The lowdown on SA's power plan

By Lauren Davis
Wednesday, 15 March, 2017

South Australian Premier Jay Weatherill yesterday announced his plan for his state to take control of its energy future — a plan that has had Australia buzzing since its release.

South Australian Power for South Australians is a $550 million plan to ensure more of the state’s power is sourced, generated and controlled in South Australia. It will see the government undertake the following initiatives:

  • Building a 100 MWh battery to store energy from the wind and sun, as part of a $150 million Renewable Technology Fund. With 50 MW maximum output, this could provide power to 10,000 houses for two hours at peak times.
  • Building a $360 million, government-owned, 250 MW gas-fired power plant to provide emergency back-up power and system stability services for South Australians, in the meantime procuring temporary back-up generation if necessary.
  • Introducing new ministerial powers to direct the market to operate in the interests of South Australians.
  • Incentivising increased gas production to ensure more of the state’s gas is sourced and used in South Australia.
  • Introducing an Energy Security Target to ensure the power system uses more clean, secure energy generated in South Australia.
  • Using the government’s purchasing power through its own electricity contract to attract a new power generator, increasing competition in the market.

“Our plan will restore security and put downward pressure on prices,” said Weatherill, who added that the plan will create at least 630 new jobs.

“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.

“South Australia will now lead our nation’s transformation to the next generation of renewable storage technologies and create an international reputation for high-tech industries.”

So what does the rest of Australia think of the plan?

The CEO of Energy Networks Australia, John Bradley, has welcomed SA’s integrated approach to power system security, storage technologies and gas supply, stating that the latter will help to support a stable and reliable grid.

“However,” he noted, “some of the mechanisms in the plan could have implications for storage or generation market participants wanting to invest on a commercial basis.

“We still need a national plan that supports commercial investment in energy markets without major administrative interventions by government.”

Bradley ultimately concluded that the plan is proof of the need for a national agreement on energy and carbon policy, claiming that the newly announced measures should be “a last resort in a national energy market”.

The Greens are meanwhile divided on the plan, welcoming the support for battery storage and greater security but criticising the move towards gas power.

“We should have a government-owned solar thermal plant instead of a generator dependent on expensive gas, which risks being a white elephant like the South Australian and Victorian desalination plants,” said Greens energy and climate spokesperson Adam Bandt.

“There is no need for more gas plants. A cleaner and cheaper energy future lies with renewables and storage, not more gas.”

Greens Senator for South Australia Sarah Hanson-Young agreed, claiming the SA Government has “backed the wrong horse”.

“The Greens will fight any attempt to open up new areas to gas exploration,” she said. “More gas will not lower prices, because the international market is setting Australia’s gas price and driving up electricity prices. This won’t change.

“There is no way the state government will have a gas-fired power plant up and operational by next summer, when they don’t even know where it’s going to go. That means renewables and battery storage are our only option to secure supply in time and we need to get on with it.”

Tony Irwin, technical director of SMR Nuclear Technology, agrees with the need for a national plan, stating that while coal is being forced out of the market, “policy uncertainty and market conditions mean that there is no investment in new plant that is outside the Renewable Energy Target”.

While Irwin admires the planning that has gone into the gas-fired power station and the grid-connected battery, he said the plan does not solve the many pressing issues of the National Electricity Market.

Australia’s academics have also gotten in on the action. Dr Mark Diesendorf, from UNSW Australia, noted that the plan “focuses on rapid response to avoid blackouts in the summer of 2017–18” and praised its emphasis on gaining more local control. He said the commitment to batteries was “a wise measure”, though he added that the gas-fired power station is “disappointing”.

Gavin M Mudd, an associate professor at RMIT University, said a large-scale solar-thermal power plant should have been included in the plan, as this would have inherent storage built in and would thus be ideal for South Australia’s long-term energy mix.

Mudd’s comments were reiterated by Professor Ian Lowe, from Griffith and Flinders Universities, who said a solar-thermal plant should have been prioritised over gas. Professor Lowe did, however, say that the plan is “mostly an intelligent response to the need to provide energy security and a managed transition to clean supply”, and that it is “great to see some forward planning”.

“It is sensible to provide storage to optimise renewable energy systems such as wind power,” he said. “Battery storage makes sense, as does pumped hydro.”

Professor Andrew Blakers, director of the Australian National University Centre for Sustainable Energy Systems, agreed with Professor Lowe. He said the plan’s “support for storage, including pumped hydro and batteries, and increased interconnection, will go far towards allowing South Australia to increase its renewable energy share while retaining grid stability”.

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