Ministerial Statement

Power Outages

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:04): I seek leave to make a ministerial statement.

Leave granted.

The SPEAKER: I will endeavour to make sure that no matter how much the Treasurer provokes the opposition, they will not be allowed to interject.

The Hon. A. KOUTSANTONIS: Thank you once again, sir, for your wisdom; we would be lost without it. I wish to update the house about the power outages that occurred in South Australia overnight. At about 1 o'clock this morning, South Australia disconnected from the National Electricity Market (NEM) but continued to operate as a separate entity.

The Australian Energy Market Operator (AEMO) has confirmed that the separation of South Australia was due to an issue on the Victorian transmission network impacting flow via the Heywood interconnector to South Australia. A Victorian smelter was also disconnected from the electricity supply as a result of the fault. The exact cause of the fault is not yet known, but is currently being investigated. About 220 megawatts was lost, impacting about 200,000 South Australian customers for approximately one hour while systematic load shedding occurred to reinstate the loss of frequency and protect the system.

AEMO advises that it directed BHP, the state's largest energy user, to reduce its power consumption to preserve security in the system. Arrium also scaled back energy use and utilised on-site generation to help maintain a safe operating level. We are not aware of any of the state's large industrial users completely without power during the event. As BHP chief executive Andrew Mackenzie has stated, federal policymakers must grapple with the current situation, as a matter of urgency, to reduce emissions and provide secure, affordable, dispatchable and uninterrupted power.

I can inform the house that in the minutes leading up to the separation of the National Electricity Market we had approximately 880 megawatts of thermal generation and 125 megawatts of wind. This included Pelican Point and four units at Torrens Island. Customers in South Australia had power restored at about 2.15am, and just after 5am the state's entire power network was reconnected to the national grid.

To ensure AEMO can manage rapid changes in power system frequency in the short term, the government recently imposed a new regulation. It requires ElectraNet to provide advice to AEMO to help them maintain the expected rate of change of frequency of the South Australian power system in relation to the non-credible, coincident trip of both circuits of the Heywood interconnector when the power system is in a secure operating state or at below three hertz per second.

We have also taken a number of steps towards ensuring the national electricity framework adequately provides reliability and security of the power system as it transitions to a carbon-constrained future.

Members interjecting:

The SPEAKER: The members for Florey and Fisher will not distract the house from the Treasurer's ministerial statement about a very important matter.

The Hon. A. KOUTSANTONIS: This includes a package of four rule changes to the Australian Energy Market Commission which seek to offer flexibility to AEMO to manage security as the generation mix changes. We are working closely with Australia's Chief Scientist, Dr Alan Finkel, who is tasked with developing a national reform blueprint which will outline a national policy, legislative reform and rule changes required to maintain the security, reliability and affordability of the National Electricity Market as it transitions to a cleaner future. Mr Finkel will address next week's national COAG with preliminary findings from his initial investigations.

This work is vital to ensuring our NEM is brought into the 21^st century to better integrate renewable energy sources and deliver reliable, base load power while meeting Australia's international climate change commitments.

The SPEAKER: I call to order the leader, the member for Chaffey and the member for Mount Gambier, who interjected during that non-provocative ministerial statement.