House of Assembly Fifty-Third Parliament, Second Session (53-2) 53 2 Parliament of South Australia House of Assembly published Question Time Electricity Policy Electricity Policy Mr VAN HOLST PELLEKAAN House of Assembly Stuart Electricity Policy Mr VAN HOLST PELLEKAAN (Stuart) (14:40): My question is to the Minister for Mineral Resources and Energy. Is the minister considering offering capacity payments to base load electricity generators to encourage them to stay in the market and, if not, what other incentives is he considering? In a radio interview this morning, the minister said, and I quote: What we need to do is try and incentivise as much as we can on open cycle gas fired generation. The Hon. A. KOUTSANTONIS House of Assembly West Torrens Minister for Finance Minister for State Development Minister for Mineral Resources and Energy Electricity Policy The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:41): I had an interesting debate this morning with the Leader of the Opposition on radio. Ms Chapman interjecting: The Speaker House of Assembly The SPEAKER: The deputy leader is warned. The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: I think it is important to note that there is not one simple solution to energy issues in South Australia. As much as the opposition want to simplify the issue and simply say, 'By howling at the moon, we can do something about energy prices,' the truth is it is a complex issue that requires a lot of complex solutions; there is not simply one solution to all of this. The government currently has an expression of interest out— An honourable member interjecting: The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: I'm giving you an answer. The state government currently has an expression of interest out for the procurement of our own source energy, looking for innovative solutions for a carbon-constrained supply and, of course, ensuring the best possible outcome for South Australians. We have, of course, argued for greater interconnection with other states, something members opposite, when they were in government, opposed, to try to maximise the sale price of ETSA. So, there is a whole series of solutions that we need in place, but this all boils down to one small reality which is governing the opposition's attack on energy prices; that is, renewable energy is having an impact on power prices in South Australia in two ways. Members interjecting: The Speaker House of Assembly The SPEAKER: The member for Schubert is called to order. The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: The first way is intuitive and everyone would understand. It is that renewable energy, once the first investment is made, generates for free. So, we can plug into the market at almost no cost. On top of that— Members interjecting: The Speaker House of Assembly The SPEAKER: The leader is a hair's breadth from departing the chamber. The Hon. P. Caica House of Assembly The Hon. P. Caica: And his job, sir. The Speaker House of Assembly The SPEAKER: The member for Colton is called to order. The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: So, because of the subsidies offered by the commonwealth government (the members opposite's party), those subsidies that are in place now allow generation to be put in place when the market would not ordinarily allow that generation. Members interjecting: The Speaker House of Assembly The SPEAKER: The member for Stuart is called to order and the member for Schubert is warned. Mr Knoll interjecting: The Speaker House of Assembly The SPEAKER: The member for Schubert is warned for the second and the last time. The Hon. T.R. Kenyon House of Assembly The Hon. T.R. Kenyon: Not before time. The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: You're the future of this party; don't get thrown out again. The Speaker House of Assembly The SPEAKER: The member for Newland is warned for the second time. The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: So, we have a situation where renewable energy is dragging power prices down. However, when the wind isn't blowing and the sun isn't shining and we don't have that cheap renewable energy in our markets— Mr VAN HOLST PELLEKAAN House of Assembly Mr VAN HOLST PELLEKAAN: Point of order: I ask you to bring the— The Speaker House of Assembly The SPEAKER: Yes, the question was about base load. Mr VAN HOLST PELLEKAAN House of Assembly Mr VAN HOLST PELLEKAAN: It was about capacity payments for base load, sir. The Hon. T.R. Kenyon House of Assembly The Hon. T.R. Kenyon: So, you want to subsidise all electricity now? Mr VAN HOLST PELLEKAAN House of Assembly Mr VAN HOLST PELLEKAAN: No, I'm asking— The Hon. T.R. Kenyon House of Assembly The Hon. T.R. Kenyon: All electricity. The Speaker House of Assembly The SPEAKER: The member for Newland will depart for 15 minutes under the standing order. The honourable member for Newland having withdrawn from the chamber: The Speaker House of Assembly The SPEAKER: Minister. The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: So what happens when the wind is not blowing and the sun is not shining? Base load generation then comes into the market when there is high demand and prices go up. In terms of incentives, the problem with incentives is this: because the opposition sold our assets, and we don't own our electricity assets. Whatever justification members opposite want to make, they sold our assets to foreign interests and I don't own, and we don't own as a community, our generation capabilities. We don't own our distribution networks, and we don't own our network systems. By not owning those systems, for the taxpayer now to re-enter that market is fraught. However, the government will do everything we can to try to minimise the price increases and fluctuations in the market. Members interjecting: The Speaker House of Assembly The SPEAKER: Alas, the minister's time has expired. Was that the member for Adelaide I heard interjecting? The member for Torrens.