Electricity Market | MOTION


Mr MARSHALL ( DunstanLeader of the Opposition) (10:51:17): I move:

That this house expresses its concern at the state of the South Australian electricity market and, in particular, notes—

(a) the state government’s energy policy over the last 15 years has delivered South Australian consumers the worst outcomes in the nation;

(b) the first ever statewide electricity blackout in Australia occurred in South Australia on 28 September  2016;

(c) electricity supply reliability in South Australia is the lowest in the nation;

(d) electricity prices in South Australia are the highest in the nation;

(e) the impact that high household electricity prices add to cost of living pressures;

(f) the impact that high business electricity prices add to unemployment pressures;

(g) unemployment in South Australia is the highest in the nation;

(h) both the Victorian and South Australian electricity markets were privatised at similar times, yet Victorians pay the lowest electricity prices in the nation; and

(i) the closure of the coal – fired electricity generator at Port Augusta has led to the increased importation of coal- fired electricity from Victoria.

Mr VAN HOLST PELLEKAAN ( Stuart ) ( 11:39 :47 ): I will try to put a bit of fact and order into this debate. We have just heard a rant, a complete rant from the minister.

Members interjecting:

The DEPUTY SPEAKER: Order on my right!

Mr VAN HOLST PELLEKAAN: We have just heard a complete rant from the minister. We have heard 10 minutes of the minister with not one solution about what he is going to do to address the problems we have in South Australia.

The Hon. T.R. Kenyon interjecting:

The DEPUTY SPEAKER: The member for Newland!

Mr VAN HOLST PELLEKAAN: There is no denying that, unfortunately, in South Australia we have the highest electricity prices in the nation and we have the least reliable electricity in the nation. In fact, we have had six blackouts in the last several months—six blackouts in South Australia since May. That is not including the 4,000 who lost power on Tuesday. We are talking about major blackouts.

The other thing that is very serious at the moment is that we in South Australia also have the highest unemployment in the nation. It is not an accident that we have the highest electricity prices in the nation and the highest unemployment in the nation. They go together. That comes on top of the government not very long ago promising 100,000 extra jobs in this state. They have come nowhere near that target. I think the last calculation was 12,000 extra over the last eight years or so, which is way behind the performance of any other state. In fact, the mineral resources and energy minister promised two Novembers ago that there would be an extra 5,000 jobs in the mining sector. We have gone backwards by approximately that many in the mining sector. These are the very real problems that exist in our state.

The history of how we got here starts not with privatisation of ETSA but with the State Bank, as the member for MacKillop quite rightly said. The Labor government drove this state to near bankruptcy through its complete financial mismanagement, primarily through the State Bank. When the Liberal Party came to government, it had absolutely no choice but to rectify that situation immediately. One of the things it did was sell ETSA. That was a necessary step.

The other thing I would say about that is that everybody in this place and the state knows that both South Australia and Victoria are privatised electricity markets. Both of them privatised at about the same time, yet in South Australia we have the highest electricity and the most unreliable electricity in the nation, but in Victoria it is the exact opposite. We are paying nearly double in South Australia what Victorians pay for their electricity. It has absolutely nothing whatsoever to do with privatisation, but it has to do with the renewable energy target.

Let me say that we on this side want a clean planet and we want as little pollution as possible going into our atmosphere. We understand that we need to make a sensible, well-planned and well‑managed transition away from fossil fuels towards renewable energy, but it cannot be the instant, overnight, ideological, zealous step the government wants to take. The state government went from no target to 20 per cent, to 33 per cent to 50 per cent. The state government was warned in 2005 by ESCOSA that if it went beyond 20 per cent renewable energy the grid would suffer. The state government was warned again in 2010 by ESCOSA about the same sort of thing.

The state government was warned by independent consultants the state government went to seeking advice in 2009 that if it went beyond 20 per cent the grid would suffer, that South Australian’s would suffer. The state government decided to do it anyway. The state government decided to take that step regardless, knowing South Australians would suffer—from the smallest household to the largest employer, they would suffer. However, the government did it anyway for their own personal benefit, for their political purposes. They ignored all these warnings.

The next critical step is the closure of the Port Augusta power station, which the Treasurer alluded to. He made a lot of very spurious claims, but one thing he forgot to say, conveniently for him, was that Alinta went to the government in January 2015 and said, ‘We need help. We need your support. Can you give us some support to stay open?’ The Treasurer says that they could not possibly do that: ‘We couldn’t possibly interfere with the market. We could never support a business to stay open.’

At the same time, when they talk about the closure of Holden, they say that the federal government should have bent over backwards to do everything possible to keep Holden here, when in actual fact, Holden said very clearly, ‘We don’t care how much the federal government supports us financially, we are leaving anyway.’ The state government says that the federal government should have helped them anyway, yet what is good for the goose is not good for the gander, from the state government’s perspective. The state government says, ‘No, of course, we should never have helped Alinta.’

Alinta had to close at some stage; there was no doubt about that. Whether it was going to be in two years, four years or six years, it needed to close as part of that sensible, well-planned, well‑managed transition away from fossil fuels towards renewable energy, but to allow it to close in May 2016, as the state government did, was a very poor mistake. This state Labor government’s energy policies forced the Port Augusta power station out of business. Why is that so important? Not because we want to burn coal forever, not because we are picking one company over another—it has nothing to do with that whatsoever—but because all South Australians have been suffering since that happened.

On average, forward contract prices increased 98 per cent when the Alinta closure was announced in June 2015. From the actual closure in May 2015, spot prices have gone up 91 per cent in the generation market. That price is way in excess of any level of support that Alinta sought from the state government to stay open for a little while longer. The hundreds of millions of dollars of cost to our economy since the Port Augusta power station closed could have been avoided if this government—

The Hon. T.R. Kenyon: Had only paid hundreds of millions of dollars.

The DEPUTY SPEAKER: The member for Newland is called to order.

Mr VAN HOLST PELLEKAAN: —had actually wanted to put a relatively small amount of money to support that company to stay open. I am not saying that they should have given the company what it asked for, and I am not saying that the power station should have stayed open for as long as it wanted to.

The government should have used that as an opportunity to actually develop its own plan and say, ‘Look, we’re not going to do exactly what you want, Alinta, but we will give you this much, this type of support’—it may not have even been a cash component—’and we’re going to give it to you so that we get to choose when you close, not so that you can stay open for as long as you want to.’ The government should have said, ‘We’ll choose that you will close in two or four or six years,’ or whatever the appropriate time frame was, so that we could have had a very sensible transition.

The government has had many opportunities to avoid this crisis, starting with premier Rann, continuing with Premier Weatherill, with Treasurer Koutsantonis supporting it all the way to the disadvantage of South Australians. But throughout all of that, the Liberal opposition has been putting forward very positive suggestions. We have actually been putting forward positive suggestions that the government has chosen to ignore. The government chooses to ignore our positive suggestions and then when they do not accept them, tries to pretend they never existed.

We have said for years that we should have exactly the same wind farm development application planning rules in South Australia as in other states, so that there would be consistent planning regs across all states, so that wind farms would go where the wind resource, the terrain and the connection to the grid is the best, not where the planning rules are the softest, as is the case in South Australia. We have said that we should have an electricity market impact assessment statement associated with every new wind farm development application so that if a new one that comes along will help us, fantastic, we will let it through, but if it is actually going to damage our electricity market, we would not support that.

We have called for one national renewable energy target—not the scrapping of the target, not no target, not a low target—one target that all states and the federal government agree to. One nation, one environment, one target—not the current state Labor government trying to extend and just look good and pick the biggest number it possibly can and make all South Australians suffer.

We have said that we support renewable energy, but with storage. There is nothing wrong with renewable energy. It is when it has no storage, is intermittent, cannot be relied upon and creates a volatile market that it is hurting us. We support renewable energy with storage. We want a sensible transition. We want South Australians to survive. We want South Australia to be a great state again and, until the electricity system is fixed, that will not happen.