Eighteen months after the blackouts that prompted the Finkel Review of the national grid, energy security is a hot topic in the upcoming SA state election.
The people of SA want affordable, reliable power, and election promises are coming thick and fast to appeal to voters before they head to the polls.
Graham Davies, a former chair of Engineers Australia’s Sustainable Engineering Society and current candidate for Nick Xenophon’s SA-BEST party, is critical of the state government’s track record in addressing energy security for the community.
Davies, a certified engineer who operates a clean energy consultancy, said the 2016 blackout highlighted a lack of government planning in spite of reports and proposals that could have made the National Electricity Market (NEM) more robust.
“The lack of planning is one of the key issues. Government has responded reactively, rather than proactively,” he said.
As a result, the upcoming SA election could help make the case for energy security as a power player in future state and national elections.
Voters have picked up on these issues too, making them top of mind for many in the final lead-up to election day. The state’s political parties have released, or are in the process of releasing, statements that include election promises of improved energy security.
Late last year, the Liberal opposition pledged to put in place a subsidised scheme for households wanting to install battery storage, as well as a $200 million fund to fast-track a new power interconnector between SA and NSW.
For their part, Labor recently unveiled a $2 million policy that promises to capitalise on the success of the Tesla Powerpack and create the nation’s biggest ‘virtual power plant’ if elected in March.
Following Tesla’s successful installation of the world’s largest battery, which has had an impressive debut on the national grid, SA Premier Jay Weatherill plans to team up with Elon Musk’s company a second time to install 5 kW solar systems paired with 5 kW/15 kWh Tesla Powerwall battery storage in 50,000 homes.
“We will use people’s homes as a way to generate energy for the South Australian grid, with participating households benefiting with significant savings in their energy bills,” Weatherill said.
As well as the $2 million in funding, Labor will kick in a $30 million loan from the Renewable Technology Fund. Installation will be free, but the households will not own the power generated. Instead, it will be sold back to them at a discounted rate of around 27c/kWh, undercutting the current average retail price by about 10c per kWh.
Davies himself decided to run as a candidate for the SA-BEST party to help “clean up politics” in relation to energy projects such as the microgrid at Coober Pedy which never went to tender. At the time of writing, the SA-BEST party was still developing its energy policy.
Cause for concern
A recent report released by the Electricity Security Board (ESB) delved deeper into energy security concerns, stating the national grid is “not in the best of health”. The report cites the symptoms of this malaise as rising electricity bills, increasing risks to power system reliability and uncertainty over future emissions policy.
The last symptom acts as a disincentive to energy investors, meaning new power stations might not come online in time to take up the load from coal-fired generators reaching the end of their lives.
Davies agreed that energy affordability has become a big issue. According to him, the reasons for price hikes in power bills are quite complex, but they’re largely due to market manipulation and lack of competition.
“It is actually the distribution, the gold plating, which is a big part of the bill. We don’t have a good picture of where the money is going,” he said.
In the pipeline
South Australia’s efforts to improve energy security and get on the front foot has resulted in more investment for renewables.
The installation of the 129 MW Tesla battery was a good move, said Davies, as it provides fast frequency response, grid control and some storage. On the other hand, he cited the $360 million purchase of 276 MW (180 MW on a hot day) of gas and diesel generator capacity for emergency backup as a lack of foresight, because hiring this equipment could have been more economical.
On the sunny side, the South Australia Produce Market will invest $10.5 million to install 1600 solar panels and a 4.2 MWh lithium-ion battery. The project, which is set to be the largest private solar PV system in the state, will receive $2.5 million from the State Government Energy Productivity Program grant.
The state government will also fund the $650 million concentrated solar thermal (CST) 150 MW plant in Port Augusta, which was contracted last year to US company SolarReserve. Davies said having CST in SA’s energy mix is absolutely essential, and credits the $110 million deal Xenophon struck in the senate with giving the Port Augusta project the necessary momentum.
“It ticks all the boxes: its dispatchable, solar, clean and geographically well placed,” he said.
Four new pumped hydro energy storage projects have just received backing from the government as well. Located at reservoirs and disused mine sites near Whyalla, Port Augusta and Port Germein, they will add a projected 750 MW of generation capacity to the SA grid.
Another initiative is the market operator’s demand management strategy, which pays residents and business to shut down for short periods when demand is high – a smart move, according to Davies. He also expressed qualified support for Labor’s ambitious virtual power plant.
“One hundred 1 MW power stations are a lot more reliable than one 100 MW station, as you don’t have all your eggs in one basket,” he said.
Still at large
Other areas of the ESB’s report highlight unresolved issues that could hinder progress. For example, it suggests the National Energy Guarantee (NEG) will cure the uncertainty of Australian energy policy in the wake of the political ‘climate wars’. But Davies said we need a policy that presents numbers, not adjectives, and provides a price on carbon not just for energy, but across the board.
“Until there is a genuine acceptance of the real risk of climate change by the Coalition, there won’t be a real consensus. It’s preferable to wait for that realisation rather than run with a poorly conceived policy that locks us in,” he said.
Davies also says that the NEG is not really technology neutral. Findings of a recent analysis undertaken by the Australian Conservation Foundation indicate the NEG could penalise variable renewables, such as wind and photovoltaic solar, in favour of coal.
“Each technology should have the same reliability criteria if this system is to be implemented fairly, and not simply place the burden on renewables,” Davies said.
With the big day just around the corner, it will be interesting to see if the issue of energy security is powerful enough to drive election results, as the choices here could influence energy policy in the state for years to come.