Fix for SA’s power crisis to be unveiled by Jay Weatherill — but it comes with a cost

//Fix for SA’s power crisis to be unveiled by Jay Weatherill — but it comes with a cost

Fix for SA’s power crisis to be unveiled by Jay Weatherill — but it comes with a cost

14 March, 2017

Peter Jean & Daniel Wills

Courtesy of the Adelaide Advertiser


Jay Weatherill is promising a power fix that reduces bills and blackouts while also creating renewable energy jobs, but he concedes it will come at “substantial” cost.

At 11am on Tuesday, the State Government will unveil its long-awaited and “dramatic” plan for power, which Mr Weatherill says will also set up SA as a global target for new green investments.

It is understood the Government has closely considered the option of new interconnectors to send and bring in power from other states, and it has also been urged to buy its own power station.

Mr Weatherill was cagey on details, but refused to rule out major new spending on interconnectors or power stations and also left open the possibility of a state-based carbon price.

“People believe that energy is such an essential service that they think the Government should still be running it but, if they’re not, it has to be in charge,” he told The Advertiser.

“That’s really what this is about, taking charge. The objective is obviously to make our power supply more reliable (and) to put downward pressure on prices, but the other element which is really critical is the jobs question.

“It’s a really exciting opportunity to source, generate and control more of our power here in SA.”

Market experts have blamed the lack of a national carbon price for creating industry uncertainty which results in the closure of coal power plants and little new investment to replace them.

Mr Weatherill did not confirm that a state carbon price was in Tuesday’s package but, when asked about the prospect, said: “Everything we do will be capable of being fitted into a national framework”.

“We’d like there to be national leadership, and a coherent national energy policy which takes into account climate change, but we don’t have that,” he said.

“We don’t have the luxury of waiting for that. It’s been left so long now that we’re in a position where we just have to act.”

It comes as a new Grattan Institute report to be released on Tuesday recommends state governments consider re-regulating power prices to stop electricity retailers from gouging customers.

“The way retailers advertise their discounts is confusing and possibly deliberately misleading,” Grattan Institute researchers Tony Wood and David Blowers argue.

They find SA could face similar problems to Victoria where consumers were paying $250 million too much each year due to high profit margins unless there is more market competition.

“Many Australians, including some of the most vulnerable, are paying more than they need to,’’ the report says.

“If there is no turnaround in the market, and if the expected benefits of competition continue to remain elusive, Australian governments will need to reimpose a regulated price on the market.”

The report said power companies should hand over information to regulators on their cost structures or face an Australian Competition and Consumer Commission inquiry.

Power discount offers should be easier to understand and customers should be told how much extra they will have to pay after a discount period ends, it also recommends.

Prime Minister Malcolm Turnbull said Australian households and businesses were paying too much for electricity.

“We are cleaning up Labor’s mess by ensuring that electricity is affordable and reliable for households and business,’’ he said.

“Our government has led the way on putting energy reliability, security and affordability as our top priority.”

Federal Government experts have backed the greater use of “pumped hydro energy storage” to help meet the nation’s power challenges.

Mr Turnbull has been advised by the Australian Renewable Energy Agency that pumped hydro systems had the potential to provide large-scale, reliable, clean energy storage that could feed into the grid on demand.

Energy Australia is considering establishing a pumped hydro project in the Cultana region of SA.

SA has been struck with two major load shedding events since the statewide blackout and also has the most expensive power in the nation.

There are warnings of massive price surges in the coming year and regular rolling outages over summer without an effective fix.

Mr Weatherill conceded that major damage had been done to the state’s reputation since the statewide blackout in September, a result he put down to Mr Turnbull’s savage criticism of SA’s renewables policy.

But he insisted the plan he will announce on Tuesday could turn that on its head.

“Being able to achieve these things in a way which is really solving a challenge the nation and the whole world is going to have to face at some point, and that’s moving to a new renewable future … (gives) a massive reputational opportunity,” Mr Weatherill said.

He said some measures would be put into place immediately, and others in coming months.

2017-03-14T10:08:19+11:00 March 14th, 2017|