Weatherill told a press conference this morning that the Government would lease and eventually purchase nine new, trailer-mounted, GE TM2500 aero derivative turbines from APR Energy to avoid a repeat of the “load shedding” event in February, during which 90,000 households lost power.
The generators will begin operating on diesel at the two temporary locations by summer, with the units to be later converted into a permanent gas-fired back-up solution to South Australia’s electricity issues at a seperate, yet-to-be-decided location.
Weatherill said the gas conversion would happen within within two years, with the units becoming the permanent, Government-owned gas plant that had been announced as part of its “energy plan” earlier this year.
He said the hybrid turbines came in cheaper than the $360 million budget that had been set aside for such a plant – and would be capable of producing more power (276 MW) than originally foreshadowed in the energy plan (250 MW).
Department of Treasury and Finance Chief Executive David Reynolds told parliament’s budget and finance committee last week that $300 million was budgeted for “capital costs associated with construction” and the remaining $60 million included “the operations of that plant and the team of people to establish that procurement process and get it operating”.
Energy Minister Tom Koutsantonis this morning that the units would only switch on during a state energy supply shortfall, and would never compete with other energy suppliers.
Koutsantonis said the cost of blackouts to the state economy was so high that even if the units prevented one blackout, they would have been worth the taxpayer investment, adding that the units constituted the state-of-the-art in power generation and could be turned on within minutes.
Weatherill said the new generators would not immunise South Australia from blackouts, but would remove the risk of an energy supply shortage.
“Natural disasters can always take out (energy infrastructure) … but this should remove one of the key risks, which is reserve shortfall,” he said.
“267 megawatts of power, together with our battery – 100 megawatts of power – gives us the opportunity to substantially reduce the risk of load-shedding events.”
He said the Government would lease the new generators in the first instance before buying them.
“We have an option to build this gas-fired generator to secure our future, and we’re absolutely certain that we will require that,” he said.
“We don’t want to be reliant on an interconnector that continues to have hiccups on a regular basis.
“We don’t want to be reliant on Victorian coal.”
He said the Government may choose to lock in the “option” before the state election in March.
GE CEO and president Geoff Culbert said South Australia was “a world-leader in renewable energy generation and our technology will complement these efforts”.
“GE’s TM2500 units are (power plants) on wheels,” he said.
“They are a proven technology that will provide secure and reliable power to South Australian businesses and households.”
Koutsantonis said South Australia had become a net-exporter of renewable energy into the state of Victoria since its massive Hazelwood coal-fired power station closed earlier this year.
“Since we started our energy plan, we are a net exporter of electricity out of South Australia not a net importer,” he said.
“The plan is having an impact – and you saw it yesterday, when South (Australia’s energy supply) was secure and Victoria wasn’t.”
But when asked why South Australia retains the country’s highest future wholesale electricity prices, Koutsantonis said “the market is not factoring in the investment’s we’re making until in fact they’re actually visible”.
“Once these things are actually visible (and) you see more security, more reliability … you’re going to see more stability in the market and that will be factored into the forward prices,” he said.
“The market is acting as if these things aren’t in there.”
He added that: “Gas is setting the price, and gas prices are higher.”
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