The South Australian government has unveiled a $550 million plan to tame the state’s power supplies and prices.

Premier Jay Weatherill said it is “clear the national energy market is failing the nation, as well as South Australia,” at the launch of the plan today.

“And this is pretty extraordinary given we are a country that has an abundance of solar, wind and gas resources. For a country of that sort to be facing an energy crisis is a disgrace.”

The South Australian Power for South Australians plan has six key points, which it says will be funded by recent state government surpluses:

  • Building a giant grid-connected battery to securely store energy, funded by a new Renewable Technology Fund
  • Construction of a government-owned 250MW gas-fired power plant to provide emergency back-up power and system stability
  • New ministerial powers to direct the market to operate in the interests of South Australians
  • Incentives for increased gas production so that more South Australian gas is sourced and used in the state
  • Creating an Energy Security Target to ensure more power used within South Australia is generated within the state

Ian Hore-Lacy, research analyst with the World Nuclear Association, says South Australia needs a high proportion of dispatchable capacity - hydro, coal, gas, or nuclear - to ensure reliability, and that enough power is available when needed.   

“Wind and solar are useless in that regard and only flourish because of high subsidies (currently effectively about $85/MWh) provided in response to popular demand. But the cost in now starting to bite, and the reliability is zero,” he said.
 
The energy lobbyist said the 250 MWe increase in gas capacity will help, but the matter of who owns, operates and provides the gas - and at what cost - are important subsidiary questions.

“If the gas plant is state-owned it is at least immune from the diseconomies of low-utilisation rates (when pushed out by wind and solar),” Hore-Lacy said.

“This has closed several fairly new gas plants in Germany ... so they are building 10 GWe of new coal plant to survive their green energy transition.
 
“Providing large battery storage will be expensive and not nearly as helpful ... at best batteries provide a few hours' assistance... None will help much over several days or a week.”

He said South Australia and other states needed to focus on the incoherence of their networks.
 
“‘Local powers over national market’ sounds like pure political posturing, which if pushed will be counterproductive,” Hore-Lacy said.

The SA plan also promises ‘Ministerial direction [including] the ability to direct generators to operate and direct the Australian Energy Market Operator to control flow on the interconnector’.

“The first is possible, the second raises questions about what power is needed in Victoria and NSW at the time,” he said.

“In other words, dream on. SA gas incentives: good idea. Someone please tell the Victorian Government.”

 

Our Energy Plan from Jay Weatherill on Vimeo.