Public Works Committee: Installation of Hybrid Turbines | MOTION


Mr VAN HOLST PELLEKAAN (Stuart) (11:05): With regard to the Public Works Committee’s Installation of Hybrid Turbines as a Long Term Backup Power Plant report, I can understand why the government is doing this, because they have got themselves in a real bind. The government were told way back in 2009, by two independent consulting organisations that the government went to and paid money to receive advice, that they were heading in the wrong direction with regard to their energy policy.

They had that advice in writing and they ignored it. They were told at the time that if they increased their renewable energy target from 25 per cent to 33 per cent it would have a very negative, very harmful impact upon South Australia’s energy grid and prices to consumers and reliability of supply. With that information in hand, the government then did move from 25 to 33 per cent anyway and, as we all know, subsequently have moved to 50 per cent, only exacerbating the problem.

Let me be very clear: I and my opposition Liberal colleagues believe very strongly that we need to make a transition away from fossil fuels towards renewable energy, but it must be done in a well-planned, well-managed way, not in the haphazard way whereby the government has overprovided permission to install too much wind energy too quickly in our state, and that wind energy being without any sort of supply so that the intermittent generation, which in itself is a terrific thing, can then be stored so that it can be used and dispatched upon demand. It is the lack of that link between the intermittent generation and the dispatch on demand that has got this government into so much trouble.

Having created this problem over many years knowingly, the government now says that it wants to spend $550 million of taxpayers’ money to fix the problem that the government itself created. Part of the plan was announced: a $360 million permanent government-owned, government-operated gas turbine to be in place and operating in Adelaide by 1 December this year. Of course, that commitment evaporated and has been changed many times. As I said, I can understand why the government is doing it, because they have got themselves in a bind. They have their own backs up against their own wall, so to speak.

That commitment soon changed, from being a gas generator in place by this coming summer to being diesel generators in place for two years. The government went out to tender, looked at all the options and realised that what they had promised was not what they were going to do, that it was actually an inappropriate commitment because it was not practically possible. Once they realised that, they went to these diesel generators, which is what we are looking at in the Public Works Committee at the moment.

Everything in the main body of the report is very straightforward and completely above board and completely appropriate, but I would like to draw the house’s attention to the dissenting report by the member for Mount Gambier and the member for Unley. I will not read through all of it, but the two key components they have jointly identified are:

[They] have seen no evidence that all potential options to increase the capacity and reliability of power supply in South Australia, at least possible cost to taxpayers have been adequately assessed by the government.

[They] do not believe that the Government has been transparent with the public about the full potential costs of this plan.

We know both those points to be true. We know both those points to be very valid because, here in this house in debates and in question time, we have asked questions about those issues and the answers have not been forthcoming. The media have asked questions about those issues, and the answers have not been forthcoming.

The government says that it wants to spend hundreds of millions of taxpayers’ money to build a generator to provide backup security to the South Australian energy grid. The government itself says that it expects it to rarely be used, if ever. The government will not come clean to the people of South Australia about exactly how the government wants to spend hundreds of millions of dollars of the people’s money.

I do understand the need to have security. I do understand the fact that the government essentially vandalised South Australia’s electricity supply. They had the opportunity to spend $8 million per year for three years to keep the Port Augusta power station open for three years while we had what I referred to before as a sensible, well-planned and well-managed transition to a cheaper, more reliable and more environmentally responsible energy system in South Australia. But they decided not to spend $23 million over three years; they decided to spend $550 million instead.

That goes to the mismanagement of the government’s energy policy, it goes to the mismanagement by the government of the public’s money and it goes to an endemic problem within the government which this report highlights: the secrecy with regard to their wanting to go about trying to fix things. Deputy Speaker, as you would know, the Liberal opposition has released its energy policy, and there are many components, which have been independently assessed by ACIL Allen, which will deliver lower electricity prices to the people of South Australia.

Very importantly, we have developed a policy which will deliver lower prices without sacrificing reliability of supply and without sacrificing any environmental aspects. We have of course had to include in our policy some elements of the government’s policy. Let me be very clear about that: the only components of the government’s energy policy we have included in our energy policy are those components to which the state government has already contractually bound our state. We have disregarded every aspect of the government’s policy to which we are not already contractually bound and added better, more effective and more constructive components in our policy.

Back to where those policies come directly to this report, the state Liberals have said very clearly that we will run with the diesel generators because the government has already contracted the state to them, but we will not run with the gas generator—the purchase of those assets—after that time. There are a few very good reasons for that. One of them is that we will deliver at least as much reliability of supply to South Australia in other more cost-effective ways. You will remember the comments about the fact that there was no evidence to say that the government plan was going to be delivered at the most effective, lowest cost to taxpayers, which the member for Mount Gambier and the member for Unley put in their dissenting report.

We also have independent modelling that says it will be a one in 10 year event for a period of years, and it will be a one in 20 year event for another period of years in which it would be expected that the generator would need to come into the market to avoid a supply shortfall. I am a realist. I understand that a one in 10 year event could occur tomorrow; of course I realise that. I realise it may never occur either. We have provided a better way to provide that security. The ACIL Allen report also said that if the one in 10 or the one in 20 year event occurred, they predict that a maximum of 162 megawatts of supply shortfall would occur. The government is spending hundreds of millions of dollars to deliver far more than that.

I do understand the government’s point where they say, ‘Well, we might get our money back in the one blackout.’ My point is that there are better ways to provide security of supply to the people of South Australia without wasting their money in this way. There are smarter ways to deliver the same security and spend less of their money in doing so. One of the most important key issues when it comes to considering how this report, and the diesel generators and potential gas generator that it refers to, play into the difference between energy policies of the two major parties is that our policy has been independently modelled. It shows that our policy will drive down the wholesale price of electricity, which will flow through to a reduced price of electricity to consumers. The government say that will happen, but they have provided no independent modelling to say so.

In summary, the public has a choice between a Labor energy policy, which they say will drive prices down, but they cannot find anybody—they certainly have not produced anybody—who will confirm that. With regard to security and environment, the Liberal Party has a more responsible policy that we say will drive down prices, and we do have independent evidence that says our policy will drive down prices for South Australian consumers without sacrificing security of supply or the environment.