Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill
Tuesday 19 March 2024
Ms CLANCY (Elder) (17:16): I rise today in support of the Statutes Amendment (National Energy Laws) (Wholesale Market Monitoring) Bill 2023, which seeks to add to the capabilities and responsibilities of the Australian Energy Regulator. Like many of us in this place, I am regularly contacted by members of my community concerned with the price of electricity. This is an issue that was raised with me as a candidate and something that I and many other South Australians have been concerned about for some time.
When constituents bring inquiries to me, no matter what the issue is about, I always try to—and it is often impossible not to—avoid providing the context of mistakes that previous governments have made. However, when it comes to energy prices, South Australians are well aware of the mistakes of the past in privatising the Electricity Trust of South Australia and the effect that mistake still has on energy prices today.
South Australians were also bitterly disappointed by the former Liberal government's decision to sell off the operation of state-owned generators, which would have shielded us by reserving energy for emergency use. This bitterly disappointing decision has left our state more vulnerable to international forces and subjected to increasing unreliability and higher costs of coal-fired power stations interstate.
During the winter of 2022, South Australians saw the worst of this vulnerability. The ongoing invasion and conflict in Ukraine—
Mr Whetstone interjecting:
The DEPUTY SPEAKER: Member for Chaffey, you were heard uninterrupted. It doesn't mean people agreed with what you said. Member for Elder, continue uninterrupted please.
Ms CLANCY: Thank you very much for your protection, Mr Deputy Speaker.
Mr Whetstone interjecting:
Ms CLANCY: Sorry, did that just happen again?
The DEPUTY SPEAKER: Member for Chaffey, can you just zip it please.
Ms CLANCY: I was silent during your contribution, member for Chaffey. Maybe give it a crack.
Mr Whetstone interjecting:
The DEPUTY SPEAKER: Member for Chaffey, you are warned for the third time. Next time you will be leaving the chamber.
Ms CLANCY: During the winter of 2022—
Mr Whetstone interjecting:
Ms CLANCY: —farewell, member for Chaffey—South Australians saw the worst of this vulnerability. The ongoing invasion and conflict in Ukraine, high international fuel prices, fuel supply shortages and generator outages contributed to unprecedented high prices and price volatility in the wholesale electricity market. Events such as those experienced in recent years have demonstrated the risks that energy consumers are exposed to when there is a lack of effective competition in and visibility of wholesale electricity and electricity contract markets.
It is vital to South Australian energy consumers and consumers in other jurisdictions that those responsible for monitoring these markets have the capacity and tools to look out for their best interest. The Australian Energy Regulator plays this important role, ensuring consumers have access to reliable, clean and secure energy.
The regulator is also responsible for ensuring consumers pay no more than necessary for the energy delivered to their homes and businesses. As part of this role, the Australian Energy Regulator sets the annual default market offer for electricity, which is the price cap for consumers on standing offers and which also acts as the reference point for all other contracts for households and small businesses on market offers.
Like many of you, I am sure, I was incredibly pleased to see this morning that the regulator announced their draft default market offer of cuts—not increases, as scaremongered by some of those opposite, but cuts—of 2.5 per cent, or $57, for average households and 8.2 per cent, or $481, for small businesses. The regulator is also responsible for determining the maximum revenue which monopoly businesses, such as SA Power Networks, ElectraNet and Australian Gas Networks, can earn and for monitoring markets and performance to enforce compliance with energy legislation.
At present, the Australian Energy Regulator relies on publicly accessible information to monitor the wholesale electricity market, such as auction processes run by the Australian Energy Market Operator and the futures market run by the Australian Securities Exchange. This restriction was placed on Australian Energy Regulator under the national energy laws to protect commercially sensitive information. In practice, however, these restrictions only serve to hamper the regulator's capacity to gain sufficient visibility of the market to perform its role.
As we saw during the winter of 2022, energy retailers struggled to access electricity contracts to hedge their retail load against high spot prices. Without access to the entire board, the Australian Energy Regulator and the commonwealth could not see the information required throughout this time period. This bill seeks to assist the Australian Energy Regulator to fulfil its role by allowing the regulator the visibility it needs to identify and investigate issues in a timely and well-informed manner and make an ongoing assessment of whether the market is operating competitively.
Outside of the publicly accessible information the Australian Energy Regulator has access to, much of the trading conducted in the electricity market is done through private bespoke contracts between generators, finance intermediaries and retailers. Without access to this information, the Australian Energy Regulator cannot easily estimate what retailers are actually paying to purchase the energy they then sell on to households and small businesses. This particularly impacts the regulator's capacity to set the default market offer fairly for consumers.
Since the South Australian Liberals privatised ETSA, it has been up to good governments at all levels to empower consumers to take back control of their energy use and costs. A really successful example of this is in my electorate, where the City of Mitcham's Community Renewables Program is running. This program, managed by solar energy supplier ShineHub, was introduced to help households and businesses across the council area to install solar and battery systems for no up-front costs. So far, over 760 households have signed up for solar panels and/or batteries, which has offset a total of three power plants and is helping to build a virtual power plant to support the local electricity network.
The City of Mitcham's ultimate goal is to develop a community energy plan that sources the majority of its power from this local virtual power plant. This includes all residents in the council area, not just those who go solar, and a number of other local governments in South Australia and in other states have seen this project by the City of Mitcham and are looking to implement it themselves.
While this initiative is fantastic, it is still limited to those households with the financial capacity to participate in the program. While renters will benefit from the strengthening of a local virtual power plant in the long run, they will only receive the benefits in the short term should their landlord be willing to participate. That is where reforms such as those included in this bill are so important, empowering consumers and ensuring that profit-seeking retailers are not leaving ordinary South Australians behind.
I would also like to take this opportunity to talk about a new community battery program. Through a $1 million grant from the commonwealth Community Batteries for Household Solar initiative, two community batteries will lower annual electricity bills for around 600 eligible participants by as much as $562 per year. These batteries are in Magill and Edwardstown. The one in Edwardstown is not in my part of Edwardstown but is just over the border in my friend's seat of Badcoe, on Towers Terrace. (Hello to Jayne and Quinn, who I am sure are undoubtedly watching my excellent contribution.)
These batteries will help us to continue to decarbonise and will store excess energy during the day when renewable energy is abundant and then make it available at night during periods of high demand or when the grid needs support. Housing SA tenants living near these community batteries will be invited to join the SA Virtual Power Plant scheme, with tenants closest to the two batteries in Magill and Edwardstown receiving the offers first.
I would also like to put on record my strong support for our government bringing forward our renewable energy target by three years. We knew that we were definitely going to be able to reach our target of 100 per cent renewables by 2030, so we thought, 'Let's actually make it a bit tougher. Let's give ourselves a bit more of a push.' Now we have a target to reach 100 per cent renewables by 2027. Our previous Labor government and this Labor government's commitment to renewable energy in our state is something we can be very, very proud of, and I am so pleased that we continue to be leaders, not only in our country but around the world, in increasing renewable energy use.
In closing, I would like to thank all those who have helped bring the bill to this place, including those who participated in the two rounds of public consultation, the Energy and Climate Change Ministerial Council, and our Minister for Energy's staff, particularly Chris. I also really want to thank our Minister for Energy. He is incredibly knowledgeable about this space. He works incredibly hard. I am proud that we have a Minister for Energy who proudly voted against the sale of ETSA back in 1999—what a legend. Thank you to the rest of his team. I proudly commend this bill to the house.
