Motions

State Electricity Network

Mr PATTERSON (Morphett) (11:03): I move:

That this house—

(a) recognises that 28 September 2022 marks six years since the statewide blackout in which almost all South Australia lost power during a period when local power prices soared to amongst the highest in the world;

(b) commends the Marshall Liberal government for increasing the reliability of South Australia’s power network and accelerating South Australia’s achievement of net-100 per cent renewables while reducing the average household electricity bill by $421 a year; and

(c) urges the Malinauskas Labor government, despite Labor’s previous opposition to the project, to ensure the high-capacity interconnector between South Australia and New South Wales is completed on schedule to provide a further cut to power prices while incentivising the introduction of more renewable energy.

Today is 28 September: six years ago to the day, on 28 September 2016, South Australia was plunged into a statewide blackout under the former Labor government, causing chaos and putting lives at risk. The state lost power, and it was certainly a dark day for South Australia, affecting South Australians just as they were about to finish work or come home from school.

It really hit home just how much modern society depends on reliable electricity. With all the traffic lights out, commuters returning home had to rely on police officers to direct traffic, causing massive delays. It was the first time such a blackout had occurred on a statewide level in Australia.

The impact on business was significant as well. According to Business SA, Labor's statewide blackout cost the state about $350 million. Some examples of this include that BHP's Olympic Dam mine was unable to operate from more than two weeks after the blackout, costing it $1 million a day, while another major South Australian company, Adelaide Brighton Cement, lost power for 36 hours during the statewide blackout, with an estimated loss of $9 million.

Over and above this massive statewide blackout, either side of it there were also other continued forced blackouts for a number of periods during that time. Businesses and households started looking to buy backup diesel generators as they lost faith in reliable electricity. An example of this is the South Australian company Ferguson Australia, which is involved with seafood, lobsters. It has been affected by trade issues recently, but before that it had to depend on reliable electricity.

It had live lobsters in water tanks that needed to be filtered and the water continually running. Without electricity, that filtration system no longer works and the lack of oxygen causes the lobsters to become stressed and eventually die. Having to resort to backup batteries and backup diesel generators were suboptimal conditions for a business to operate in, and the impact was such that the business lost faith in reliable electricity.

Between 2014 and 2018, during the term of the former Labor government, seven million customer hours were lost from households as well as from businesses. What was happening during this time? Renewable energy was replacing traditional generators that were fuelled either by coal or gas. One such generator, the Northern power station at Port Augusta, closed in May 2016, just four months before the statewide blackout.

The loss of traditional generation led to declining system strength and network stability in terms of both frequency and voltage. Unfortunately, the former Labor government was not focused on these important areas to ensure the right settings and controls were in place on renewable energy and renewables in this state.

At the same time as the system strength issues, the closure of the Northern power station saw wholesale spot prices jump extraordinarily high—up over 100 per cent. Of course, this flowed onto customers and they saw an increase in their bills of between $200 and $250. Overall, between June 2016 through to June 2018—this was the last time that the current energy minister was also energy minister—according to ESCOSA, the average residential household's electricity prices skyrocketed by $477. Businesses also were not immune to this and saw their bills rise by $1,075. Overall, South Australia's electricity prices soared to amongst the highest in the world while, at the same time, the former Labor government failed to make sure that we had secure generation in South Australia.

If we are to undergo an orderly transition to renewables, it is certainly important that it is done so that it generates not only clean electricity but, importantly, electricity that is affordable and reliable. To do those three in conjunction, if you go too far in one direction with one, invariably one of the others fails. In this case, we saw reliability and affordability go through the roof. We need to take this opportunity in South Australia because we have 69 per cent of the nation's solar and wind resources, quality wind resources, and they can be leveraged, but it really does need to be done in an orderly manner.

Certainly one of the key ways to do that, to continue to grow renewable energy, is to make sure that there is grid stability. Recognising this, the former Liberal government put in place four key pillars to ensure that that grid was stable. One of those was to roll out the Home Battery Scheme for households. This saw the world's largest per capita take-up of smart home batteries, with South Australia leading the nation in percentage terms.

Not only does this help householders themselves but at times when energy is at its highest—in the morning when people are getting ready for work and school or when people are coming home and turning on appliances—and when there are electricity peaks, home batteries can reduce the overall peak demand which then means that the prices that all South Australians pay are reduced.

The scheme itself was targeted at 40,000 home batteries of seven kilowatt hours each, producing overall 280 megawatts. That was the target: to have 280 megawatts of renewable energy storage into the system to stabilise that grid. As the scheme rolled out, the take-up saw the average battery per household at around 11 kilowatts. As it was going through, 18,000 households took it up. That saw 200 megawatts of renewable energy capacity stored in batteries. That continued on as a successful program but, unfortunately, it has been cut by this government, again calling into question their understanding of the need for grid stability.

Another area we concentrated on was, as I said, to get grid-scale storage as well. A grid-scale storage fund, again, tried to get batteries at grid scale so that not only do you have renewable energy but you also have dispatchable energy. Again, these are focused on those peak times. This has seen significant battery expansion in terms of storage capacity into the South Australian market. The Hornsdale battery has been increased by 50 per cent and we have also seen batteries come online at Gould Creek, Lake Bonney and Dalrymple.

Another area to help stabilise the grid was in terms of demand management, having voluntary demand management. Instead of people all putting on their appliances when everyone else was—say, at 6 o'clock at night—those that maybe do not need to go on at that time, like hot-water services and pool pumps, if they can be managed in the middle of the day when there is a lot of excess renewable energy then not only does that help keep prices down, it helps to reduce load on the system.

The most important measure that the former Liberal government looked to, and has successfully been able to introduce, was the interconnector between South Australia and New South Wales. That provides 800 megawatts of capacity between the two states. It has a twofold purpose: it allows us to export excess renewable energy when South Australia has an excess of renewable energy from our abundant wind and solar resources and, equally, when there is a wind drought or it is overcast, to be able import that energy from another source. At the moment, we have the interconnector to Victoria and this adds on another one to New South Wales. That redundancy is really important, so grid stability is also making sure that the system is resilient.

Equally important as well now is that we are getting into periods when we have negative demand and produce more electricity because of the massive rooftop solar we have here. It is over one gigawatt of rooftop solar and it is growing at about 200 megawatts per year. This interconnector will allow that distributed energy to be exported as well. It provides another avenue out which then in turn perversely allows you to continue to increase that amount of renewable distributed energy on rooftops as well.

I should say that the interconnector is also encouraging massive investment in grid-scale generation. One such project, Goyder South, wants to introduce 1,200 megawatts of wind energy, 600 megawatts of solar, 900 megawatts of battery capacity, and Neoen have said that two-thirds of this, or $2 billion of that investment, relies on being able to export that electricity to New South Wales. The managing director said that Project EnergyConnect is vital to unlocking the full potential of Neoen's multigigawatt Goyder Renewables Zone.

It was very interesting to see the current energy minister and the Premier announcing the next stage of this project only a few weeks ago. It was fantastic to see the commencement of construction in January this year at that site and, again, at that stage the Managing Director of Neoen said that it would have been impossible for Project EnergyConnect to get the Goyder South project off the line without that interconnector. That just really shows that not only is it helping South Australian households but it will help grid-scale generation as well.

Importantly, AEMO have also highlighted the importance of this interconnector. They have called it a no regrets decision in their integrated service plan back in 2020. Interestingly enough, two years later—every two years they bring out these service plans—again, they have emphasised how important interconnection is to this orderly transition. They have now started calling these sorts of interconnectors transmission lines of national significance and, certainly, that is what this interconnector is to South Australia.

This orderly transition has, at the same time as producing increases in renewable energy generation, increased reliability in South Australia. In fact, in the four years there were no customer hours lost from forced load shedding compared with seven million customer hours under the previous Labor government. Additionally, this has had massive downward pressure on electricity prices in South Australia with prices dropping by $421, which is fantastic for South Australian households. Unfortunately, this looks like reversing as we go forward.

We have just seen the latest ESCOSA report come out and it shows that prices have unfortunately gone up by $218. This is at the same time that the Labor government has cut programs that were helping with the stability, helping with the reliability, helping bring down prices for South Australians. That is of great concern to us. We cannot see any immediate plan in action at the moment and emphasise the need to concentrate on measures such as these mentioned here, such as the interconnector to ensure grid stability and making sure households experience low electricity prices.