A new government-owned gas power plant forms the cornerstone of a $550 million plan to provide South Australia with energy security and avoid a repeat of recent blackouts.
The plan also features a large battery storage project, a second gas power station to be built by the private sector backed by a contract to supply the state government and other measures to encourage the development of additional gas resources and an energy security target for the state.
Power plan for the future
SA Premier Jay Weatherill has announced a plan to secure the State's energy future as Prime Minister Malcolm Turnbull prepares to meet gas producers this week.
"We're taking charge of our energy future," Premier Jay Weatherill said of the series of measures outlined Tuesday, which include giving additional ministerial powers to direct the market to operate in the interests of south Australians.
He also promised that the steps would help to reduce power prices, although this would likely occur once all of the measures were in place.
South Australia will be tapping its budget surplus to fund the new power plant, he said, which will cost $360 million.
This plant will be a so-called gas peaker plant which will operate for short periods at times of high demand to help the state avoid power interruptions.
The plant could also help offset the intermittency of renewable energy sources such as wind and solar energy, which critics say has served to exacerbate some of the supply problems in South Australia. However the source of gas for this plant has yet to be clarified.
Obtaining sufficient gas supplies at a competitive price has been a stumbling block for private power generators serving the state.
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| "This is a plan that puts control of our energy system back in South Australian hands," Energy Minister Tom Koutsantonis said on Tuesday. Photo: Sean Davey |
The battery storage plant is planned to have 100 megawatt capacity, which would make it the largest in Australia. Built and operated by the private sector, the cost has yet to be clarified. A number of groups are vying to win this contract at present.
Details of the state's energy policy have emerged just days after Tesla boss Elon Musk offered to save the state from blackouts by installing large-scale battery storage.
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| The minister said the plan would also create about 650 jobs, although it stopped short of guaranteeing the new gas plant would be up and running by next summer. Photo: Brendan Esposito |
"For too long, South Australian households and businesses have been at the mercy of private companies seeking to maximise their profits and a national operator that manages our grid from Melbourne and Sydney."
The new policy comes after a statewide blackout last September when freak storms brought down major transmission lines in the state's north, with further widespread disruptions in early February when local power generators refused to supply to help avert further blackouts.
On one occasion about 90,000 properties were intentionally blacked out when the Australian Energy Market Operator (AEMO) ordered load shedding to deal with a lack of adequate supply. On other occasions it has warned of possible supply cuts as demand soared.
Mr Weatherill said the government's plan would also put downward pressure on electricity prices.
"We'll get reliable, affordable and clean power and ensure more of the state's power is sourced, generated and controlled here in South Australia," he said. "Our state has built its reputation on a clean, green environment and this plan recognises that clean energy is our future."
He indicated that the government owned power plant may not operate at a profit as it will provide some ancillary services to the power market, although by operating it at times of high power prices this could generate income at those times.
'Considered and comprehensive'
The Australian Services Union's SA and NT branch said the plan would bring an end to the employment insecurity its members in the energy sector had been feeling.
"The government has offered pathways for cleaner technologies to develop, whilst giving security to workers in gas-fired generation until that pathway is clearer," branch secretary Joseph Scales said.
AGL Energy, one of the largest power generators in South Australia described the new policy as "considered and comprehensive".
"Increased gas supply is a key way of improving energy competitiveness for South Australian businesses and households," it said in a statement.
"Whilst national reform of the energy market architecture is urgently required, these South Australian reforms will address some key issues required for the more cost-effective integration of increasing renewable energy generation."
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