Mr VAN HOLST PELLEKAAN ( Stuart ) ( 14:35 :35 ): I stand here to support the Leader of the Opposition and the motion, as all members on this side of the house do. It is very clear that by any standard this government has failed with regard to energy policy and the delivery of electricity. We have the highest electricity prices in the nation. We have the least reliable electricity in the nation. By any definition, that is a failure. Unfortunately, what we have with that is the highest unemployment in the nation as well. It is not a coincidence because they go together. These things all come together after 15 years of this government in office. There is no-one else to blame. No other state has anything similar to this with regard to electricity.
This government has failed South Australians and failed the people of Port Augusta and Leigh Creek as well, people in my electorate. This government has failed South Australia in outcomes, failed South Australia in process and failed South Australia with secrecy and duplicity. Every household and every employer in South Australia has been failed by this government. If this government genuinely believed that what it was doing was right, it would not fight so hard to keep information secret from the public.
The public history that the government wants South Australians to know about is very simple. In June 2015, Alinta announced closure plans. In November 2015, Alinta clarified that closure would be in March 2016, and the power station and the mine actually closed in May 2016. The government would like it to be that simple. The government would like that to be all that anybody knows, apart from the fact that along with that went 438 direct jobs. You could probably double that number with regard to full-time jobs employed by other organisations where that employment is directly related to the existence of the mine and the power station.
This actual history is slowly becoming apparent. It takes FOIs, it takes the Ombudsman to step in and it takes all sorts of organisations and people to get information out, and there is more to come. We know that Alinta made offers to the government. Of course, now everybody in South Australia knows that Alinta offered that, if the government paid $25 million, it would keep its power station operating for another three years. We also know that, from the moment Alinta announced its closure plans, base future prices for electricity in South Australia skyrocketed. From the moment that the power station actually closed, the spot market skyrocketed and all households and all South Australian employers and employees have suffered with that ever since.
But the government provides many excuses, many rubbish excuses. They blame privatisation—absolute nonsense. Victoria and South Australia were both privatised at approximately the same time 19 years ago, yet Victoria does not have these problems. Victoria has had the cheapest electricity in the nation for many years now. They blame the federal government. If that were true, all states would be affected the same. They blame the national market operator, they blame the generators and they blame the retailers. They say the other states hate us. It just goes on and on.
They say that there was not going to be enough coal. Alinta was getting close to running out of the coal that it had exposed, but in early 2015 Alinta publicly presented a plan to invest to access enough coal for the Port Augusta power station to see the power station through until 2032. However, they were not able to pursue that realistic, researched plan because government policy forced the closure of the Port Augusta power station. As well as shamelessly blaming everyone else, they shamelessly take credit that is not due to them. In question time yesterday and just now, we heard the Premier trying to take credit for the fact that the Pelican Point power station has come back on.
Anybody who knows anything about this industry knows that Pelican Point and ENGIE have been working towards that reopening for many months. In fact, it has actually been the plan and their ambition for longer than that. Everybody knows that it has nothing to do with the government announcement that was made two weeks ago. They have been working on this for a long time, and it is nothing to do with the government, but the government will shamelessly try to take credit for it.
The government’s $550 million taxpayer-funded—so, electricity consumer-funded—package that it wants to embark upon to fix the problem that it created is so popular with the market that the ASX announced that base future prices have actually gone up 8 per cent on average over the next three years. In fact, there are consumers willing to pay 17 per cent more for their electricity in three years’ time than they would have had to pay on the market the day before the plan was announced. That is how confident the market is of the success of this plan.
AEMO has said, since the plan was released, that they predict that there will be 125 days in the next two years when South Australia will have a reserve shortfall. AEMO announced that since the government’s plan was announced. AEMO do not have any faith in the plan either. We must have a sensible, well-planned, well managed transition away from fossil fuels towards renewable energy, but we cannot have the overnight, ideologically driven, politically driven pursuit of renewables that are without storage immediately, as the government has pursued for many years. This is not something we are dealing with only at the moment.
The government was warned in 2009 by consultants it paid to give it advice that it should not increase its renewable energy target from 20 per cent to 33 per cent but did it anyway. In fact, the economist the government uses to help sell its plan, Mr Danny Price from Frontier Economics, who is well regarded, said in January last year that the problems South Australia is facing are actually the fault of the government. He said very clearly that government policy has created these problems. Good on him for trying to help the government get out of these problems that it created, but that is proof that the government wants to spend $550 million of taxpayers’ money to fix a problem that it created.
Keeping the Port Augusta power station open for a few more years would have and could have contributed to this transition. It would have meant that we would have had lower prices during the transition, we could have had fewer blackouts during the transition and we could have had fewer job losses during the transition. We also would have had an effective market with reasonable wholesale prices and reasonable retail prices, instead of the extreme volatility we are seeing.
I am sure that even ENGIE is looking at their situation at the moment, seeing the wildly low and high prices and thinking, ‘Goodness, what have we done? Where are we going?’ Everybody needs a degree of stability. I am not saying that they need certainty, but they need a degree of stability. We are seeing a range of extraordinary prices in South Australia due to government policy because we have too many wind farms installed. I never say that we should not have any, but there is a saturation point. Until that energy can be stored, there is a saturation point beyond which we cannot go.
We on this side of the house know that we have to move towards renewables. We actively promote the idea of trying to access pumped hydro, trying to access solar thermal at Port Augusta, trying to access biomass—a whole range of things that can contribute—but until we get there, we need stability and we need base load electricity in the market. This government had the opportunity to spend $25 million of taxpayers’ money.
That would have avoided a significant share of the estimated $500 million that blackouts have cost our state, and that would have avoided a significant share of government investment to move forward towards a future with far more reliable renewables. We need renewable energy that can be stored, that can be dispatched on demand, not renewable energy that is only dispatchable when it is generated if it is windy, if it is sunny. That is the world we have to get to.
Taking the Alinta offer, paying $25 million—a lot of money but nothing compared with the $0.5 billion that has already been lost through blackouts, by independent assessment, and the $0.5 billion that the government wants to pay for its policy—would have made the transition far more sensible and far more successful. By not taking that transition, the government has damaged Arrium, the government has damaged Nyrstar, the government has damaged every household and every employer, large and small, in our state, and the government has damaged the people of my electorate.
Figures released today by the ABS show that Australia, from 30 June 2015 until 30 June 2016, has had a 1.4 per cent population growth. South Australia has only had a 0.5 per cent population growth, but Port Augusta, the Flinders Ranges and the outback have had a negative 1.1 per cent population growth. We are also suffering in Port Augusta with a 9.7 per cent unemployment rate.
These are the things that the government have done. They have hurt every single South Australian along the way, but they have hurt the people of Port Augusta, Leigh Creek and the north of the state more than they have hurt others. If this government had had the opportunity to spend $25 million to keep a significant employer and essential service provider going in Adelaide, they would have spent the money in a heartbeat. They refuse to do it in the north of the state.