A $550 million plan to extricate South Australia from the east coast energy market has been slammed by federal energy minister Josh Frydenberg.
South Australian Premier Jay Weatherill on March 14 announced a comprehensive plan “to take charge of the state’s energy future and deliver reliable, affordable and clean power for South Australians”.
The plan includes building Australia’s largest battery to store renewable energy for when the wind doesn’t blow or the sun doesn’t shine.
It also includes building a government-owned 250MW gas-fired power plant to provide emergency back-up power and system stability services for South Australian businesses and residents.
South Australia has struggled recently to maintain a secure power supply, due to major weather incidents, a reliance on intermittent renewable sources, and both planned and unplanned shutdowns of the Heywood Interconnector – the state’s only connection to the National Energy Market (NEM).
The NEM is designed to create a single energy market out of SA, Victoria, Tasmania, New South Wales and Queensland.
Tired of the Federal Government blaming South Australia’s struggles on renewables, Weatherill has said enough is enough.
On Tuesday he unveiled the South Australian Power for South Australians plan, to effectively remove South Australia from the NEM, and to create an energy market for South Australia instead.
“South Australians have been let down by a broken National Energy Market that puts profit before people,” Weatherill said.
But federal energy minister Josh Frydenberg argued the opposite was true.
“Today Jay Weatherill made a $550 million admission of failure,” Frydenberg said from Canberra.
“Going it alone created South Australia’s problems, and going it alone won’t fix South Australia’s problems.
“In fact, the measures announced today will only increase electricity prices for South Australians, and have the potential to increase prices for Victorians, for people in NSW, and in Tasmania.”
Frydenberg said the NEM was established 20 years ago “in order to ensure the lowest-cost electricity was dispatched at five-minute intervals”.
“Today South Australia wants to rip up that national agreement, and in doing so will only drive up prices for its people, as well as those in other states,” he said.
“Today’s announcement by the SA Labor Government is a warning sign to other states.
“These 50% renewable energy targets will get you into trouble.
“There was an insufficient planning and provision of necessary skills and systems in place in South Australia to deal with the high uptake of intermittent sources of generation – namely wind and solar.”
But Weatherill is convinced his plan can secure stable energy for the state.
“We’ll get reliable, affordable and clean power to ensure more of the state’s power is sourced, generated and controlled here in South Australia,” the premier said.
“Our state has built a reputation on clean, green environment and this plan recognises that clean energy is our future.”
The plan will incentivise increased gas production in South Australia, to help secure supply for the government’s gas plant.
SA energy minister Tom Koutsantonis said the plan would put control of energy back in South Australian hands.
“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,” Koutsantonis said.
“So far this year, we have seen frequent price spikes and shortfalls across the nation, but the Federal Government has refused to act.
“We can’t rely on this broken national market any longer.”