South Australia election result allows big national step on energy
Rarely has a South Australian state election been so important to the nation.
Not only does it pave the way for a proper Australian energy policy but the poll result shows that a large number of Australians want to be less dependent on the grid and want their own backup.
Significantly the South Australian Liberals have responded and come up with the unique plan to overcome at least part of the network vandalisation undertaken by the previous ALP government.
Given that Victorian Premier Daniel Andrews and NSW premiers Mike Baird and later Gladys Berejiklian undertook a version of the same vandalisation they are likely to look hard at the South Australian solution.
If that happens we are headed for a new electricity system in the three states. To understand the significance of what the new SA premier is planning we have to understand how the three states were vandalised by politicians looking for green votes.
In essence South Australia, Victoria and NSW installed massive wind and solar stations without anywhere sufficient backup should the wind not blow or the sun not shine.
On a percentage of demand basis, South Australia installed more than anyone else and, without the required backup, was caught out in 2016 when the wind blew too hard and the Victorian interconnect failed.
Businesses around the state were ravaged and homes also lost food. Unrepentant, the SA Premier Jay Weatherill (backed by Penny Wong) wanted to go to 75 per cent renewables but did not set out a backup plan.
When a state premier causes so much damage then democracy works, and he was voted out of office at the first opportunity.
Daniel Andrews in Victoria, who faces an election in November, was lucky. The Australian energy operator warned Victorians late last year that if there was a heatwave the state could hit blackouts in 2018. But there was no heatwave.
There was one extensive blackout but we learned later it was a set of network problems not a supply shortage. (In my comment the next morning I believed that the diesel power generators were used. I was wrong. Victorians did not need them in a network problem).
But in a heatwave without wind they would have been used and if NSW had encountered similar problems on the same day Victoria was likely to have suffered extensive blackouts.
But without power shortage-created blackouts Andrews now has a fighting chance to win the election, particularly as the Liberal side of politics is fighting over money and toll roads.
Federal energy minister Josh Frydenberg has a plan to make sure new wind and solar installations have necessary backup via gas and pumped hydro plus other sources, and that coal has a place in the network. South Australia was the main obstacle in getting agreement at COAG.
To be fair to the SA premier, the blackouts had showed him the importance of back-up power generation to wind and solar and he installed a major battery and invested in gas backup. But more was required.
The solution proposed by incoming South Australian premier Steve Marshall to increase backup will transform the state.
House by house, South Australia will subsidise residents up to $2,500 to install some 40,000 batteries. There will be a means test in the subsidy. Add to that the associated home solar installations plus the batteries installed by those who do not qualify for the subsidy and SA is on the way to a very decentralised power system.
You might argue that by encouraging people to fund batteries the new SA government is using the savings of the society to overcome the mess created by the previous government. It’s a disguised tax. But the South Australians embraced it. Residents of other states might follow although it could require a blackout to gain popular appeal.
Steve Marshall’s new government will also fund an interconnect with the NSW system to increase security. That means the nation needs a stable electricity system in NSW and cannot afford a repeat of February 2017, when the political vandalism of the state’s power network via unbacked wind installations plus lack of maintenance of coal-fired stations almost sent the state into blackout.
NSW has now invested in greater backup and while in 2017-18 NSW is more stable than Victoria, it still carries risks.
Eastern states power prices are now stabilising and the shortage of gas has been alleviated by increased gas from Queensland. Gas prices would fall sharply if Victoria unlocked its vast gas reserves where the state bans development. That probably requires a change of government next November but the previous Coalition endorsed the gas bans until they realised the impact on gas and power prices and the extent of the undeveloped Victorian gas and the fact that fracking was not required. Without blackouts the Victorian election is more likely to be fought on issues like crime and toll roads.
Nevertheless the South Australian election has enabled Australia to take a big step forward in energy. We can still increase our renewables generation but those renewables most be costed by calculating the cost of backup should the wind not blow (or blow too hard) and the crisis takes place when the sun has set.
Thursday, March 22, 2018
Subscribe to weekly updates
- Industry splurge leaves out gentailers
- Paris Agreement to shrink economy, says US’s Brookings Institution
- Renewables momentum continues, despite political chaos
- Records 'blown away' as rising power bill fears trigger solar PV surge
- Origin Energy able to supply electricity three times faster
- Sanjeev Gupta, Simec Zen Energy, ready to raise cash for renewables
- Paris target achieved eight years early
- ACCC to probe gas retailers’ ‘excessive margins’
- NSW, South Australia move to fast-track power connection
- Leading CEOs on the realities of energy policy paralysis