Tuesday, 23 March 2021
Matters of Public Importance
I always appreciate the opportunity to talk about energy policy in this House, particularly as a South Australian, given that we've had a rocky few years when it comes to reliability and prices. I would say that three fundamentals of an energy policy are a reliable system, a system that's affordable and one where you're reducing emissions, particularly against international agreements we are making. I will address each of those three elements in my contribution.
Firstly, I will speak about reliability. In South Australia, we have had significant reliability issues in years gone by, and, thankfully, we seem to have moved beyond that. No-one from South Australia will forget the statewide blackout that happened in 2016. In early 2017, we had rolling load-shedding incidents that led the then government to have to purchase diesel generators to underpin our system. There's nothing worse than generating electricity through dirty diesel. But, when you don't plan for a reliable system and you don't have the firm base-load capacity in place, as was the situation that developed in South Australia, that's the sort of thing you have to resort to. Thankfully, we are progressing with an interconnector between South Australia and New South Wales which will give us around 850 megawatts of interconnection between those two grids, on top of the 800 megawatts we've got between South Australia and Victoria. That's obviously going to double the amount of electricity we can bring into the system. More importantly, South Australia can export out of the system, and that's going to unlock a lot of investment in South Australia. But, in terms of reliability, it's going to ensure that we will never risk a repeat of the situation we faced in 2016 when the entire grid collapsed. That sort of reliability is going to be fundamental for the other important challenges in energy policy for us.
The second point is affordability. Thankfully, again, there have been good developments in the last few years since the change of government in South Australia. In the 2019 financial year, the wholesale price per megawatt hour was $109.80. In the 2020 financial year, it was $62.04. In this year to date—bearing in mind that we're towards the end of March, so we've gone through the summer period which usually puts the higher price pressures on—the average wholesale price is down to $36.48. So, in just three years, we've seen wholesale prices fall to one-third of what they were. That's a great story for families, a great story for businesses and a great story for future investment in the South Australian economy, because affordable electricity was one of the great strengths that South Australia brought to the proposition of attracting investment and job creation in our state, and it certainly can be a great strength again. I welcome those falls in prices. Of course, we have to be ever vigilant there. We need a lot more investment, but we're attracting that investment into South Australia because, with more generation, particularly on the back of the interconnector that we will have switched on, hopefully, by 2023, there's a sound opportunity not just to generate electricity in South Australia for the South Australian market but to export electricity into the rest of the National Electricity Market. That is going to ensure that we keep downward pressure on prices. But to have a wholesale megawatt-hour price of $36.48 in South Australia is truly remarkable.
Finally: on reducing emissions. We're very lucky in this country and in my home state that we've had good investment in recent years and that we continue to have record investment in renewable energy. What is vital is that that's underpinned by firm, reliable dispatchable electricity so that all the renewable energy that we're putting into place is not just intermittent. That's fine when the wind is blowing or when the sun is shining, but it doesn't help you very much when neither of those factors are in place. I am particularly proud of the Commonwealth government's Clean Energy Finance Corporation and the work that we've been doing in supporting households investing in home-scale battery systems so that they connect those to rooftop solar. They can store energy when they're generating it and they can use it when they need it. This is one of the very practical examples of our technology-rather-than-taxes approach to reducing emissions and also to the other two pillars—reducing prices and ensuring reliability.
I am very hopeful for the future of the electricity market in my home state and in this nation because of the Morrison government's approach to this and because we're focused on investing in and backing technology so that we can have that affordability and reliability, coupled with the emissions reductions we need into the future.