South Australian government shakes up energy market

The South Australian government will launch a tender for 75 per cent of its long-term electricity needs, in a bid to increase competition and reduce costs for consumers.

The tender, along with $24 million in incentives to increase gas supply to the market, provide a medium-term response to the need to drive down prices.

Premier Jay Weatherill said the small number of energy suppliers in South Australia currently had too much power.

“If we increase competition, we put the power back into the hands of consumers,” Mr Weatherill said.

In August, a record cold snap, high gas prices caused by a lack of supply on the east coast and an upgrade of the interconnector to Victoria, caused volatility in the energy market.

“The current rules also let the big private electricity companies drive prices higher by withholding supply – these measures address this inadequacy.”

At last month’s COAG Energy Council meeting, it was agreed that changes to regulatory test for a new interconnector between South Australia and New South Wales be fast tracked.