Labor took a policy to the last election that was looking at that forward thinking. It is good that the Government has incorporated some of the ideas that were part of that policy and added to them. As these things evolve, particularly around pumped hydro, we can find better ways of doing business.
If we want to remain a major manufacturing State then we have to have reliable energy. It does not come from thin air. It has to be reliable and it has to be on call all the time, because those industries operate 24/7. The bill will give this industry a lot of comfort. It is probably a shame that we are not seeing the same leadership at a Federal level and there are still not very good signals for business investment moving forward, but it is good that those issues are being addressed at a State level.
I support all the amendments that are being put forward by the Opposition. I will not go through those now, because I know that other members will speak about those in this Chamber tonight. I want to put fairly and squarely on record that there is a need to have the Hunter‑Central Coast as part of a renewable energy zone and a targeted jobs area. Unfortunately, the Central Coast was left out when the State nominated some of the strategic employment zones. That was a lost opportunity. On Friday I will speak at the Central Coast chapter of the Urban Development Institute of Australia. I will talk about opportunities for the Central Coast to have at least two or three nominated zones or to have the Central Coast nominated as a zone overall. There are some good employment opportunities and private businesses that want to invest. It is a great opportunity, particularly given the opening of the NorthConnex and the development of the transportation link with north-western Sydney.
I went back through the census. In 2016 some 1,554 people were still employed in the energy industry on the Central Coast. As I said, that has dropped down a long way from earlier days but technology was always going to impact it. Those 1,554 families will take some comfort from the fact that there is a road map but will derive more comfort if the Central Coast is included as one of those renewable energy zones. I hope the Minister will consider carefully that suggestion from the Opposition. As I said, the transmission towers are there and the land is there as the power stations close. It is an economical opportunity that the Government should look at carefully to support jobs on the Central Coast.
Mrs MELINDA PAVEY (OxleyMinister for Water, Property and Housing) (19:01):
—:12 I am pleased to speak in support of the Electricity Infrastructure Investment Bill 2020. I acknowledge the respectful contribution of the member for Wyong. He addressed well the role of the Central Coast in providing electricity to the people of New South Wales over many decades and he acknowledged that the bill is a good move by the Government. The bill will give effect to the NSW Electricity Infrastructure Roadmap—a coordinated and integrated plan to deliver an affordable, reliable and sustainable energy future for New South Wales. I acknowledge the work of the Minister for Energy and Environment in developing the road map, which will drive down electricity prices, provide opportunities for new manufacturing across New South Wales and the regions, and create thousands of jobs in the process.
I am pleased to support the bill and the road map because they will provide incredible opportunities by harnessing our world‑class natural resources and by futureproofing our regions. As the water Minister, I am proud of the road map's opportunities for pumped hydro, in particular. Four of our five power stations will come to the end of their lives in the next 15 years so we need to modernise our grid now in a way that delivers for regional New South Wales. The Australian Energy Market Operator has projected that New South Wales will need nearly 2.3 gigawatts of new energy storage projects to maintain system security and reliability in addition to Snowy 2.0. Renewables provide cheap electricity when it is sunny and windy. However, we need storage solutions like pumped hydro to back them up and keep our grid reliable.
Pumped hydro works like a big battery: Water is pumped uphill when electricity supply is abundant and released downhill through turbines that generate electricity on demand when we need it the most. Since 2018 the New South Wales Government has been working with the private sector to develop renewable energy and storage projects with WaterNSW dams across the State. That program provides an opportunity to maximise and diversify the use of our dam infrastructure, delivering not only better energy security but also better water security. The Government is supporting three pumped hydro projects through the Emerging Energy Program. Grant funding is going to those projects to undertake critical planning and feasibility studies.
Last month the New South Wales Government declared one of those projects—the billion‑dollar Oven Mountain Pumped Hydro Energy Storage project—to be critical State significant infrastructure because of its importance to the State's future energy supply and its capacity to generate reliable, renewable power. Using almost $2.5 million in Government funding, the Oven Mountain project is assessing the commercial, engineering and operational potential to build an off‑river, closed‑looped pumped hydro storage site. The project will add 600 megawatts of on‑demand capacity to our grid and provide up to 600 direct and 1,500 indirect regional jobs within the northern New South Wales region. The project will also inject more than $1 billion of investment into our regions. As the member for Oxley, I am particularly happy about that.
I pick up on a point made by the member for Wyong. There is a very strong desire from our Government to include Aboriginal employment and opportunities, particularly for the Oven Mountain project located midway between Kempsey and Armidale—10 kilometres within the electorate of the member for Northern Tablelands. The Thungutti land council has been meeting with the proponents, which is a positive step forward. It is on private land but there will be job opportunities for the future. Certainly we want our local communities to benefit from that, to be trained and to be part of this new generation of electricity in New South Wales.
A key advantage of the Oven Mountain project is that it is a closed‑loop project that pumps water between two new reservoirs. That means no rivers are dammed or diverted and it ensures that sensitive ecosystems and natural water flows are protected. As water Minister, I advise that we are looking at a special activation licence that will require water but on a one-off basis. That water will be used over and over again. If we have a drought like the State experienced last summer, when Kempsey and many communities on the mid-North Coast came very close to running out of water, that would be an additional water source we could tap into. The proponents have made that suggestion.
The bill recognises that long‑duration storage projects like pumped hydro are critical to replacing retiring power stations over the coming decades. Pumped hydro projects can make a substantial contribution to New South Wales' future electricity storage needs but they require bespoke design, face long lead times of up to eight years and are capital intensive, which creates a high barrier to their development. Given those barriers, the bill establishes an important framework called the Electricity Infrastructure Investment Safeguard that will make sure adequate storage is in place before the closure of existing power stations. The safeguard will provide the certainty the private sector needs to invest by running competitive processes to award long‑term energy service agreements to long‑duration storage projects like pumped hydro.
The bill and the road map it enables will see two gigawatts of long‑duration storage built in New South Wales by 2030. That objective will kickstart a decade‑long jobs and investment boom in the bush. Some $50 million will be up for grabs for pumped hydro projects as part of the 2020‑21 New South Wales budget. Those grants will play a key role in providing the certainty the private sector needs to invest now. They will help to create a pipeline of shovel‑ready pumped hydro projects and to improve competition for long‑term energy services agreements. Unlike traditional grant programs, the program will operate by recovering grants paid to proponents when the project reaches a certain stage of development, such as when the project reaches financial closure or development rights are sold.
The recoverable grant model seeks to support projects during their high‑risk early development stages but also to allow the New South Wales Government to recycle the funds into other projects in the future. The bill includes amendments to enable recoverable grants under the NSW Climate Change Fund. The pipeline of projects supported by the grants program will then be able to compete for long‑term energy service agreements. Our Government's priority is the provision of cheap, reliable electricity for households and businesses across the State. Our cheap, reliable energy grid of the future will comprise a mix of technologies, from rooftop solar through to large‑scale pumped hydro projects. The Electricity Infrastructure Investment Bill gives us the clear framework we need to deliver that grid in a way that lowers power prices, keeps the lights on and delivers tangible benefits for the people of New South Wales. We expect around 6,300 construction jobs and 2,800 ongoing jobs to be created by 2030 off the back of the road map. Landowners who host infrastructure projects will also receive lease payments for doing so, helping to drought‑proof farmers by diversifying income streams.
It is estimated that that will amount to around $1.5 billion in landholder lease payments for farmers by 2042. That scale of job creation and investment is a no‑brainer as our regional communities and economies recover from the consecutive challenges of drought, catastrophic bushfires and the COVID‑19 pandemic. I also point out that, as the Minister in charge of Crown lands, I am supportive of my agency looking at the potential for transmission through some of the stock routes so that we can get income to maintain them, and potential payments to land councils. So although it is private it can also be government land. I am proud to support a bill that sets our State up to be an energy and economic superpower. I commend the bill to the House. I congratulate all those who have worked hard on bringing the bill and the road map to fruition.
Mrs HELEN DALTON (Murray) (19:11):
:01 I speak in debate on the Electricity Infrastructure Investment Bill 2020. There are two aspects of the bill that I wish to discuss. I will use the Snowy 2.0 project to highlight some of the issues with that development, which I believe can be extrapolated out to other hydro projects. Snowy Hydro 2 is a project that is likely to cost five times more than the then Prime Minister Malcolm Turnbull said it would, and its capabilities fall short of what was promised. The project will be a drain on the public purse. Snowy Hydro 2.0 was a political get‑out‑of‑jail card, played at the public's expense. We need the project paused while an independent panel reviews the worth of the project and whether the money could be better spent. The estimated cost has doubled since its announcement. By April 2019 a contract for part of the project was signed for $5.1 billion, not including transmission costs, which will cost billions more. It is still being decided who will pay for transmission. While costs have escalated, time frames have also blown out.
Environmental groups are calling for an independent inquiry into the Snowy Hydro expansion with concerns that it would impact sensitive ecosystems. Kosciuszko National Park is a case in point. Around 100 square kilometres of that park will be permanently damaged and, in some cases, destroyed. The new scheme is designed to be an energy store. For that to work, water has to be pumped from the lower reservoir, Talbingo, to the upper reservoir at Tantangara when power prices are low. The water will be released and resultant electricity sold back into the market when demand and power prices are high. To be able to do that on the scale needed requires 27 kilometres of new tunnels. The economics just do not stack up. The Government's backing of a project the size of Snowy Hydro 2.0 means that private investors do not think they can compete. The market is already distorted as competitors are not building projects because it looks as though Snowy 2.0 will definitely happen. That is not the best outcome for Australia.
I have two other concerns with the project: when it is dry and when it is wet. When it is dry, who has the greater need for the water? Towns and irrigators or the national energy grid reliant on the huge Snowy 2.0 battery? Irrigators and their communities will be the losers. Water will be held back for battery use rather than released to the rivers. When it is wet, it will be worse. It will create a flood danger. Snowy Hydro has an agreement with the State regarding airspace in Blowering Dam. Essentially, it can force Water NSW to release water when Blowering exceeds 90 per cent capacity so that there is airspace for them to generate into. I am concerned that in wet periods there will be significantly greater forced releases from Blowering, reducing the stored water upstream. That is an example of the impacts of hydro‑electricity developments: cost blowouts, cost shifting and a lack of a business case to support it. This Government often has grand plans but does not deliver any of the promised benefits, just massive debt and fudged figures.
Another concern I have relates to solar farms. While there are obviously benefits, the proliferation of solar farms across the Murray electorate has its downsides too. Solar seems to be the answer to all our problems. It seems great to have them in the sunny, wide‑open spaces. But there are some things we need to consider. Firstly, the term "solar farm" is misleading. It is really an industrial site. Solar farms have in some circumstances been established on high‑value, prime agricultural land such as irrigation farms. They are swallowing up our most productive land. Agricultural land has often been highly developed in order to produce high‑value crops. That is ongoing year after year provided the water is there. Jobs for processing, such as those in the rice mill, are created—it is the gift that keeps on giving—providing ongoing financial stability for rural and regional communities. Foreign companies are more often than not the ones that come to town with a fistful of cash. Money and jobs are injected temporarily into the local economy.
However, it is a sugar hit with an end date. After the backpackers are gone, the makeshift camp disappears and money generated from solar energy will head overseas. Foreign investment equals foreign profits, meaning money goes offshore. There is no upside for communities after the streets are left bare. Yes, solar in the right place with better planning, regulation and technology is needed. We need sensible regulation, which is lacking within the planning process. I support the move towards renewable energy; it is an admiral goal. But if it is implemented in a sloppy, expensive and thoughtless way, it will lead to buck passing, environmental damage and cost blowouts. Hopefully, we can do much better than that.
Mr MARK COURE (Oatley) (19:17):
:33 As the member for Oatley, I am pleased to speak in support of the Electricity Infrastructure Investment Bill 2020, which is one of the most significant pieces of legislation to be introduced this year—perhaps even in the next year or two. The bill will give effect to the NSW Electricity Infrastructure Roadmap—a coordinated and targeted plan to deliver an affordable, clean and reliable energy future for New South Wales. It is an historic moment for all members in this Chamber tonight, for those who are contributing to the debate and those who are supporting the bill. The bill is our Government's plan to cement our State's spot as an economic and energy superpower. Our priority is delivering cheap, reliable energy for homes and businesses across New South Wales, in particular, for those in my electorate. Our road map does that and more. It delivers 9,000 new jobs expected to roll to the regions by 2030 and huge investment, with $32 billion of private sector investment in renewable infrastructure expected by 2032. It eases cost-of-living pressures, delivering average savings of $130 for households and $430 for small business across the State in coming years. It also gives our farmers and rural and regional landholders an opportunity to diversify their income streams, with more than $1.5 billion in lease payments expected to go to landholders by 2042. This is a game changer.
I would like to tell the House about some of the feedback—in fact, it is fair to say endorsements—that we have received from the investment community and New South Wales consumers since the roadmap was announced. The bill proposed a new Electricity Infrastructure Investment Act with objects including "to encourage investment in new generation, storage, network and related infrastructure by reducing risks for investors". I am glad to report to the members of this Chamber that the investment community has welcomed the roadmap, which is part of the bill, with open arms. Some of the feedback and endorsements that we and the Minister have received include those from the Clean Energy Investor Group, which represents institutional investors who have funded Australian renewable energy projects worth over $9 billion. The group's chair says:
This Roadmap is a welcome plan for private sector investors, harnessing the power of private markets to accelerate NSW's renewable energy goals—all through providing policy certainty and distinct market signals. CEIG has consistently argued for a greater focus by governments on developing Renewable Energy Zones and bringing forward investment in new transmission infrastructure to unlock grid congestion and provide greater certainty for investors to proceed with renewable energy projects. The commitment today by the NSW Government to provide financial mechanisms to support investor certainty … is a welcome development that will strengthen investor certainty at a critical time.
Aware Super, one of Australia's largest superannuation funds, echoed these sentiments. Chief Investment Officer Damian Graham said:
One of the barriers to this investment in Australia has been significant capacity constraints with the energy grid. Announcements like the NSW Government's Electricity Infrastructure Roadmap help to provide long‑term investors like Aware Super with more certainty.
This is critical. This is one of the themes that we are seeing with this recent announcement. The proposed objects of the bill also include improving the affordability, reliability, security and sustainability of our electricity supply and supporting economic development and manufacturing. It is not just investors but also New South Wales' largest energy users and most highly regarded consumer advocates who have come out and strongly supported the Government's roadmap. The Public Interest Advocacy Centre's CEO said:
As people struggle following bushfires, drought, floods and the pandemic, it's more important than ever that we ensure the benefits of the energy transition go to those most in need and no one is left behind. Minister Kean and the NSW government have today shown bold climate action that helps secure our economic future while delivering benefits for people today is no longer up for debate.
Energy Consumer Australia's interim CEO said:
This Roadmap is an important step forward in New South Wales as we plan for the fundamental transformation of the energy sector, which is being driven by technology and changing consumer demands.
We have heard already from the Ai Group's Chief Executive, who said:
Rebuilding an energy cost advantage for industry and taking pressure off households will mean navigating a massive transition in our electricity sector to new technology, new infrastructure, higher demand and a more active role for energy users. Intense uncertainty in energy policy and the energy market raises the cost and difficulty of doing this. Addressing uncertainty is the number one benefit of the proposed NSW approach, and would plausibly lower costs overall.
Tomago Aluminium Smelter's Matt Howell said:
Anything that delivers cheaper, cleaner, more reliable energy is clearly of interest to a large, energy‑intensive manufacturer such as ourselves. We look forward to working with the NSW government to understand more about the detail behind the plan and how we might engage with it.
BlueScope Steel's Managing Director and CEO, Mark Vassella, is quoted in the :
The scale of the new NSW energy plan would "stimulate a manufacturing renaissance in NSW"
"The $32bn renewable infrastructure spend should see the creation of a substantial number of skilled manufacturing jobs and ensure local steel for local infrastructure."
This is an important piece of legislation not just for the industry it creates and builds upon but for the jobs it creates. The bill gives effect to the New South Wales Electricity Infrastructure Roadmap, an integrated policy framework to secure an affordable, clean and reliable energy future for New South Wales. It will encourage investment by reducing risk. It certainly needs to occur right across Australia, not just in our State. It will support economic development, create jobs and support manufacturing. Most importantly, it will improve the affordability, reliability, security and sustainability of electricity supply into the future. I commend Minister Kean and I commend the bill to the House.
Ms TANIA MIHAILUK (Bankstown) (19:26):
:13 I make a brief contribution to debate on the Electricity Infrastructure Investment Bill 2020, which for the most part fundamentally appears to be a clear adoption by the Government of NSW Labor's 2019 clean energy plan, which was presented to the New South Wales people prior to the last State election. It is a relief that this Government has finally managed to come up with a plan. It is long overdue. I am still surprised at the timing of it. It was delivered into the House only yesterday. Given what is contained in the bill, one would have thought that the Minister and the Government must have been sitting on it for quite some time. It would be interesting to know the deliberations that occurred at Cabinet level and how long Minister Kean has indeed had the bill because, as I said, the vast majority of the bill is the NSW Labor's 2019 clean and cheaper energy plan.
I will set out briefly a little of the history in recent years. This Government has overseen the skyrocketing of electricity prices. At times they have been among the highest in the world. This was not always the case. In the late 1990s when the National Electricity Market was created, Australia had among the lowest retail prices in the world. In fact, as recently as 2004 Australia had the fourth lowest electricity prices in the OECD. In contrast, by 2017 New South Wales electricity users were paying among the highest prices in the world, with retail consumers paying more than twice as much for electricity as consumers in the United States. Years and years of policy uncertainty and Coalition infighting—which I suggest has taken place even in recent months, not just in this portfolio area but in others—have exacerbated this massive financial burden on the shoulders of the families and business owners in this State.
This uncertainty has stifled private investment in new electricity generation and has led directly to the price inflation that we have seen. The only certainty that families, communities and businesses in New South Wales have had from this Government when it comes to electricity is the certainty that it is prepared to sell publicly owned assets at the first opportunity. The certainty that this Government has provided when it comes to planning the infrastructure around electricity is that it is always prepared to privatise it, as it has in the past. To date, privatisation has been its policy. In the past seven years alone, the Government has offloaded about 10 power stations, including Eraring Energy, Mt Piper Power Station, Green State Power, Bayswater, Liddell Power Station and many others.
The sale of the State's entire power generating infrastructure has been a disaster for energy users in this State and has prevented the Government from ensuring that these assets are operated in the best interests of taxpayers. It has allowed private companies to dictate the market and to inflate prices. The Government has offloaded TransGrid, Ausgrid and Endeavour Energy via 99-year lease. This has effectively handed a monopoly over New South Wales's high-voltage transmission and electricity distribution assets to various consortiums of private investment funds. Since the lease of TransGrid in 2015 no increase in transmission capacity has been developed in New South Wales. Only one in 20 new energy projects can connect to the grid. That is a disastrous outcome for this Government and is a driving factor behind the price inflation that the residents of this State have suffered.
Residential Electricity Price Trends
These transactions may have delivered a windfall for the overseas investment and sovereign funds that have purchased or leased these assets but that windfall has come at the expense of working families, small business and our State's manufacturing sector. Thankfully there has been some lowering of coal and gas prices in recent times but that will not be for long. There needs to be a plan. I reiterate that I am delighted that the Government has decided in part to adopt Labor's plan, one that Labor spent many months—in fact, a very long time—preparing prior to the last State election. The Australian Energy Market Commission's most recent report projected that residents of New South Wales will have the most expensive electricity bills of any State on the east coast by the 2021-22 reporting period. This should not come as a surprise to this Government. AGL gave the State and Federal governments seven years' notice that it would close the Liddell Power Station in 2022. This has now been extended to April 2023. That is why it is such a surprise that it has taken so long for this Government to get its act together.
We have not really heard the finer detail as to what has caused the delay. When you look at the various different parts that have been presented in the legislation, much of it has come from Labor's plan. There is nothing too difficult in what has been established here. The Government has established an electricity infrastructure fund that will need to be monitored very carefully and I suspect that Labor will have some amendments in that regard. As the member for Swansea indicated earlier, Labor will also have amendments with respect to procurement and job creation. The Government has also indicated in part 7, the administration section of the bill, that there will be a regulator. There is nothing that difficult or surprising in that regard. That is something that this Government has now well and truly established in the way that it undertakes most of its regulatory strategies and enforcement protocols. At some point I am sure that we will hear the finer detail of what has caused the delay, but we know that for the people of New South Wales this plan could not come fast enough.
Liddell provides 13 per cent of New South Wales's electricity supply. The Government's Liddell Taskforce reported in September that its modelling projects the closure will increase wholesale prices in New South Wales from $60 per megawatt hour in 2022 to between $75 and $80 in the 2023-24 period. That is a 25 per cent to 33 per cent increase in wholesale prices, which would mean a disaster for families and businesses already suffering through the pandemic and a recession. Three other coal-fired power plants, which together with Liddell provide up to three-quarters of New South Wales's energy supply, are expected to close in the next 15 years. At the eleventh hour, we are now greeted with the Electricity Infrastructure Investment Bill 2020.
Extension of time
We have clearly indicated our support for the bill, with the proviso that we will make certain amendments. I reiterate that the Labor Party is pleased to see that the Government has adopted in part our energy plan, including the reverse auction mechanism and the operation of a new State energy corporation. We hope that it will avert the impending disaster that the Government's lost decade on energy policy has created. The Minister for Energy and Environment obviously had to manage this through his Cabinet—and probably through a very difficult Cabinet. I can only imagine that he would have had some opposition to some of this plan and one can appreciate what has caused this delay. I seek an extension of time. 
On a brighter note, I am pleased to see that Minister Kean has been spending a lot of time with the Treasurer. I have been watching their social media—their Twitter accounts and Facebook—and I have noticed that the two seem to have been spending a little bit of time together.
Mr Clayton Barr:
What does it mean?
Ms TANIA MIHAILUK:
I wonder what it does mean. I suspect that there have been all sorts of discussions between the two of them. It is a bad cop, good cop scenario because I cannot see the Treasurer being too keen on any of this. But I would be very interested in finding out through some of the gossip chains what is happening between the Treasurer and the Minister. Minister Stokes should be watching it. What is going on between those two? They are having coffee together. Have they invited Minister Stokes along? We have to watch this space. Perhaps there is a new leader or deputy leader of the Liberal Party. Who knows? I think that there will be more for us to watch in the future as those two interact together.
Mr ROB STOKES (PittwaterMinister for Planning and Public Spaces) (19:38):
—:26 I support the Electricity Infrastructure Investment Bill 2020. I commend my colleague and friend the Minister for Energy and Environment for his vision and determination to see some really transformational public policy introduced through this place. It is one of those wonderful opportunities and occasions as a Chamber and as a House when the things that unite us prevail over the things that divide us. This is a bill that truly provides us with the opportunity to set an architecture to catalyse investment in the sorts of energy infrastructure that we will require to build future prosperity, so that people's lives both now and into the future can continue to improve. This bill is integral to the prosperity and the progress of our society. The stakes are that high.
The Third Industrial Revolution
I recall a text written by a scholar named Jeremy Rifkin, . His thesis effectively was that the first industrial revolution was powered by coal and communicated by the telegraph. The second industrial revolution was powered by oil and communicated by the telephone. The third industrial revolution was powered by new energy and renewables and communicated through digital technology, the internet and the internet of things. We are at an inflection point. There is a period of rapid, almost revolutionary change to a new period of stasis. Margaret Archer in her book on human society referred to it as anthropomorphic change when you go from one period of stability through a rapid period of change to a new period of stability on the other side. This is the debate we have been having at a national level, not to mention at an international level, for the past couple of decades. It is truly gratifying to see this bill crystallise a clear, transparent, solid and well-researched basis upon which to drive investment to provide certainty for consumers of energy, whether households or businesses, and investors in energy in the years ahead.
Energy Market Operator,
In one sense it is ironic that at the time the National Electricity Market was created in the late 1990s it was almost at the apogee of centralised generation and distribution to diverse receptors. Almost as soon as the ink was dry, the National Electricity Market, with the various agencies established off the back of it, the Australian Energy Market Commission and the Australian witnessed technology beginning to change. Renewables, new energy and new systems of distribution began to disrupt the established order that was based around centralised generation and distribution to a diverse range of atomised receptors of energy. Suddenly those atomised receptors of energy began to democratise and became generators of electricity and energy. That truly disrupted the very forward view of a command/control style of grid.
Opposition members referred to the long-term leasing of poles and wires. Effectively, the reason for that strategic approach was that we knew, because of the progress of technology, that those assets inevitably would lose value. It was sensible to sell them at a point at which we could return a great profit to the taxpayer and invest that money in new infrastructure that we knew we would need for the next generation of growth, progress and sharing across our community. It was better to sell them rather than watch those legacy assets continue to lose value. This bill is all about establishing the investment certainty required to catalyse investment in the new energy that we know we are going to need—and this is exciting—and that investors want to invest in. At this point I will add that ideally the way our Federation should work in my view is that the Commonwealth should lead on big national policy positions and the States should work in concert with the Federal Government, irrespective of whether that is in relation to scope 3 emissions from coalmines. I see my friend the member for Balmain on the opposite side of the Chamber taking an interest.
Mr Jamie Parker:
Mr ROB STOKES:
Ideally, the Federal Government would provide a clear context in which decisions can be made, but in the absence of that clarity the States have to step into the breach. The situation is similar with energy policy. The Berejiklian-Barilaro Government was keen to support the National Energy Guarantee because it provided a certain nationwide position to channel investment into new energy. Sadly, for various reasons the Federal Government has been unable to provide an overarching vision and the various States have had to go their own way. Of course, the challenge for New South Wales, if various States have their own policies, is to provide investment certainty. If we do not act then investment that could otherwise create jobs and opportunities in New South Wales will go to other States. That is why this bill and that certainty is so important. It will provide jobs and investment in the future in New South Wales.
I notice the presence in the Chamber of the Minister for Agriculture and Western New South Wales. Effectively he is a co-sponsor of this bill because he knows that regional and rural communities will benefit from so many of the jobs when this infrastructure is delivered in the right locations in regional and rural New South Wales. We know that there are some challenges and issues in relation to some of the external impacts of renewable energy technology if it is situated in inappropriate locations, such as if it takes away significant agricultural land. For example, I have heard of cases where poorly planned solar farms could displace land that might otherwise be used for intensive agriculture or where wind turbines have created scenic challenges in parts of the country. We want to ensure that we provide clarity about where investment is sought but equally recognise that the benefits of investment will be largely felt in regional and rural communities, which are exactly the communities that have not necessarily benefited from some of the technological breakthroughs that occurred in the last 50 years or so.
It is wonderful that we can ensure that some of the vulnerable areas of the State can benefit from the new investment that this bill will unlock. Even though the uncertainty at a national level has created a bit of time in which we have been able to achieve this landing, it has enabled us to look around the world at the best policy settings for encouraging investment in renewables. In the United States there is common use of renewable portfolio standards, feed-in tariffs and reverse auctions. A whole series of comparative standards and evaluations have indicated that reverse auctions are the very apparatus that will encourage the greatest levels of investment and the most efficient allocation of resources in that investment. What could be better than ensuring that we have an energy system that gets energy generators to compete against one another for who can provide that service most cheaply to consumers? It is a brilliantly designed idea. We have seen around the world that reverse auctions are exactly the type of technique that works best to put downward pressure on energy generation.
Mr Jamie Parker:
The ACT does that.
Mr ROB STOKES:
I acknowledge the interjection. I notice that the former Chief Minister of the ACT has come out in support of exactly what Minister Kean is seeking to achieve through this bill. As I look across the Chamber it is wonderful to note that in the people's House, the lower House, we represent what the people of this State believe and feel. When we come together on these important issues of architecture and identifying the way we can catalyse investment, when we come together and agree on the big picture issues, we know that that is exactly what we should be doing. That is why I support this bill and commend it to the House.
Mr GREG PIPER (Lake Macquarie) (19:48):
:41 I state at the outset that it is extraordinary how much agreement there is across this House in debate on the Electricity Infrastructure Investment Bill 2020. While we have heard some differences, it is extraordinary that with such a major policy change for New South Wales there is so much agreement.
The DEPUTY SPEAKER:
Order! There is too much audible conversation in the Chamber. The member for Lake Macquarie has the call.
Mr GREG PIPER:
I have to say that I broadly support the bill, but we know that some changes need to be made and they will be proposed by way of amendment by me and the two other Independent members in this House, Opposition members and through a Government amendment. As significant as this bill is for the Government in planning a way forward for energy infrastructure, I am concerned about a number of aspects. Many other members have spoken to those issues. I note that I have had discussions with the Minister about these concerns and I encourage him to share his response in his reply. I believe there will be changes that will be acceptable to most, if not all, of us in this place.
I flag that I will propose an amendment to establish a new renewable energy source [RES] in the Hunter region. However, that may be superseded by other amendments. The members for Sydney and the member for Wagga Wagga will also seek to amend the bill to improve the level of consultation required for infrastructure projects and better support communities with traditional energy production, as well as the private operators and workforces that already exist in those areas. There is very little dispute that energy production and energy markets are changing around the globe. I have made a number of submissions to the Government over the years stating we must plan for the inevitable transition that will be needed in communities that have been reliant on the coal industry for the best part of a century. In June last year I joined my Independent colleagues, the member for Sydney and the member for Wagga Wagga, in calling on both major parties to commit to a 10-year adjustment strategy for those communities.
I am pleased that the Government is taking a significant step towards adjusting the energy policy in New South Wales and equally pleased that the inquiry into sustainability of energy supply and resources in New South Wales is now well underway—I might add, under the chairmanship of the member for Sydney. My electorate of Lake Macquarie is home to Eraring Power Station. It is the largest coal-fired power station in Australia, providing about 25 per cent of the State's baseload electricity. As the Minister and others have already noted, Eraring is scheduled to close in 2032 as it reaches the end of its practical lifespan. I have regular meetings with Eraring's owner, Origin Energy. In fact, I had an extensive tour of the site only two weeks ago when I was briefed on, amongst other things, the company's coal ash recycling strategy. Naturally, the future of energy production at the site is often discussed and I know that Origin is looking at a number of options for the future of the Eraring site. It is supportive of the bill.
Eraring is not the only coal-dependent operation in the area. We also have the Vales Point Power Station at the southern end of the lake, which the member for Wyong referred to extensively. My electorate is also home to a number of mining operations run by Centennial Coal. They include underground mines at Mandalong, Myuna Bay and Newstan mine, which is currently under care and maintenance, and they provide opportunities for possible pumped hydro using those shafts. They are part of the significant coalmining industry in the broader Hunter region, which generates about $4.3 billion in annual economic activity. Coalmining alone employs more than 600 people in my electorate, generating more than $88 million annually in wages and supporting 262 small businesses in the electorate. Those figures are even greater in neighbouring districts of the Hunter Valley such as Muswellbrook and Singleton. The Port of Newcastle is the largest coal export port in the world.
All of this brings me to my most important point: The bill must ensure that we keep a spotlight on areas and communities that have traditionally been the State's powerhouse—quite literally. Without question, there will be many challenges and opportunities for future electricity generation due to things such as emergent technology, changing markets and the need to address climate change. Communities such as mine in Lake Macquarie, given the chance, are ideally placed to meet those challenges. The bill must recognise that and place a high degree of focus on ensuring that those communities, operators and workforces are at the forefront of this shift. We have three major coal-fired power stations in this region that will be closing within roughly a decade. Transmission infrastructure in those areas is already in place and the skilled workforce already exists. I acknowledge that the Government's road map talks about new investment, both private and through government incentives, in regional parts of the State.
We must make sure that this investment reaches the areas that will be most impacted by this shift. It is a plausible bill. It just needs plausible efforts to save and transition the communities that will be most affected by these changes in the years and decades ahead. Construction, Forestry, Mining and Energy Union District President Peter Jordan said this week that the Government is forgetting the people whose hard work has been powering New South Wales for decades. He will be right if we do not include those people and those communities in this road map. They must be the focus of any plan moving forward. The unions, just like me and just like the current operators of coal-fired power stations, know that things are changing and will need to change over the next decade as key infrastructure such as Eraring comes to the end of its working life. They are a key part of the future transition and must be treated that way. I again acknowledge that the Minister has recognised that and is moving towards that goal.
The Minister has said that this road map will create 9,000 jobs over the next 10 years. Although I note that most of those jobs are in construction and the number of ongoing jobs totals about 2,800. There must be enough jobs to replace those in communities where they may be lost as the energy sector evolves over the coming decade. If I can expand on one of those points. In electorates such as mine the debate is no longer an ideological one, and I am glad we have moved away from that. Regardless of one's views on climate change—although I have made mine perfectly clear—we know that the coal and energy market is changing and we know that the domestic market is also changing. Our coal industry will probably fair reasonably well in the short term but we know that most of the biggest export markets in China, Japan and South Korea are beginning to move towards renewable energy sources and, in particular, hydro. The local mining companies and energy producers are also shifting towards renewables. The unions know and accept this. Many of the miners and power station workers know and accept this.
It is a debate not about ideologies but about the need to act quickly on a transition plan for this industry and the communities within which it exists. It is fantastic that the Government is committed to delivering the three renewable energy zones. They will be rolled out in the Central West Orana, New England and south-west regions. I have therefore submitted an amendment to the bill that would see renewable energies only established in the Hunter region. I have been encouraged by the response from the Minister and the Government and remain hopeful that the Opposition and crossbench members are also supportive. We know that is the case. The Hunter region already has the workforce to transition infrastructure, the land and the private operators who will do it. I again urge the House to back those communities that have powered this State for decades and that stand to lose the most if this transition is not handled properly.
As I mentioned previously, an amendment from the member for Sydney will also ensure that these operators and communities are not left behind but remain the focus of this road map to the future. I hope it will be supported by the House. The bill will be a significant boost to renewable energy generation in New South Wales. It will encourage more renewable energy investment and provide a clear signal and incentive to private operators while reducing energy costs and power bills for households in the long term. We know that we must be more than a resource lucky country; we also need to be the resource smart country. I believe this bill takes an important step towards that goal. It will be a better bill with the amendments that are proposed. I say right here that some of the amendments I have heard Opposition members discussing are worthy of consideration by the Government. I hope they will be given serious consideration. I appreciate the way in which this House almost overwhelmingly is coming together in a like-minded manner to take this very important step. It is a paradigm change in the generation and distribution of electricity in New South Wales. I commend the bill to the House.