(AU ABC) Scott Morrison Reveals $1bn Energy Deal With South Australian Government

ABC News

Prime Minister Scott Morrison and South Australian Premier Steven Marshall announced the deal on Sunday. (ABC News)

Key Points The $1.08 billion deal is designed to provide cheaper and more reliable energy to South Australians Under the deal, SA's gas target will be an extra 50 petajoules a year by 2023 The federal government's "gas-fired" agreement with NSW was last year rejected by the Greens

A bilateral energy and emissions agreement worth more than $1 billion has been struck between the federal and South Australian governments, the Prime Minister says.

Scott Morrison announced the $1.08 billion State Energy and Emissions Reduction Deal at a press conference in the Clare Valley, north of Adelaide, on Sunday morning.

The deal will aim to deliver more affordable and reliable power to South Australians, unlock gas supplies, and kick-start work on a new interconnector between SA and New South Wales.

Mr Morrison said it would also provide funding for emissions-reduction projects, including hydrogen.

The agreement involves a $660 million contribution from the Commonwealth and $422 million from South Australia.

"We're doing everything we can to ensure South Australians get lower cost, more affordable, more reliable energy, but importantly also lower emissions for the future — both here in South Australia and more broadly by backing in the incredible technology that Australia is and will continue to lead the world in," Mr Morrison said.

"This is a smart state. Lower cost, affordable, reliable energy with lower emissions — that is what is necessary to drive this state forward and Australia forwards."

South Australian Premier Steven Marshall said the deal would provide more jobs in SA's energy sector.

"This new agreement for energy and emissions reductions is going to take us to the next level," Mr Marshall said.

"It is all about lower cost energy, it's about lower emissions and, importantly, it's about creating jobs in the renewable sector here in our state."

Government's 'gas-fired' plan under fire

Mr Morrison said the deal, which follows similar ones made with the New South Wales and Tasmanian governments, would be a "key driver" of the country's economic recovery from COVID-19.

Amid international pressure to reduce the use of fossil fuels, the federal government has come under attack for pushing ahead with its plan to increase the amount of gas in Australia's energy system.

The Greens last year rejected Mr Morrison's statements when he revealed his government's agreement with NSW, and argued the plan's reliance on "toxic methane gas" put the country's "weak climate targets on a certain path to failure".

At the time, Greens MP Adam Bandt said the government's agreement with NSW amounted "to little more than climate criminality".

Energy Minister Angus Taylor rejects claims he pressured a top bureaucrat to change report conclusions on gas pricing. (AAP: Lukas Coch)

Four Corners last week revealed the government had been accused of pressuring experts who questioned its gas-fired plan — something Energy Minister Angus Taylor denied.

The South Australian agreement includes a gas target of an additional 50 petajoules a year by the end of 2023, plus a stretch target of 80 petajoules a year by 2030.

Mr Taylor said the increased targets would lead to benefits for both South Australia and the national electricity market.

"The focus on gas will help South Australia meet its own gas needs and assist efforts to prevent forecast shortfalls in the broader east coast gas market from 2023, as part of our gas-fired recovery," he said.

The deal also includes $400 million for what the government labelled "investment priority areas", including carbon capture and storage, electric vehicles, hydrogen and other emissions reduction projects in SA.

South Australia's Minister for Energy and Mining, Dan van Holst Pellekaan, said the "historic" commitment would contribute to the state achieving net 100 per cent renewables by 2030.

"The joint commitment to develop hydrogen hubs in South Australia is a strong sign to our global partners in Asia and Europe that South Australia can lead the nation in this new industry," he said.

Links

• 'Experts not ideologues': The most energy-hungry state is in conflict with the federal government
• Against the odds, South Australia is a renewable energy powerhouse. How on earth did they do it?
• Major $2b NSW-Morrison energy deal 'quick and dirty resource exploitation'
• Planned interconnector between SA and NSW gets approval, but economic benefit downplayed
• Government accused of pressuring experts who questioned its gas-fired recovery plan
• Electricity interconnector between SA and NSW has 'robust' business case, energy regulator finds
• NSW strikes 'landmark' energy deal with Federal Government, Greens MP calls it 'climate criminality'