SA interconnectors will take too long, report says

A new interconnector from the eastern states to South Australia is too expensive, and will take too long, according to a new report.

The report by ACIL Allen, commissioned by the Australian Energy Council, was released on Wednesday and found Australia’s energy market is accelerating so quickly to adapt to renewable energy, that by the time interconnectors are built, they may be taken over by new technologies.

South Australia now has more than 40 per cent of its generation coming from intermittent renewable sources, and the closure of the last remaining coal fired generator in May 2016 means the state is now operating a gas and high intermittent renewable grid, which presents some challenges.

The ACIL Allen report analyses and compares 22 possible solutions to tackle these challenges, including the construction of interconnectors.

Building an electricity interconnector between NSW and South Australia could cost up to $3 billion and decrease the cost of power by 3.2 per cent, while a second NSW option costing $400 million would reduce costs by 1.9 per cent – but would have much less capacity.

Both options would take about seven years to construct.

The Australian Energy Council’s chief executive Matthew Warren said that the SA grid faced multiple security of supply issues, but warned that measures to address these would take time and require new investment that would flow through to customer bills.

“This analysis tells us there are no simple or quick fixes. It will be more expensive, not cheaper and will take time. This has always been the challenge of decarbonising our energy system,” Mr Warren said.

“South Australia is an accidental experiment. We know we have to decarbonise our energy systems and these reports are telling us we need to look carefully at what the best approach might be.

“The current lack of coordination in energy policy in Australia also means that the challenges being faced by South Australia now are likely to become more widespread.”

The Australian Energy Council also released a report prepared by EnergyQuest analysing of the impact of natural gas supply on SA electricity generators.