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Power crisis: SA Govt veers from pride to hate for national market

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The State Government has veered wildly from boasting that the national energy market has been designed and built by South Australian expertise, to declaring it has no confidence in its operation.

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Energy Minister Tom Koutsantonis told an Estimates Committee hearing in 2015 that the national electricity market had delivered high levels of reliability to South Australia.

Then, just last September, a day after the statewide blackout, he told Parliament that the national market was a creature of South Australia’s making, although he wished its individual players were still in government hands.

“The entire framework for AEMO’s operation, for the operation of the national electricity market, is based in this parliament,” he said. “In bipartisan ways, we have built the national electricity market in this chamber and in the other chamber by bringing amendments and bills here to this parliament on behalf of all other Australian parliaments, and we voted on them…

“We are the lead legislator for the National Electricity Market. We have a lot of in-depth, in-situ advice given to us constantly by world experts based here in South Australia — people whose lives have been dedicated to the management of the National Electricity Market and its establishment…

“We have designed it, we have built it and it’s worked and served us well.”

That’s not to say that Koutsantonis hasn’t grappled with its vagaries. Nevertheless, this week the Government’s rhetoric has turned, with Koutsantonis and Premier Jay Weatherill rejecting the market rules it says it built.

AEMO (the Australian Energy Market Operator) is firmly in the Government’s sights after it ordered “load shedding” in South Australia, blacking out 90,000 properties in sweltering conditions on Wednesday.

Koutsantonis told reporters on Thursday: “The South Australian Government has lost faith in the national electricity market.”

“Last night, the market operator decided it was easier to load shed than turn on new generation. We want to know why.”

He argued that the rules of the national market meant that “we have an oversupply of generation, yet the market is unable to dispatch that [electricity] to sufficiently meet our needs”.

The shifting rhetoric adds to an increasingly confused political battle about the causes – and potential fixes – for the instability in the South Australian electricity network.

Yesterday, AEMO ordered Pelican Point to turn on its second generator, a process which didn’t happen on Wednesday. The plant’s operator, Engie, insisted that to do so was against the market rules.

With Pelican Point in operation, there was enough electricity in the market last night to avoid load shedding.

Solutions to the problem are being touted by political leaders, but those messages are being overwhelmed by blame shifting.

Weatherill has promised to intervene “dramatically” in the energy market, but won’t say what that may involve. He hasn’t ruled out pushing for a nationalisation of the energy market, despite a potentially massive cost and exposure to “sovereign risk”.

Liberal leader Steven Marshall has touted numerous solutions, including even a nuclear power station, despite his party opposing further inquiries into a high-level nuclear waste dump for South Australia.

Ironically, the royal commission that recommended further work towards the nuclear waste proposition also found that nuclear power was not a viable option for South Australia.

It’s unlikely the Opposition will commit to an energy policy platform until both the Finkel report into the Future Security of the National Electricity Market and AEMO’s final report into last year’s statewide blackout are handed down.

Marshall told reporters yesterday: “We need to consider reopening Port Augusta, we need to consider solar thermal, we need to consider nuclear opportunities.”

When pressed he emphasised that the State Liberals, despite opposing further discussion of nuclear waste storage, have “never ruled out the nuclear opportunity for energy”.

Prime Minister Malcolm Turnbull today turned up the heat on the State Government, questioning what dramatic action Weatherill could take.

“Does that mean cutting off the interconnector with Victoria? South Australia would become blacked out more often than not at that rate,” he told FIVEaa radio today.

“The reality is South Australia is more dependent on power from Victoria than it ever has been.

“That is because the South Australian government has failed to provide the backup energy, what they call the firming power, to support this massive introduction of renewables.”

His comment comes as heatwave conditions across SA continue to push the state’s energy network to the limit with demand for power among the highest on record.

The state dodged a second night of widespread power blackouts on Thursday but the stress on the system will persist with Adelaide and many parts of SA are expected to endure near or above 40C again today.

On Wednesday up to 90,000 properties across Adelaide and parts of regional SA – more than double the original estimate of 40,000 – lost power when AEMO ordered SA Power Networks to reduce demand by 100 megawatts.

Federal energy minister Josh Frydenberg has asked AEMO for an urgent report into what happened in SA this week.

But he’s warming to the idea of coal-fired power being reopened to stabilise the system.

Alinta Energy closed the Northern Power coal-fired station in Port Augusta last May and it is already partially demolished. The Leigh Creek coal mine, which fed the power station, has been closed since 2015.

Representatives from AEMO, the Australian Solar Council, CSIRO, Australian Renewable Energy Agency and the Australian Energy Regulator are giving evidence at a Senate inquiry today into the resilience of electricity infrastructure.

The national body representing businesses that provide energy to every Australian household and workplace wants the blame game to end.

Energy Networks Australia chief John Bradley told the Senate inquiry today that state and federal governments needed to agree on a national “road map” to cut carbon emissions, ensure power is affordable and keep the lights on.

“While the finger-pointing and uncertainty in the policy environment continues we are setting customers up for higher cost and less secure transition to a lower carbon economy,” Bradley told the hearing.

The existing COAG energy council did not work effectively and Australia’s electricity transmitters and distributors and gas companies were keenly awaiting the findings of a review by the chief scientist to improve what is a “fragmented” system.

Asked about the South Australian blackouts, Bradley said no one should rush to judgment on who is to blame.

“Blaming any party within two days of an event rather than a sober analysis of what happened is part of the problem,” he said.

However the SA electricity system should be reviewed to see if there were any ways to fix existing processes and better deal with extreme weather events.

In its written submission the organisation called for a trading scheme for electricity generator emissions and incentives to move towards demand-based tariffs.

– with AAP

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