Excerpts from Question Time 2 August 2017
Mr VAN HOLST PELLEKAAN (Stuart) (14:32): My question is for the Minister for Energy. What is the duration of the lease period in the contract being entered into with APR Energy for the nine diesel generators?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:32): The lease period, I understand, has a period of over two summers. Of course, we can exercise our options to purchase that sooner. We are obviously looking at what the best options are for the state and we will be in discussions with AEMO. Indeed, I am meeting the AEMO Board later on tonight to have a discussion about how best to integrate the battery and the long-term generation so that we have our permanent supply available and not two sets of generators, that were going to be temporary diesel generators, as the opposition were talking about.
They even contemplated some sort of ship or barge coming into the port of Adelaide, and how wrong they all were. I sense they are a little bit disappointed that we’ve got a permanent solution at a temporary site rather than a temporary solution. But, as those negotiations go ahead, we will reveal more to the parliament. Importantly, on the advice of AEMO, because of our investments and because of Our Energy Plan, our reliability ratings for this summer are very, very good indeed.
Mr VAN HOLST PELLEKAAN (Stuart) (14:33): Who is actually purchasing the generators and leasing them to the government? Is it APR Energy or a third party?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:33): We are leasing them with a right to purchase. We have that right, and the contracts obviously have a level of confidentiality about them. The reason we have that confidentiality in place— Obviously, APR and General Electric are in the market to sell other gas-fired generators like these ones that are able to operate on diesel as well. I point out that our largest gas-fired generator in the state is also able to operate on dual fuel. It can operate on bunker fuel as well and often does if there is ever a shortage of gas.
It was a decision of former governments that there would be redundancy in place. It is good to have gas-fired generators, especially aeroderivative generators that can operate on two forms of fuel rather than being called ‘big, fat, dirty diesel generators’, which is what the opposition just called them. These are highly efficient generators.
Mr VAN HOLST PELLEKAAN: As a point of order, Mr Speaker, I ask you to bring the Treasurer back to the substance of the question, which is: from whom is the government leasing the generators?
The SPEAKER: Treasurer.
The Hon. A. KOUTSANTONIS: I answered that, sir: it was APR. Again, I think this debate would be better informed if we had two opposing policies we could discuss and debate, but unfortunately the Liberal Party are keeping their policies secret. We all know that they have an energy policy, which is to abolish renewable energy. We know that, but they are not telling us, and the question is why. Why aren’t they telling us what their energy plan is? Why are they keeping it secret?
Mr VAN HOLST PELLEKAAN (Stuart) (14:35): A supplementary: what is the cost of installing and leasing the generators and will APR own them through the entire leasing period?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:36): We won’t be releasing the details of the cost of the lease. Obviously, there are commercial considerations in place because the people we have leased these from are entering into other commercial contracts with other operators around the world, but I can inform the people of South Australia that it’s within our budget. It’s within our budget framework, and we are keeping within our budget. They will be delivered on time and on budget.
Mr VAN HOLST PELLEKAAN (Stuart) (14:36): Does the contract extend to the operation of the generators as well as the acquisition and installation of the generators?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:36): APR will be operating the generators for the lease period. We have yet to determine whether they will be the successful applicants to run them on a permanent, long-term basis. I do note that the government is committed to having a permanent solution in place. I note that the opposition refuse to confirm that they won’t privatise these assets if they get into office. They can’t even help themselves in opposition by saying they won’t sell electricity assets. Think of the urges they must have to sell every asset they have.
We haven’t decided on who will be operating the generators on a permanent basis but, on a permanent basis, we would like to have an operator in full-time. The government unfortunately does not have the internal skills to operate a gas-fired power station, and the reason we don’t is that it was privatised by members opposite. So we want to have a professional operator run these generators—remembering that these generators are not designed to compete in the market: they are designed to offer security services. While members opposite laugh, South Australians were load-shed unnecessarily in their privatised market. If we had had these generators in place then, that wouldn’t have occurred, yet members still laugh.
Mr VAN HOLST PELLEKAAN (Stuart) (14:38): Given that the minister said that the government would not be operating the generators because the government does not have those skills, why has the minister told this parliament, and the media and the public, numerous times that the government would be the operator of the gas-fired generator?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:38): I think that’s probably the most embarrassing question the shadow minister has asked me. The idea that government ministers will be at the power plant running the operation—
Members interjecting:
The Hon. A. KOUTSANTONIS: Of course, we are going to contract with professionals to run this.
An honourable member interjecting:
The Hon. A. KOUTSANTONIS: Yes, exactly. On that logic, we don’t build roads. On that logic, we don’t build hospitals. On that logic, we don’t build schools. What a ridiculous assertion, which is the high farce we have now from the opposition. They are keeping their alternative energy policy secret, then attempt to mock ours. Why don’t we have debate? Let’s debate them.
Mr VAN HOLST PELLEKAAN (Stuart) (14:39): Again, to the Minister for Energy: as South Australian Power Networks is procuring this generation on behalf of the government, how much is the government paying SAPN for this service or any other service connected to these generators?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:39): We pay for the same services for connection as any other operator in the market would. We do not own SA Power Networks; we do not own the connection points for the private company. I do not think SA Power Networks have charged us a fee for the procurement—I think they have recovered their costs—but they will be charging us, obviously, for the installation of the equipment to connection through their distribution network. Whatever those costs are is the market rate.
Mr VAN HOLST PELLEKAAN (Stuart) (14:40): Again, for the Minister for Energy: what is the cost and duration of the arrangement that the government will have with General Motors Holden to operate diesel generators at the company’s Elizabeth property?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:40): I do not have the lease arrangements on the contractual arrangements here with me. I will have to check with General Motors Holden about whether they want that made public. Ultimately, General Motors Holden are in a process now for the sale of that plant. They may wish to make this public; they may wish to not make it public, depending on the level of contractual negotiations that they have in place right now. So I will check with them and get back to the house.
Mr VAN HOLST PELLEKAAN (Stuart) (14:51): My question is again for the Minister for Energy. As the diesel generators the government will install are the same as those used in Tasmania last year, where emissions exceeded limits specified by the National Environment Protection measure for air quality, what operating conditions will be imposed by the South Australian EPA?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:51): First of all, I do not think that they are the same generation company, but I am interested to check the veracity of the claims made by the opposition that TM2500 General Electric aeroderivative generators were used by the Tasmanian government, which is the claim made in the parliament now. I will check and get back to the house, but my advice is that they meet all EPA regulations. I am interested to know that the opposition is now claiming that these generators are the ones used in Tasmania. Well, I will check and get back to the house.
Mr VAN HOLST PELLEKAAN (Stuart) (14:52): Supplementary: what noise control conditions will be imposed, given the generators will be installed near residential areas and there were complaints by residents in Tasmania about noise?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:52): The EPA will obviously monitor all those things. They are in industrial zones, not in residential zones. The General Motors Holden site has had a long period of heavy operations, as has the desal plant. I understand that the noise emissions will be almost indistinguishable from background noise. The hope is that (1) these generators will never operate and that (2) ultimately they are there temporarily. They are not there permanently.
There will be a permanent location found near a gas pipeline for a permanent solution. The attempts by the opposition to frighten people, saying that there will be generators permanently based here operating 24/7, is not true. The aim of the generators is to operate rarely. If they do operate, it will generally be at times of extreme heat when people will be inside their homes with their own air conditioners going and won’t be bothered by these generators. I tell you what will bother people: if their power is not on and things are hot and they can’t get air conditioning on because the opposition does not want us to intervene in the market. That would be worse.
Mr VAN HOLST PELLEKAAN (Stuart) (14:55): What conditions will be imposed to avoid a repeat of diesel spills which occurred in Tasmania?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:55): World’s best practice by the contractor. We expect them to behave within Australian Standards and the requirements set by the EPA.
Excerpts from Question Time 3 August 2017
Mr VAN HOLST PELLEKAAN (Stuart) (14:40): My question is to the Minister for Energy. As the government’s temporary diesel generators will require an EPA works approval and licence and the EPA’s public advice to project proponents is that licence assessments can take up to four months, when is the government assuming its generators will receive the necessary EPA licensing approvals?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:40): I don’t have that information here with me, but I will get that for the member as quickly as I possibly can.
Mr VAN HOLST PELLEKAAN (Stuart) (14:41): Again, my question is for the Minister for Energy. Having had 24 hours to check, can the minister advise the house whether the APR TM2500 diesel generators the government is installing in suburban Adelaide are the same as the APR TM2500 diesel generators that were used in Tasmania and exceeded Australian emission standards?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:41): Yes, I have checked; they are not, they were a generation earlier. The shadow minister is attempting to compare a VL Calais with a current model Calais. They have very different emission profiles. The generators that were used in Tasmania were an older generation and had a smaller output, approximately 25 megawatts. The new generation that we have is a 30.7 megawatt output and has different emission standards.
Mr VAN HOLST PELLEKAAN (Stuart) (14:42): My question is again to the Minister for Energy. Why did the minister advise the house yesterday that the government decided to locate the new diesel generators at Lonsdale and Elizabeth on 31 July when, on behalf of the government, South Australia Power Networks advised ESCOSA on 11 July that that would be happening?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:42): I don’t believe I did advise the house. I think it was in response to a question about an answer from an estimates question by the Department of the Premier and Cabinet.
Mr VAN HOLST PELLEKAAN (Stuart) (14:42): Supplementary: just to help the minister with answering the question, if I may I will quote from Hansard yesterday:
…on what date did the government decide to use Lonsdale and Elizabeth as the site for the installation of the diesel generators?
That was the question I asked, and the minister’s answer was:
When the government signed the final contracts, which would have been the night before we made the announcement…
And that was 31 July.
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:43): I think my answers are entirely consistent. The point I am making is that, had the government not signed the contract, which is entirely within its purview not to, the locations wouldn’t have been finalised. You can’t locate something— I think my answers cover it. I am not trying to be difficult to the shadow minister. What I am attempting to tell him is that ultimately nothing is finalised until we sign the final contract. Preparatory work is preparatory work in anticipation of a final decision. It is very different from the final decision.
Mr VAN HOLST PELLEKAAN (Stuart) (14:44): Supplementary: given that the final decision was made on 31 July, why is it that it was in the Government Gazette as at 3 July and why is it that SAPN wrote to ESCOSA on 11 July confirming these facts?
The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:44): I am assuming that they were anticipating a final decision, and that final decision was made a day before the announcement.