The South Australian Government’s decision to support additional local dispatchable electricity generation to help manage the state’s supply challenge is a step in the right direction, the energy industry said.
Australian Energy Council (AEC) chief executive Matthew Warren also welcomed the Weatherill Government’s backing of a national market-based emissions reduction scheme and announcement of a gas supply incentive program.
“The current electricity market challenges in South Australia are the result of a number of incompatible state and federal policy decisions over the past decade,” Mr Warren said.
“As a result, South Australia can now no longer be confident that it has an affordable and reliable energy supply in the near term. Securing more firm, dispatchable generation within South Australia is essential to that state managing upcoming heat waves, cold snaps and periods of low demand.”
There is no reason to suggest market power or a lack of competition is to blame, according to Mr Warren, who added there is plenty of electricity generation and competition in South Australia.
“It is just that too much of that electricity is intermittent,” he said.
“South Australia needs a plan to manage its large volume of intermittent generation, and we need a nationally agreed plan for the National Electricity Market as we transition to a lower emissions future. In the meantime, this announcement is a positive step towards more, essential, firm generation in South Australia.”