Power Infrastructure | SPEECH


Mr VAN HOLST PELLEKAAN ( Stuart ) ( 15:16 :48 ): Mr Speaker, you know as well as every other member of parliament and every South Australian know what a dreadful situation we have across our state in regard to electricity. South Australians are suffering with the most expensive and least reliable electricity in the nation. The great tragedy of this is that it was not necessary. The South Australian government could easily have avoided this problem, and they know it. They were warned well in advance about this problem. They have created this problem through their own desire to play politics with this issue and all South Australians are suffering. From the smallest household to the largest employer, everybody in South Australia is suffering.

Back under former premier Rann, when he decided that renewable energy targets would support his government and would make him popular, he decided to start with a 20 per cent target, and people thought that was pretty good. Guess what? Everybody accepts that we must make a transition away from fossil fuels towards renewable energy. He started with a 20 per cent target, then he started thinking about increasing that to a 33 per cent target. He was actually warned when that happened that our electricity network would not be able to support that target. He was warned to be careful about increasing that target but he went ahead and did it anyway.

Under current Premier Weatherill, the government increased it from 33 per cent to 50 per cent, and again they were warned. They were warned by independent commentators, they were warned by Deloitte Access Economics, they were warned by Frontier Economics. They were actually warned by their own internal departmental advice that 50 per cent was going to be completely untenable. Now the situation we have is that we have a 40-plus per cent contribution of renewable energy to our electricity mix in South Australia, and that electricity is unreliable. That electricity cannot be counted on.

Of course, when it is windy and when it is sunny, it is exceptionally positive, but guess what? It is not always sunny and it is not always windy, and that is the problem. The government’s policy quite deliberately forced out baseload electricity, like the Northern power station.

The government was warned that, if it allowed the Northern power station at Port Augusta to leave South Australia, prices would go up further and reliability would drop further. In June 2015, when the government heard that Alinta was going to close their Port Augusta power station, forward contract prices actually went up by 70 per cent, and since May 2016, when the power station actually did close, spot prices went up 105 per cent. The government was warned of this eventuality well in advance. The government knew this would happen, but they refused to support the Port Augusta power station to stay open.

Alinta asked for the government to contribute tens of millions of dollars so they could stay open for another 10 years. I am not suggesting that the power station needed to stay open for another 10 years, but it could have stayed open for two, four or six years to make a sensible, well-planned, well-managed transition away from fossil fuels and towards renewables. The government refused to support that well-managed transition and they also punished all South Australians in the process.

Since then, according to Business SA, the blackout on 28 September alone has cost this state $350 million. Add that to all of the subsequent blackouts and the extreme increase in prices that we are paying in South Australia and right now we are paying 20 per cent above the national average for electricity in South Australia and we are paying double what the Victorian government is paying.

The state of Victoria and the state of South Australia are both privatised electricity markets, so privatisation has absolutely nothing to do with this whatsoever. This is an issue that the state government has brought upon itself and, unfortunately, upon all South Australians. Every South Australian is being punished by this government’s electricity policy and it must stop.