Labor warns SA energy crisis will spread throughout the nation

Image: The New Daily

Northern Territory Chief Minister Adam Giles has joined politicians and business leaders in calling for a national summit to address South Australia’s over-reliance on renewables.

Mr Giles said some of the country’s major industries were in danger of shutting down because of high electricity prices and uncertainty over supply in South Australia.

“I agree with South Australia’s Energy Minister Tom Koutsantonis that other states are facing a similar crisis. This fact has been foreshadowed by independent authorities and regulators including the ACCC,” he said.

Last week, SA Energy Minister Tom Koutsantonis put the eastern states on notice, vowing to “smash the national electricity market into a thousand pieces and start again”.

He warned other states the energy crisis was “coming to get them”.

“This is coming to Victoria, this is coming to NSW… every jurisdiction is facing what we’re facing now,” he said, calling on Malcolm Turnbull to immediately appoint an energy minister and schedule an urgent meeting of federal and state ministers to undertake ­energy market reform.

In an unprecedented move last week, South Australian business and energy leaders demanded the re-start of the previously moth-balled Pelican Point Power Station to provide relief from suging and variable wholesale energy prices.

Dow Chemical Australia and New Zealand managing director Tony Frencham had planned to attend a meeting of state and federal energy ministers last Wednesday as part of a business delegation to explain how soaring electricity and gas prices are hampering businesses. But the Council of Australian Governments energy ministers meeting has been postponed while election counting continues.

Because a cabinet reshuffle is likely, industry doesn’t know if Energy Minister Josh Frydenberg will continue to have the responsibility of solving Australia’s energy crisis or someone else will face the challenge, according to the Financial Review.

Mr Frencham said the energy situation was “trainwreck” that had been unfolding for three years.

Moratoriums against onshore drilling in NSW and Victoria had prevented new local suppliers coming into the gas market to fill gaps in domestic supply created by Queensland’s liquefied natural gas export industry, and foreign owners of offshore reserves weren’t committed to local supply in the same way.

The resulting high gas and electricity prices came as a triple whammy for energy-intensive industries despite the nation’s “embarrassing riches” in energy, Mr Frencham said.

The Australian Energy Markets Commission (AEMC) launched a study into the impact of increasing renewable generation on Thursday, just as South Australian Energy Minister Tom Koutsantonis leant on ENGIE to restart its mothballed Pelican Point gas-fired power station to ease skyrocketing power prices in the state.

But the preliminary report won’t be available until the end of the year, with a final report due next year, and industry worries that South Australia’s power crisis will spread to the rest of the eastern states as they pursue similar renewable energy targets and destabilise the NEM at its heart.

Northern Territory gas can avert national energy crisis: Giles

Mr Giles said solutions could not be found overnight, but the Northern Territory was uniquely placed to help avert disaster in South Australia and the eastern states.

“We have abundant onshore gas reserves that can be used to generate low-emissions, low-cost electricity for the rest of Australia,” he said.

The construction of the Northern Gas Pipeline will assist with meeting some of the demand, according to Mr Giles, who said a national energy summit should also consider connecting the Northern Territory to the national electricity grid and the possible construction of a second gas pipeline from Central Australia to Moomba.

The Territory Government has commissioned two energy-related studies, which are due to report in the next two weeks. One relates to the feasibility of establishing a small-scale gas-to-liquids plant in the Territory, while the other examines energy security in the local and national context.

“Many people are unaware our diesel and aviation fuel is currently imported from Singapore and at any one time we only have seven-10 days’ supply,” Mr Giles said.