Electricity Supply

The Hon. J.M. RANKINE (Wright) (14:23): My question is to the Minister for Mineral Resources and Energy. Can the minister outline to the house how the government's energy plan has influenced the national market operator's energy supply outlook for eastern and south-eastern Australia?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:23): Last week, the Australian Energy Market Operator (AEMO) released the first report into energy supply projections for eastern and south-eastern Australia for the next two years. Overall, AEMO expects that all National Electricity Market (NEM) regions will meet the reliability standard set in the National Electricity Rules (NER) over the next two years based on the generation and storage expected to be available.

The market operator's inaugural energy supply outlook shows that the government's energy plan is working and is already having an impact on the overall reliability of the network and future supply requirements. While electricity supply would have been tight in the absence of state government intervention, the outlook for the next two summers, incorporating our 100 megawatts of battery storage and our 200 megawatts of temporary generators, is significantly more secure. The last projections re-evaluate conclusions drawn in November 2016 and have now factored in recent industry developments up to 1 May 2017, including Our Energy Plan. The Chief Executive Officer of AEMO said on radio FIVEaa:

It actually shows that the work in South Australia is extremely effective in helping meet the needs of next summer.

It is clear that even the national market operator believes our energy plan is working and will improve grid security.

According to AEMO, the national energy market reliability figures have not yet factored in the procurement of reserve under the Reliability and Emergency Reserve Trader in addition to their collaboration with ARENA to secure a further 100 megawatts of demand response. Both of these will further work to strengthen reliability. While the report contains some encouraging aspects, it still highlights the need for urgent reform to be instigated by the commonwealth government, which is why we welcome and support in principle the blueprint for our energy future, released by the nation's Chief Scientist, Dr Finkel.

One of the primary recommendations of that report is the urgent need for a market mechanism for our energy transition. It is a significant step forward in terms of energy policy, and we implore the commonwealth government to act swiftly to support and implement a national market mechanism as recommended by the Chief Scientist. This will help ensure that the private sector has long-term confidence to reinvest in the NEM. This is absolutely aligned with what we have been saying all along. It is encouraging to see the pillars of our plan, released more than three months ago, having such a positive and material impact on the national energy market.

Meanwhile, we are waiting for alternative plans to emerge in the state from our opponents, who have not put out an alternative plan. I think it is important that we have a debate before the election about energy plans. There is nothing more important than having a debate of ideas on this. We have released our plan. The commonwealth government has released the Finkel inquiry. They are yet to adopt which recommendations they will accept and not accept. We strongly support a market mechanism. The question now is: will the opposition just wait for the commonwealth to tell them what to do, or do they have their own independent plan for South Australia?

The government is committed to taking action and working closely with AEMO to ensure that South Australians have a secure and reliable energy supply into the future. Nothing can be more important for the long-term prosperity of the state than reliable, secure and affordable electricity.