Electricity Prices | SPEECH


Mr VAN HOLST PELLEKAAN ( Stuart ) ( 15:06 :05 ): Today is a very unfortunate day for all South Australians, but also for the government, because today we have seen another example of the complete failure of the government’s electricity and energy policy for our state. Before anybody says, ‘It’s a privatised market. There is nothing the government can do,’ let me make it very clear. South Australia is a privatised electricity market and Victoria is a privatised electricity market, yet we have the highest electricity prices in the nation in South Australia and Victoria has the lowest electricity prices in the nation.

Unfortunately, along with the highest electricity prices in the nation, we have the most unreliable electricity in the nation. The government has a $30 million per year energy policy department, which is actually meant to oversee government policy and the way South Australia fits into the National Electricity Market, and clearly that is not working. Along with the highest electricity prices in the nation and the least reliable electricity in the nation, we also have the highest unemployment in the nation, and it is no coincidence that they all go together.

Of course, we need to make a transition from fossil fuels towards renewable energy; no sensible person disputes that. Every sensible person wants a reduction in pollution, wherever that comes from, and a reduction in pollution caused by the generation of electricity is a very important place to start, but the problem is that our state government keeps stuffing up the transition by trying to take a completely hands-off approach. It has a $30 million per year energy policy department, yet at the same time claims that it wants to have a hands-off approach to the electricity market.

There is no greater advocate in this parliament than me when it comes to solar thermal electricity and the possibility of that taking place in Port Augusta. That remains a very important objective, but the only way we will get there is if the government takes a hands-on approach to the electricity market. A perfect example of that is that Alinta approached the government in January 2015 and said to the government that it wanted help to stay operational for an extra 12 years. The government took a binary, black-and-white approach to that request and just said no. It thought the options were to say yes or to say no and it decided to say no.

The unfortunate reality is that there were other options. The government did not have to say to Alinta, ‘No, we won’t help you at all,’ or, ‘Yes, we will give you the 12 years’ worth of financial and other support that you want.’ The government had another option. Another option would have been to say to Alinta that the government would support Alinta to stay open at Port Augusta, perhaps for one year, two years or three years, and the determination of that time would have been about how to make the smartest, best planned, best implemented transition away from fossil fuels towards renewable energy.

The government did not have to say no or yes for 12 years: the government could have said yes for one or two years. The important part of that is the government could have chosen when the coal-fired power station at Port Augusta closed. It could have chosen when it closed so that we had the best opportunity to transition from fossil fuels to renewable energy; chosen when it closed so that the people of Port Augusta, Leigh Creek and the entire surrounding area had the best opportunity to transition into other employment; and could have chosen when Alinta closed the Port Augusta power station so that we would not have suffered through the extraordinary increase in electricity prices that we have seen in this state.

Since Alinta made its announcement back in June 2015 that it was going to shut the Port Augusta power station, we have seen a 70 per cent increase, on average, of forward contract prices for electricity. Since the Port Augusta power station actually closed in May 2016, because the government refused to help it through a short-term temporary transition, we have actually seen a 105 per cent increase, on average, in the spot price of electricity in South Australia, a more than doubling of the spot price of electricity in South Australia. That could have been avoided.

It might well have been that through the government being proactive and choosing to allow the Port Augusta power station to stay open for a short period to get a better transition, electricity prices would not have risen the way they have, they would not have doubled the way they have. Today we have had the announcement in Victoria that ENGIE intends to close its coal-fired power station. That is one of four coal-fired power stations in Victoria, so that shows Victoria making a transition towards renewables, away from fossil fuels. The unfortunate feature of that is the government’s energy policy in South Australia has meant that we rely upon base load electricity from Victoria to come into South Australia. We now will not have enough of it, and the government’s policy will be exposed for being as poor as it actually is.