Energy System Strength

Mr BASHAM (Finniss) (14:47): My question is to the Minister for Energy and Mining. Can the minister please update the house on the latest findings about energy system strength in South Australia and how it is being addressed?

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (14:47): Thank you to the member for Finniss for this important question. System strength and inertia are very important in South Australia. The Australian Energy Market Commission recently—I think on 4 April this year—put out their annual market performance report. They highlighted very clearly that system strength in South Australia is a problem that we must address.

The reason we have this difficulty is that, while we are extremely good at generating electricity in South Australia from renewable sources, from sun and wind, and in isolation that is a very positive thing, you can't look at these things in isolation. The previous government failed to address system strength and inertia. As the penetration of renewable energy increases, which again I say is a very positive thing in isolation, it needs to be considered with regard to the market as a whole, considering matching supply and demand.

As we had less and less synchronous energy being delivered through our supply side of the market, system strength declined. What are we doing about it? In partnership with industry and primarily with ElectraNet, there will be four synchronous condensers brought into the South Australian market—two near Robertstown and two near Port Augusta—which will work to improve both system strength and inertia. We need both of those things.

While we want, of course, to continue to have more and more renewable energy playing a part in South Australia and throughout Australia, we can't do it at the expense of system strength and, as we know all too well in South Australia, we can't do it at the expense of high prices to consumers, either—another failing of the previous Labor government. So, in partnership with industry and key market bodies, we are working very hard on this issue.

ElectraNet will put these four synchronous condensers in place. They will contribute to system strength and inertia and make the supply of electricity much better. As well as addressing the quality of the supply of the electricity, they will also reduce the cost of electricity, something that the previous government certainly let get way out of control over the previous five to 10 years.

This move will not only improve the quality of supply but it will have a saving—a fairly small saving, I have to say, but any saving is a positive for electricity consumers in South Australia. This is paired with the Marshall Liberal government's energy policies—the Home Battery Scheme and the grid-scale storage scheme, which I hope to be able to make an announcement on in the middle of this calendar year. That is paired with our intention of getting partnership with industry to deliver an interconnector between South Australia and New South Wales.

It is also paired with our demand management and demand response trials—which, again, I hope to make an announcement on fairly shortly—and other aspects of the Marshall Liberal government's energy solution, which we have developed with a very clear focus in mind: to reduce the cost of electricity to all consumers, from the largest employers through to the smallest households; to improve the reliability of electricity in South Australia; and to continue to make it cleaner, greener and more environmentally responsible. All of these things paired together with ElectraNet's synchronous condensers will make electricity cheaper, more reliable and more environmentally responsible for all South Australian consumers.