SolarReserve Agreement

Mr VAN HOLST PELLEKAAN (Stuart) (15:06): My question is again to the Minister for Energy. Can the minister explain how the $75 average and the $78 per megawatt hour cap for electricity to be delivered under the government's agreement with SolarReserve has been derived and whether this cap is subject to change over time?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (15:07): I am trying to understand the intent of the question.

Mr Knoll: A shiver has just gone down his spine.

The Hon. A. KOUTSANTONIS: Up—it goes up, not down. I think what the member is confusing is the difference between the market offer and what we have negotiated. I think what the member is not quite understanding is that the SolarReserve offer to the government was on the basis of supplying to us on a profile of our demand and what we require when we require it—that load profile—and, of course, then the cost of their capital to build the project and, of course, we agreed to a longer period of a PPA, from 10 years to 20 years, through the negotiation process in order to have the SolarReserve project built.

That is part of the contracts that we have. Of course, that is very different from what they offer the public and we did everything we could to leverage our purchasing power to give the public a much better retail offering in the market. I am happy to offer the shadow minister a briefing. I am not quite sure why he is so disappointed that SolarReserve have won the contract, or why he is so disappointed that a solar thermal plant has won the tender that is in Port Augusta.

I find it also fascinating that almost every question I have had in this place from the shadow minister has been about an old coal-fired generator he tried to save rather than supporting a brand-new solar thermal plant in Port Augusta. But he can explain to his constituents in Port Augusta why he was so committed to coal and not that committed to the solar thermal plant in Port Augusta. I think the government got a very good deal out of the SolarReserve tender. Most importantly, they beat out thermal generation, which was a remarkable feat for the proponents of a solar thermal plant to defeat a thermal tender.

It is interesting to note that the important part about our load in comparison to the way the solar thermal plant will operate is that the solar thermal plant will have sufficient load to dispatch into the grid at times of high demand because our load peaks in the middle of the day. Because our load peaks in the middle of the day, that enables SolarReserve to manage their load to meet our needs and have sufficient supply to then dispatch into the grid at a much lower price. This will give, of course, the retail outcome that we have been looking for, which is competition. That is what has been fundamentally missing in South Australia since the botched privatisation of ETSA that members opposite have gifted South Australia for 200 years.