Electricity Prices

Ms DIGANCE (Elder) (14:28): My question is to the Minister for Mineral Resources and Energy. Minister, can you outline to the house the impact on wholesale electricity prices in South Australia since the release of the government's energy plan?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:28): I thank the member for her question and note her ongoing support and indeed the government's ongoing support for the rollout of Our Energy Plan. Part of its objective is to put downward pressure on prices. We all know that South Australia's wholesale prices have traditionally been higher than those in the coal-rich Eastern States, which is precisely what our multilayered energy plan is aimed at combating.

As part of the findings in the report by the Australian Competition and Consumer Commission released yesterday, it was confirmed that almost half of every power bill is attributed to network costs—in other words, the maintenance of the poles and wires used to distribute energy to our homes and businesses. On average in the past decade, South Australia's electricity costs have been 25 per cent higher than those in New South Wales and 31 per cent higher than those in Victoria, which has historically claimed to have the lowest cost in the nation. Victoria has held the mantle traditionally as the lowest cost power generator in the country. So far this financial year, that is no longer the case.

South Australia's wholesale prices are 10 per cent lower than the average for 2016-17. Figures released for the September quarter reveal that the margin above New South Wales prices has fallen to 4.1 per cent. Remarkably, with no precedent whatsoever in the previous decade, power prices in South Australia this year are 2.4 per cent lower than they are in Victoria.

In addition, over the past four months we have seen almost a 100 per cent increase in the amount of renewable energy being exported from South Australia to Victoria. We are trying to stimulate a system that encourages investment, helps Australia fulfil its obligations under the Paris Agreement and, most important of all, lets the market deliver the lowest cost and the most reliable power for consumers.

Since we announced Our Energy Plan seven months ago, we have seen major investment announcements in South Australia. This is because our plan was carefully crafted not to disrupt the market, nor to deter new projects. In fact, the only two new large-scale dispatchable energy generators that have been committed to the National Electricity Market in recent years are both here in South Australia: a new AGL gas generator at the Barker Inlet, the first to be built in Australia for years, replacing part of the Torrens Island plant, and a $650 million solar thermal plant being built in Port Augusta by SolarReserve, the biggest facility of its kind in the world, which will increase competition and drive down prices.

We have had many renewable projects receive development approval. We have also seen ENGIE, who own Pelican Point, spend $40 million on the upgrade to the second unit at Pelican Point, and construction of the world's biggest battery is nearing completion in the state's north. Our efforts have been focused on self-reliance—that is, increasing generation here locally in South Australia, not being reliant on interconnectors and extension cords into other jurisdictions, but producing more power here in South Australia to make sure that we are self-sufficient, producing South Australian power for South Australians.

Our plan has been specifically designed to put downward pressure on wholesale prices and, importantly, ACIL Allen, who were elicited to do the economic modelling for members opposite, found that the opposition's do-nothing option was much more advantageous than when they actually acted to intervene in the market.

What we are finding is that our plan is working, is lowering prices and of course we are producing more power here in South Australia, rather than building an extension cord to plug in to another jurisdiction that is worried about its own supply because they have scarcity in the market. It does not sound like quite the short-term plan to lower prices.