Energy/Alinta | QUESTION TIME


Excerpt from Question Time transcript 29 March 2017

Mr MARSHALL ( DunstanLeader of the Opposition) (14:04:57): My question is to the Premier. Will the Premier tell the people of South Australia why, on 17 March this year, he claimed that Alinta had not made an offer to keep the Northern power station open given today’s revelation definitively proves that Alinta had made an offer to secure South Australia’s electricity grid?

The Hon. J.W. WEATHERILL ( CheltenhamPremier) (14:05:18): Leaving aside the misquoting of me implicit in the question, today I think we saw a wonderful contrast between essentially two energy futures: Pelican Point, which opened today, an efficient gas-fired generator which has a long-term future for generation in South Australia; and the Northern power station which was a depleted, coal-fired power station at the end of its life. We saw the contrast between essentially policy certainty which creates investment decisions in a coherent way, and also policy chaos on the other side of the parliament.

The proposition that seems to be advanced here is that the South Australian taxpayer should have slung tens of millions of dollars to a private company on the basis they might stay open. This is the proposition that those opposite want to advance, and this is from the self-declared free market proponent here, from the Leader of the Opposition… What we know for certain is this: Northern, if it were open today, Pelican Point would not be open, it is as simple as that. So these are the choices: a low emissions energy future which has certainty and security for South Australia— And, of course, it was no offer at all. It was no offer at all when a company says, ‘We can close at any point of time at our choosing.’ It is simply no offer at all. It is simply not an offer that met our needs, and today was proof positive. The Leader of the Opposition woke up this morning thinking he was going to have a good day. Pelican Point opened today and put the absolute lie to this proposition that Northern was the future for our state. There is a clear choice: a gas-fired generator at Pelican Point securing our future or a depleted coal-fired power station which was always destined to close. 

Mr MARSHALL ( DunstanLeader of the Opposition) (14:10:04): My question is to the Premier. Why did the Premier tell a news conference on 15 March this year that, and I quote, ‘We’ve never been offered anything from Alinta that would meet our needs,’ when Alinta offered to keep generating affordable and reliable electricity for South Australia?

The Hon. J.W. WEATHERILL ( CheltenhamPremier) (14:10:22): A better question because at least then, on this occasion, the member used the appropriate formulation, the one that I have always used, that is, that we are not inclined to talk about this offer because this company wanted it to remain confidential. We decided to respect that proposition, and we didn’t want to embarrass the company. We certainly wanted to make it clear to the people of South Australia that this was never going to—

Mr Marshall interjecting:

The Hon. J.W. WEATHERILL: Of course there wasn’t a deal… We have consistently said that this was not an offer that met our needs, and today is proof positive.

Mr MARSHALL ( DunstanLeader of the Opposition) (14:12:16): My question is to the Premier. Were all ministers aware of the letter, dated 6 May 2015, from Alinta Energy to the South Australian Government Financing Authority?

The Hon. A. KOUTSANTONIS ( West TorrensTreasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:12:30): We don’t talk about cabinet deliberations in the parliament. I would imagine that people who want to be part of a cabinet one day would honour that principle. It is fair to say that everything the Premier has said is absolutely correct. Alinta were not offering us a deal that would secure our system. Alinta were not offering us what we really required. The letter itself explains that at any time within the period that they were seeking to be subsidised by the taxpayer they could close.

Mr VAN HOLST PELLEKAAN ( Stuart ) ( 14:17 :35 ): Given the Treasurer’s assertion that Leigh Creek was running out of coal, why does the State Development website say this morning that there are actually 100 million tonnes of coal available at Leigh Creek?

The Hon. A. KOUTSANTONIS ( West TorrensTreasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:17:54): Not my assertion, sir: Jeff Dimery’s assertion, the people actually running the coalmine. Let’s imagine that the member opposite is right, that there are vast amounts of coal there. Where is the private coal operator mining the coal for export? There is a rail line to a port. Where is the private operator?

Mr VAN HOLST PELLEKAAN ( Stuart ) ( 14:21 :34 ): Is the minister aware of the proposal personally presented by Jeff Dimery to the Port Augusta community—and no doubt to the government—to mine a third series of coal at Port Augusta so that there would be useful, appropriate calorific-value coal until 2032?

The Hon. A. KOUTSANTONIS ( West TorrensTreasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:21:56): Yet Mr Dimery says it is not economic, yet they are getting no surcharges on the coal. In fact, the coalmining operations now receive discounts. They could not make that mining economic. I have to say that if they could make the mine economic, why aren’t they mining it now? Oh, they don’t want to mine it, but apparently it is really valuable.

These are the contradictions we have. The Port Augusta power station is so vital to South Australia’s needs that they sell it, and then the coalmine is so valuable that the private sector closes it.

Mr MARSHALL ( DunstanLeader of the Opposition) (14:26:49): A supplementary to the minister: will the diesel generators that taxpayers are going to have to pay for to operate during summer this year be higher or lower than the $8 million that Alinta was seeking to continue the Port Augusta power station?

The Hon. A. KOUTSANTONIS ( West TorrensTreasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:27:07): If you are making a comparison, compare oranges to oranges, not oranges to apples.  There is no guarantee that Alinta would have been there this summer. No guarantee. I can’t guarantee—and Alinta say they couldn’t guarantee being here next summer, even with this offer. Of course, what we can say is that if we had done a deal with Alinta to pay them to operate, we can assure you that today the announcement of Pelican Point having both units in the system wouldn’t have occurred and that gas-fired generator would still be mothballed.

Mr MARSHALL ( DunstanLeader of the Opposition) (14:28:30): My question is to the Premier. Did the government undertake any modelling to ascertain the net effect of Alinta’s proposal on the South Australian economy?

The Hon. J.W. WEATHERILL ( CheltenhamPremier) (14:28:42): All we know is that it wasn’t an offer that was capable of being accepted.

Mr VAN HOLST PELLEKAAN ( Stuart ) ( 14:37 :55 ): A supplementary: given that in the Premier’s answer he referred to a chilling of investment, can he explain to the house why the ASX reported that base futures contract prices for electricity have significantly increased since he announced his energy security target and the other components of the $550 million plan two weeks ago?

The SPEAKER: Well, that gives the Premier a lot of scope. Premier.

The Hon. J.W. WEATHERILL ( CheltenhamPremier) (14:38:23): Yes, it certainly does. Today, we have seen the announcement of one of the most substantial investment decisions in the energy market we have seen in recent memory: the introduction of additional installed capacity through the unmothballing of the Pelican Point gas plant. This is an incredibly important moment when we have now increased the capacity of the South Australian energy market. It was directly related to our energy plan and its quality. Pelican Point had to consider— and it must be galling for those opposite. The energy security target has been modelled, and it will benefit gas-fired power stations like Pelican Point.

The energy security target, which will come into effect on 1 July, which is indeed the very day when Pelican Point will begin its full operations in relation to the market, is an important level of support for the decision that had to be taken by ENGIE to reopen the Pelican Point operation. Pelican Point and the ENGIE interests had to carefully consider—  I am happy to provide a further briefing for the Leader of the Opposition on the energy plan so that he can understand the way in which—the energy security target advances— Quite apart from the investment strike that has been occurring in this country in recent years, we are now seeing floods of investment opportunities present themselves to South Australia—batteries, other forms of generation—and there will be further announcements. People are lining up to invest in South Australia because of the certainty that has been created by our energy plan.

I know that those opposite have a rising anxiety because of the broad community support for this plan. We can sense it. We can sense it and I know they can sense it. That’s why the anxiety levels are rising. On this side of the house, we have been able to take this plan and campaign on it in the community, and the more we explain it, the more people like it because it makes sense. The more the business community come to understand it, they are gaining a level of certainty and security about this plan.

We had the opportunity to meet with BHP yesterday, and on that occasion they welcomed the security and certainty associated with our energy plan. Businesses across South Australia are looking across the border and seeing the skyrocketing prices in relation to energy, and they are seeing the South Australian solution as a pattern and as a model for national action.