Energy Security Target

Mr VAN HOLST PELLEKAAN (Stuart) (14:49): Supplementary: given that the minister said in his answer that he is delaying the implementation of the energy security target because the solar thermal plant that was recently announced at Port Augusta won't be built, and so he wants to delay the target program until it is built—

The SPEAKER: Can the member for Stuart ask the question?

Mr VAN HOLST PELLEKAAN: —why did he originally announce that the energy security target would come into effect on 1 July this year, when at the time he knew the solar thermal plant would not be there?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:50): Again, I couldn't pre-empt the outcome of the tender process. I have to say that when the government holds a procurement we don't generally know the outcome. We go to the market and we see what the market can offer us. The great thing about the solar thermal plant is that it has sent a shiver up the spine of traditional fossil fuel generation because it won a competitive tender against gas. It beat gas. That is a remarkable breakthrough—a remarkable breakthrough. That breakthrough has sent shockwaves throughout the entire east coast electricity market.

Remember, South Australia and New South Wales hold the title to two unique titles: New South Wales has the highest penetration of coal-fired generation in the world and, arguably, South Australia has the highest penetration, at times, of renewable energy in the world. So the idea that a fossil-fuelled generator would lose a tender to something like solar thermal was not contemplated by the industry, and yet it did, and it won, and it won it well. That is why we are delaying the reintroduction of an energy security target, because what the privatisation of ETSA has done is put a great deal of generating power and market monopoly rent power into the hands of a few. Those few—AGL and Origin—you can match their share price from the rises in power prices across the eastern seaboard.

What we are trying to do is to smash up that monopoly power by introducing a new competitor, a new competitor who can offer new contracts that are not on the basis of the old arrangements, a new offer into the South Australian market. Once they are operating and they are running, an energy security target, or a clean energy target, or an energy intensity scheme, will incentivise all forms of generation to offer more contracts into the market, giving business more opportunities to buy competitive offers from different generators, driving down prices.

Currently, under what we have now, we have very large generators setting the price in this state because they've got monopoly power. And they've got monopoly power—why? Because we sold an essential utility as a monopoly. We sold our assets and we sold our transmission lines and we sold our distribution lines to people who aim to make profit from them rather than deliver a service. The reason we built transmission lines and the reason we built distribution lines was to provide a public good, and members opposite sold them to profit-making enterprises, and today they come back and complain to us about what they are charging us for the privilege. It's a bit rich!