Electricity Network Stability

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (14:08): I seek leave to make a make a ministerial statement.

Leave granted.

The Hon. D.C. VAN HOLST PELLEKAAN: On 31 January, a severe storm in western Victoria damaged powerlines near Portland, effectively islanding South Australia from the national electricity grid and creating the potential for both electricity supply and network stability problems.

The Hon. A. Koutsantonis: That's right, storms cause blackouts. Well done.

The SPEAKER: Order! The minister has leave.

The Hon. D.C. VAN HOLST PELLEKAAN: South Australian generated electricity also supplied the Portland aluminium smelter because it was also cut off from the rest of Victoria, preventing the shutdown of the smelter and saving approximately 4,000 jobs. If it had shut, it almost certainly would never have reopened again. Fortunately, the weather was mild when the interconnector was unavailable throughout February and South Australia had sufficient supply of electricity.

Network stability was a different matter, however, posing a very real threat to the state's energy supply, due in large part to the lack of planning by the former state Labor government, which means South Australia unfortunately has insufficient interconnection capacity. Of course, we have been there before with our system vulnerable to the damage of storms as the previous government did not plan to manage declining system strength and did not ensure the right settings and controls on renewables were in place. As we all know, these weaknesses—

The Hon. A. Koutsantonis: Is this what ministerial statements are for, Stephan? Is this part of our arrangement?

The SPEAKER: Member for West Torrens!

The Hon. D.C. VAN HOLST PELLEKAAN: —have plunged the entire state into darkness—

The Hon. A. Koutsantonis: Is this part of our arrangement?

The SPEAKER: Minister, one moment. The member for West Torrens may have something to say to the Minister for Transport; however, the Minister of Energy and Mining has the call, he has leave, so if there are interjections I am going to call them to order. The Minister for Energy and Mining has the call.

The Hon. D.C. VAN HOLST PELLEKAAN: Of course, we have been here before with our system vulnerable to the damage of storms as the previous government did not plan to manage declining system strength and did not ensure the right settings and controls on renewables were in place. As we all know, these weaknesses have plunged the entire state into darkness before.

South Australia is more reliant on variable renewable energy generation than any other gigawatt-scale jurisdiction in the world. We have gone from having negligible amounts of renewable energy 15 years ago to having the capacity to supply more than 100 per cent of our needs from renewable sources under certain conditions.

The former Labor government's helter-skelter approach to energy policy has come at a huge cost to South Australian electricity consumers and the state's economy. It delivered the most expensive electricity in the Western world and also the statewide blackout. Critically, the former government failed to deliver the solution to the fragility that it created: an interconnector with New South Wales, first promised by Labor in 2002. Had the interconnector been constructed as promised, consumers would likely have avoided the great majority of costs from transmission outages over the last 10 years.

It would also have avoided the majority of the ancillary services costs associated with the February islanding. The islanding, combined with the inherited network stability problems, required the Australian Energy Market Operator to carefully manage the system hour by hour for a month. The output of wind and solar farms was limited. Only the heaviest gas turbines were directed on and our three big batteries played a critical role in keeping the lights on. AEMO's work to keep the lights on whilst the interconnector was down cost an additional $90 million to control grid frequency. While no-one is impressed with the cost incurred—

The Hon. A. Koutsantonis: You were; you are defending it now.

The SPEAKER: The member for West Torrens is called to order.

The Hon. D.C. VAN HOLST PELLEKAAN: While no-one is impressed with the cost incurred, experts are impressed that the lights stayed on throughout the month. The Leader of the Opposition claimed, and I quote:

That's $90 million that could have easily been saved if Steven Marshall had decided to turn on our back-up generators. That's what they are there for.

It is hard to imagine a more erroneous statement. First, if that is what they were there for, why did the previous government not register the generators to provide frequency control? They were, in fact, specifically registered to only provide energy in case of a shortfall and not for frequency.

The Hon. A. Koutsantonis interjecting:

The SPEAKER: Order!

The Hon. D.C. VAN HOLST PELLEKAAN: Secondly, if they had intended the generators to provide inertia or frequency control—

The Hon. A. Koutsantonis: What is inertia, Steven?

The Hon. D.C. VAN HOLST PELLEKAAN: —they would have procured different generators for that purpose.

The SPEAKER: Member for West Torrens!

Members interjecting:

The SPEAKER: The member for West Torrens is warned and the Premier is also called to order because the Minister for Energy and Mining has sought leave, he has leave and, therefore, interjections are out of order.

The Hon. S.C. Mullighan interjecting:

The SPEAKER: Member for Lee!

The Hon. D.C. VAN HOLST PELLEKAAN: Secondly, if they had intended the generators to provide inertia or frequency control, they would have procured different generators for that purpose. The fact is that the power system experts at AEMO would have turned on Labor's dirty diesel generators if they were going to help grid stability and reduce costs to consumers, but they did not. In fact, it was a lack of grid demand, not a lack of grid supply, which was the primary risk for most of the month, so why would the Leader of the Opposition suggest turning on more generators during this time? He just does not understand. A small but obvious hint for the leader: do not take your advice on energy matters from the former minister who created the problems.

A new interconnector with New South Wales that will contribute cheaper electricity and more reliable electricity for all South Australians is what we need. It will also allow South Australia to responsibly continue down the lower emissions pathway without penalising consumers. The interconnector, which is in an Australian Energy Regulator approval process, is supported by the state government, the power system experts at AEMO, the Clean Energy Council, the renewables industry and just about every other organisation with expertise in the electricity network.

It is described in the national system plan as a 'no regrets' measure, yet the Labor Party, that closed the Northern power station, drove up electricity prices by 30 per cent and presided over the blackout of the entire state, still opposes the interconnector. It will not be long before the Leader of the Opposition will have to choose: does he support cheaper, more reliable and cleaner electricity for all South Australians or the policies of the former energy minister?

Mr Brown interjecting:

The SPEAKER: The member for Playford is called to order for that interjection.