Question Time

Electricity Prices

Mr VAN HOLST PELLEKAAN (Stuart) (14:36): Thank you, sir. My question is to the Minister for Mineral Resources and Energy. Does the minister agree with the Premier, who said publicly this morning:

…our advice from the Australian Energy Market Operator is that within a couple of years we will be having similar prices to other states.

In December last year, company ACIL Allen advised the government that South Australian electricity spot prices will be significantly higher than other states until at least 2030.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:37): I was in the meeting when the national energy market operator advised the Premier and I that by 2018 prices would stabilise, given the upgrade to the interconnector and the change in the national market with what is occurring in Victoria and New South Wales. The truth is this: we are undertaking a transition, and that transition, like all disruption, can be very difficult. We are seeing disruption in areas like public transport, where we have Uber using technology, using Apple iPhones to disrupt the way ride sharing—

Members interjecting:

The SPEAKER: The members for Schubert and Stuart are warned for the second and final time.

The Hon. A. KOUTSANTONIS: —ridesharing occurs, and it is no different with renewable energy. There is going to be disruption in the market.

Mr Knoll interjecting:

The Hon. A. KOUTSANTONIS: But, of course, what the opposition—

The SPEAKER: The member for Schubert is on his last chance.

The Hon. A. KOUTSANTONIS: What the opposition do not quote are articles like in today's Australian Financial Review, where Richard Dennis, from the Australian Institute, says this:

The average annual wholesale price of electricity in South Australia has fallen by 40 per cent since 2007-08. Scary isn’t it. The same old bed-wetters…[who] have been spooked by some big spikes in the spot price of electricity in South Australia. Cooler heads have highlighted that the vast majority of industrial and domestic customers are on long-run contracts, and that renewables sometimes push the electricity spot [market prices to negative.]

That means that renewable energy is actually removing the peaks out of our wholesale market. It is actually allowing—

Mr Marshall interjecting:

The Hon. A. KOUTSANTONIS: Well, I said yes, and I was in the same meeting with him.

Mr Marshall: So you agree?

The Hon. A. KOUTSANTONIS: Yes.

Mr Marshall: ACIL Allen were wrong?

The Hon. A. KOUTSANTONIS: No, the market energy operator was right.

Mr Marshall: So ACIL Allen was wrong?

The Hon. A. KOUTSANTONIS: The market energy operator was right, and interjecting—

The SPEAKER: I think the leader has his answer. He will cease interjecting.

The Hon. A. KOUTSANTONIS: What we are seeing is that wind has actually brought prices down, and the reason there are such large companies playing the spot market is not because they don't want to hedge, it is because there is an advantage in playing the spot market because at some point of generation these long-run industries are actually being paid to take power when wind comes online, bringing prices down to below zero. That means they are being paid to take energy.

There have been times over the last six months when BHP, Alinta and Nyrstar have been paid to take power because of renewable energy. Of course, the opposition are not interested in those moments. What they are interested in is when the gas spot market is so high that they would rather sell their gas on the spot market—

Mr Duluk interjecting:

The SPEAKER: I call the member for Davenport to order.

The Hon. A. KOUTSANTONIS: —than generate electricity. If the Leader of the Opposition actually understood this policy, rather than whingeing and fake laughing, he would come up with an alternative policy. Instead, it is just whingeing, it is just complaining, it is just the same old rhetoric. They don't like renewable energy, they don't like wind energy, they don't believe in global warming, so they attack the disruption. That is their MO. They attack the disruption.

Yelling out in the parliament is not a substitute for alternative policy because an alternative policy—put it up and let's have a debate. Let's debate the idea. Let's debate the policy. Let's look at its impacts. Thus far, it is just the highest paid whingers in South Australia.

The SPEAKER: I note the member for Davenport transgressed in the pre-lunch period; therefore, he is on a warning.