Solar Thermal Power at Port Augusta


Dan van Holst Pellekaan, Minister for Energy & Mining   (ABC NORTH & WEST 8.36-8.42)   Review of the State Government’s contract with Port Augusta’s solar thermal plant

(Culliver:  Well a big part of Port Augusta’s transition from not having a coal-fired power station anymore, in fact it was a relief for many, many residents to learn that a solar thermal plant would be built there by a company called Solar Reserve.  It’s called the Aurora Project and it’ll be built in the next couple of years.  A big part of its future is to supply power for the Government at a reduced rate.  It’s in a big contract that the Labor Government signed before they lost office.  Yesterday it emerged that the Government is going to … review those contracts.  Dan van Holst Pellekaan … good morning to you … what is the nature of this review?) Well it’s a general review into how the previous government entered into this contract.  It’s a very straightforward business. We saw only a couple of weeks ago a similar review into the diesel generators and we found out that the State Government had actually committed $610 million of public money towards those back-up diesel generators that have never ever been used.  That came out of a review similar to this.  The previous State Government said that it was much, much less money than that; we now know differently.  It’s not unusual at all when Government changes hands to do a review into contracts that the previous Government had entered into so that you can get all the information that you need not just what you had when you were in Opposition … let me say very clearly this Solar Reserve project is one that I’ve been incredibly supportive of, as have you know a large, large number of other people … we have a contract with Solar Reserve and the Marshall Government and me as Minister stand ready, willing and able to deliver on that contract that the previous Government entered into.  (Culliver: So what’s the point of the review then if you’re not going to change anything?) Well just to find out if there’s more information that we need.  You’ve perhaps seen the terms of reference of the review, it’s pretty straightforward … it was made public that we were doing this, there was nothing hidden.  The Opposition would have people believe that they’ve uncovered some sort of sinister plot, which of course is not the case … what they’ve shared is information that we put publicly on to our website quite a while ago.  It is simply a review into the contract.  Of course I haven’t got the results of that review but I am familiar with the contract that the previous Government entered into.  When they did that at the time from Opposition I gave them credit for that, I said it was a very good thing … I said at the time that the Marshall Government if we were elected would honour that contract.  That has happened … we stand ready, willing and able to honour the contract that the previous Government entered into.  (Culliver:  Is there any chance that this review could jeopardise the solar thermal plant?) Well look I certainly hope not … I don’t know, we’ll just see what the review puts up but.. (Culliver:  Well do you think there is a chance?) No, no I’m not saying that at all and you can’t put words in my mouth.  What I’m saying is it’s a hypothetical question.  I haven’t seen the results of the review, but let me say again for the third time Paul that you know I supported the previous Government when they entered into this contract and we stand ready, willing and able to deliver the Government’s side of that control and look forward to doing that, want to do that.  (Culliver:  So often people like me ask questions like how much did it cost the Government and often the answer is ‘commercial in confidence’, we never find out, does this mean we might actually find out a bit more information about these contracts?) Well when you say ‘how much did it cost the Government’ what information are actually after? (Culliver:  Well we’re talking about the price being paid for energy, for how much money is being used on the plant.) Yeah, no well look it was made very clear by the previous State Government that they entered into an arrangement with, and I’ll say this from memory but I’m pretty sure it’s right, it was a typical price of $75 per megawatt hour for the Government’s own use of electricity; I think there was a cap in it for $78 a megawatt hour.  That information was all made public by the previous Government … there’s no secret there at all.  (Culliver: Is there any scope to renegotiate the contract?  Would that be an outcome of a review?) Oh look Paul I mean I’d have to see what the review said, do you know what I mean?  This is a review that the Treasurer has entered into as Treasurers do to just get more detail than was available to us from Opposition.  Of course we’ve got government information now but there’s an enormous amount of information which goes with Cabinet confidentiality.  So a new government coming in does not get access to all of the information that was provided to the previous Government’s Cabinet and that’s quite understandable and we’re just trying to get that information.  So the Treasurer’s done this; it is a very normal thing for a Treasurer to do … when you ask me hypothetical questions about any type of possibility that could ever come out of this review you know of course I can’t answer those.  You know I want this to go ahead.  We said at the time we would honour the commitment, we still today will honour the commitment that the previous Government made.  (Culliver:  Do you think the solar thermal plant would be viable without the Government energy contract?) No I don’t think so … not to say the Government contract specifically but a new generator, whatever type it is, wherever it is, needs obviously the technical capacity to generate electricity, it needs financiers prepared to invest in the contract or lend money …into the development and it needs customer offtakes.  So you know a new generator like this or any type of generator would need a strong contract for the offtake of the electricity for it to go ahead.  It doesn’t need to be a Government contract but in this case it is a Government contract.  (Culliver:  All right Minister, thanks for your time … Minister for Energy and Mining, Dan van Holst Pellekaan.)


Sam Johnson, Mayor, Port Augusta City Council   (ABC NORTH & WEST 8.43-8.46)   Review of the State Government’s contract with Port Augusta’s solar thermal plant / Duplication of the Joy Baluch bridge

(Culliver:  Well of course the building of the solar thermal plant a big lifeline for Port Augusta after the closure of the Port Augusta power station. Sam Johnson … joins me this morning … what’s your reaction to the Government reviewing these contracts including the one with solar thermal?) As you can imagine when I first read it I mean a couple of things first popped into mind.  One was maybe there’s some people that are in Opposition that are slightly bored and looking for a headline and the other one was obviously to contact Solar Reserve and then get the truth behind what maybe in the announcement that came out yesterday.  So I’m pleased I did that. I had a very in depth conversation with Solar Reserve yesterday afternoon just around their thoughts more importantly as to whether this was good, bad or any indifferent.  At this stage the general view – and of course I don’t want to put words in their mouth – but certainly following the conversation with them was that the review would be the review but more importantly the constant message is that the contract that Solar Reserve have with the Government is a binding contract.  So whether it’s a Marshall Government or not it is binding … of course you’ve just interviewed the Minister for Energy who just reinforced that a few times this morning again on radio.  So I don’t have any fear that this review is going to renege, for a word, on the contract that’s actually been put in place … I’d like to see what the review actually says … the Government’s done that for whatever reasons; I’m not the Government, I’m not sure of the intention there, but let’s try and look at perhaps some positives in it and the review might actually flesh a few positives out and potential opportunities moving forward.  (Culliver: We’re still three or four years away from that plant actually being online is there a bit of nervousness about how much the energy market might change before then and its viability going into whatever that market will be?) Well absolutely and that’s probably more a question to the Government.  I think yes they’re looking after the network more broadly, but absolutely and this could potentially be exactly why the Government are actually looking at that review themselves to ensure that we actually have that energy stability and security in the market quite broadly right across South Australia as well.  So it could be actually seen as a positive to actually take proactive steps in making sure that we actually do have a stable energy market here in South Australia.  I’m pretty sure that no-one wants a repeat of the events of the previous Government’s efforts in 2016.  (Culliver:  Just on another topic this morning … we don’t have all the details but we’ve heard about this truck and car collision just off or just on the Joy Baluch AM Bridge … the bridge is back open again and we don’t the nature of the collision, however … it is obviously now a hot spot given all the focus on the Joy Baluch AM Bridge, so I guess how keen are you to see that duplication get underway?) I think many of us are very keen to see that duplication get underway.  I’m certainly a lot happier now that the Minister for Infrastructure, Stephan Knoll, has actually put it in writing as well the commitment from both the State and the Federal Government, something that we’d been asking for for a period of time, now we’ve got and of course the State Government’s also released its public consultation plan moving forward.  So it’s nice to actually have in writing that there is that commitment from both the State and Federal Government.  It is a big project, it is going to take a bit of time but the most pleasing thing about this is it actually is going to happen and today just illustrates exactly why it needs to happen sooner rather than later.  (Culliver:  All right Sam Johnson, thanks for your time … Mayor of the Port Augusta City Council.)