Ms SANDELL (Melbourne) — It will be no surprise to anyone that the Greens are very happy to support this bill, the Local Government Legislation Amendment (Environmental Upgrade Agreements) Bill 2015. The bill, as others have said, extends the successful environmental upgrade agreement scheme currently in place in the city of Melbourne to all councils across the state.
I want to start by thanking the staff and councillors of the City of Melbourne, in particular Cr Leppert and Cr Oke, for the great work they have done in sustainability over the last few years. I know that the City of Melbourne has been a real leader in this space in a number of ways.
It is good to see that this environmental upgrade agreement scheme can now be rolled out in other councils, enabling third-party financiers to provide loans for owners of non-residential buildings for sustainability, environmental and energy-efficiency upgrades that will then be repaid through council rates. This is exactly the kind of innovative financing mechanism we should be looking at to support renewable energy and energy efficiency and to help us deal with climate change. It obviously has great benefits for tenants in terms of savings on their bills. The security in the rate system means that it is easier to secure finance for these programs and upgrades. It is good for the environment and good in terms of our response to climate change.
Non-residential buildings are a good place to start applying the successful City of Melbourne scheme, but we also need to be looking at mechanisms that support individuals and families to upgrade their homes — their residential buildings. I am hoping this bill is just the start of the government's initiatives in terms of energy efficiency. We could look at things like three-way contracts for energy efficiency and retrofits for housing. I think the Greens' Victorian solar bank idea, combined with a Victorian renewable energy target, could really drive the rollout of renewable energy across Victoria, from small-scale solar photovoltaic systems through to big, transformative projects like wind farms and solar thermal plants.
We need to acknowledge that the single biggest source of our emissions is our brown coal-fired generators, particularly Australia's dirtiest, Hazelwood, which is located in Victoria. Under this bill energy efficiency and sustainability upgrades will lead to a further decrease in demand for electricity in this state, which will lead to more oversupply of energy in our grid and in our market. I am hoping this will be further incentive for the government to implement a proper community transition plan for the Latrobe Valley and to replace our dirtiest power stations.
As we know, Hazelwood is already obsolete. There is already five times more power than Hazelwood produces oversupplied in our grid. What happens when councils and buildings start to reduce their energy needs? It is a really good thing, but when energy use decreases, we see more oversupply, which means that there is too much energy in the grid. That leads to adverse impacts in the market, but it also means that we can switch off dirty power plants like Hazelwood much more easily, provided we have a proper community transition plan in place.
As energy is oversupplied, we will see falling electricity prices. There is every chance that the owners of plants like Hazelwood will simply walk away from an unprofitable and degraded asset. If there were an accident at the plant — and we are seeing neglect in the maintenance of the plants at the moment — it may not be worth repairing, and the owners may simply walk away, leaving the people of the Latrobe Valley and the taxpayers of Victoria to clean up the mess. The people of the Latrobe Valley will be living in a really dangerous place with a huge hole in the ground that is prone to fire and pollution.
While it is great that we are seeing initiatives from this government to reduce energy use, and that is absolutely what we need, these need to be coupled with switching off and replacing our dirtiest coal-fired generators; otherwise we are going to see adverse impacts in the electricity market. Those impacts will be felt most keenly by the people of the Latrobe Valley, who live near those coal-producing plants and mines. That is something the Greens do not want to see.
We commend the government on introducing this bill, and we are really happy to vote for it, but we hope it is only the start of energy-efficiency measures from this government and the start of a move towards actually dealing with climate change in this state, which the previous government had absolutely no desire to do. That really needs to start with replacing Hazelwood.