Legislative Council

COMMITTEE: Select Committee on Statewide Electricity Blackout and Subsequent Power Outages

November 29th, 2017

On the 29th of November, Mark spoke to the Report of the Select Committee on Statewide Electricity Blackout and Subsequent Power Outages.

The Hon. M.C. PARNELL: I join with the Hon. David Ridgway to thank the committee members for their work on this committee and for helping to pull together a professional and useful report. I would also like to add my thanks to Ms Leslie Guy, the committee secretary, and also to the committee's researcher, Christine Bierbaum, who I think might be new to this game but she produced a most excellent report, as if she had been writing them forever, that required very little editing. I think she has been a good find for parliamentary committees.

The Hon. David Ridgway in his contribution, citing an industry representative as his expert said, 'You can't have reliable, affordable and green. You only get two out of the three.' I think that is at the heart of where we part company because you can have all three, and you must have all three. In this age, when we are facing a climate emergency, we must have all three.

In relation to the specific work of the committee, despite attempts by some in the community to blame renewable energy for the statewide blackout on 28 September last year, and also the Adelaide load-shedding incident on 8 February this year, it was clear that in both cases other factors were to blame. Violent September storms last year, including tornadoes, destroyed important transmission infrastructure and this was ultimately what caused South Australia to experience a system black on 28 September.

In relation to the February 2017 heatwave, the load-shedding event, the failure of existing gas generators to respond to the conditions was absolutely critical. Together with the failure of regulators to ensure that sufficient generation was available, these two factors were ultimately responsible—not renewable energy. The unfortunate situation whereby three times as many customers were subjected to load shedding than was necessary can be sheeted home squarely to SA Power Networks' software and, again, this was not due to renewable energy.

Nevertheless, South Australia's changing energy mix in response to environmental imperatives does require changes to infrastructure, regulation and management of the electricity system to ensure security and reliability. In the past, limits on the amount of intermittent renewable generation in the network were thought to be an insurmountable barrier to those industries. However, today, these issues are being resolved with new storage technologies. These new technologies will allow electricity to flow reliably and affordably to consumers regardless of the time of day or the strength of the wind. In the first instance, batteries are likely to provide the needed storage; however, planning for solar thermal and pumped hydro-storage is also well underway.

In this new environment, the objective of moving South Australia to 100 per cent renewable energy is achievable without compromising system reliability, security and affordability for consumers. Calls to maintain South Australia's reliance on fossil fuel generation are misplaced and ultimately only serve the interests of the incumbent fossil fuel generators at the expense of the broader community and at the expense of the environment, particularly the climate.

The age of coal is over and the age of renewables is well underway. South Australia is particularly vulnerable to policies that favour fossil fuel generators because we are already leading the nation in renewable energy and our state is showing that transition to 100 per cent renewable energy is possible without sacrificing reliability, security or affordability. In short, discriminating against renewable energy is bad business for South Australia.

The Hon. David Ridgway referred to the recommendations on which the committee was agreed and I thank him for doing that. I do not need to go back over that territory, but there were a number of other recommendations that the Greens put forward that did not have universal support and I want to briefly outline what some of those were.

In relation to reforms at the federal level, there were a number of issues involving the Australian Energy Market Operator and some of the research that they should be doing to make sure that our grid is of 21st-century standard. They need to look carefully at how batteries can be used to stabilise the network. They need to look at having a fast frequency response market, and there are other initiatives as well. We are pleased that the Australian Energy Market Commission that makes the rules has finally agreed to the five-minute settlement rule, which is going to provide a level playing field so that the gas and coal-fired generators do not continue to game the system.

One particular recommendation from the Greens that is very timely now is that the federal government's proposed National Energy Guarantee, the so-called NEG, should be abandoned. Whilst the committee did not take specific evidence in relation to that, the arguments are pretty much the same as arguments in relation to a state scheme, which I will come to in a minute. Certainly, the National Energy Guarantee is bad for South Australia. I am very pleased that the minister Koutsantonis is out there on the national stage saying that it is bad for South Australia. I am also pleased that he is joined by another energy minister from the ACT, a Greens energy minister, lining up with minister Koutsantonis against the fossil fuel industry. That has been a good development.

In terms of particular South Australian reforms, there are four things I would like to touch on very briefly. The first is that increased renewable energy generation in South Australia should be encouraged through appropriate policy settings and public investment. Those policy settings do include the planning system, and I just make the observation that about half an hour ago I lodged my submission against 720 megawatts of brand-new fossil fuel power generation, which I believe is completely unnecessary and completely at odds with a range of government strategies that promote renewable energy and protection of the climate.

The recent history of the federal government is one of policy failure, and we need to make sure that South Australia steps up and fills the breach. We know that as more coal-fired power stations are taken off-line in Victoria, New South Wales and Queensland in coming years, it will be important to construct new generating capacity within the National Electricity Market. South Australia is well placed to take advantage of our excellent wind and solar resources, and this is the logical place to construct new generation infrastructure.

The second Greens recommendation was that increased energy storage in South Australia should be prioritised in parallel with new generation capacity. As the proportion of intermittent generation increases, we are going to need more investment in energy storage in order to balance out the use over the day or between periods of high and low wind activity. Storage will also be needed for ancillary services, including frequency control.

The third Greens recommendation is that we should develop plans for capitalising on excess electricity generation. The Hon. David Ridgway referred to this in his remarks because, clearly one thing that you can do if you have excess generating capacity, especially renewable capacity, is export it to other states.

That does speak in favour of an interconnector, but it is not the only thing that you can do with excess generation. You can also store that excess in batteries. You can use pumped hydro or other storage methods. You can create a new hydrogen manufacturing industry or convert energy into other energy services, or you could promote new energy-intensive industries to come to South Australia. So, there is a range of things we could do.

The Greens' position in relation to the interconnector is that we think it is seriously worth a good look. We need to do a proper cost-benefit analysis, but it is not the only way to deal with excess electricity. There are some concerns that we do not want to end up propping up ancient old coal-fired power stations in the Eastern States with a facility that will just allow them to dump more dirty energy on the South Australian market.

The final additional recommendation that I have made is that the proposed state energy security target regulations should be abandoned. The government has pretty much abandoned them. They delayed their implementation for six months, then delayed the implementation for another two years. They have effectively been abandoned, but it is important for business confidence that the government come out and say that they will not go ahead with those regulations.

I was pleased to be part of this committee. I think we have done some good work. We have come up with some good recommendations, but I still somewhat despair that, when push comes to shove, the argument can degenerate into a pretty mindless discussion around renewable energy and how it cannot possibly meet the needs of the future. Well, it is the future. It is here to stay, and we have the means and the technology to make it work, to make it reliable, affordable and sustainable, and that is the challenge that is before us.

I think the committee has gone part way, but it will be up to future governments to make sure that the policy settings are put in place to deal with the climate emergency and to make sure that South Australia leads the nation in becoming the first 100 per cent renewable state in this country.

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