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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2010-07-20 Daily Xml
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GREEN GRID PLAN

The Hon. M.D. RANN (Ramsay—Premier, Minister for Economic Development, Minister for Social Inclusion, Minister for the Arts, Minister for Sustainability and Climate Change) (14:11): I seek leave to make another ministerial statement.

Leave granted.

The Hon. M.D. RANN: In March 2009, South Australia's Economic Development Board released an economic statement which identified renewable energy as an important new industry for South Australia's economic future. Later, in June, as Minister for Sustainability and Climate Change, I announced an increase to this state's renewable energy target. Instead of having 20 per cent of all of our power coming from renewable energy by 2020, I wanted South Australia to be in an internationally leading position by having 33 per cent of our electricity supply being generated by green sources by 2020.

As members would be aware, with just 8 per cent of the nation's population this state has done incredibly well in attracting nearly 50 per cent of the nation's grid connected wind power, about 20 per cent of its solar power, and more than 90 per cent of its geothermal developments during the past eight years. Also, in June last year the government set up the Renewables SA Board chaired by the chairman of the EDB, Bruce Carter, and created an associate position of Commissioner for Renewable Energy in order to accelerate private investment in the sustainable energy sector. The Renewables SA initiative was supported by a $20 million renewable energy fund.

Two months later, I announced the first allocation from the fund with the commissioning of a $1 million independent study to look at the feasibility of attracting an even greater investment of wind farms by connecting them to the national electricity grid. Specifically, this study was to look at the potential opportunity of establishing more wind energy farms in some of the windiest and remote areas of South Australia on the Eyre Peninsula. The study was led by Macquarie Capital, a subsidiary of the Macquarie Bank, with respected experts in their fields, WorleyParsons and Baker & McKenzie.

Last week I released their report which provides a blueprint that shows how South Australia can utilise underdeveloped areas of Eyre Peninsula and channel that green power into the national electricity grid and, thus, deliver green energy to Australia's eastern seaboard. The report proposes a plan to roll out an estimated $4.5 billion of green power investment for South Australia's Eyre Peninsula between 2015 and 2018. It says $1.8 billion will be spent directly in South Australia which will include building strategic transmission lines to tap into the Eyre Peninsula's outstanding wind resource.

At the moment, the Eyre Peninsula has an incredible capacity of four major wind zones with wind speeds above eight metres per second, creating a potential of 10,000 megawatts of generation. The report says that stage 1 of the project could attract $4.5 billion in a further 2,000 megawatts of wind power in our state to add to the nearly 1,000 megawatts of wind power already installed in South Australia valued at around $2 billion. The report also indicates that an additional 1,000 megawatts of wind generation could be accommodated right now within South Australia's existing grid.

This is an exciting investment opportunity for South Australia that will not only substantially reduce our greenhouse gas emissions but also create a new industry and new jobs and, importantly, support regional businesses. That is why I am delighted that four internationally experienced wind energy companies have already expressed great interest in the project. The very good news is that the report establishes that the project is commercially viable and that there is no need for direct state government financial involvement. The transmission connections required are a new $613 million line from Elliston to Port Augusta, along with a new $840 million backbone for the existing network connection from Port Augusta to Heywood in Victoria.

South Australia has the potential to contribute 30 per cent of the entire nation's renewable energy target; in other words, our state can be a major source of green power for the eastern states so they can reach their targets. The report estimates that the project in South Australia alone could create 1,400 direct construction jobs and a further 1,600 indirect jobs in the construction phase and 266 ongoing jobs. The lion's share of the construction activity would be on Eyre Peninsula.

In addition, the economic benefits would be significant. It is estimated that South Australia's gross state product would increase by $158 million per year, and the savings in greenhouse gases from this investment are forecast at 2.75 million tonnes of CO2 every year across the national electricity market. It will require a change in the national regulations, but I expect the release of this report will accelerate the decision-making timetable for the changes required, given the national economic and environmental significance of this project.

Renewable energy now has the very real capacity to be South Australia's next big industry, alongside defence and mining. Just a few weeks ago the federal parliament passed legislation that committed our nation as a whole to having 20 per cent of its electricity coming from renewable energy by 2020. As a state we can capitalise on that target. We will vastly exceed that target, but we can capitalise on the needs of the other states; in other words, South Australia can help the rest of the nation achieve that target with what is being proposed in this report.

A project of this scale and ambition requires close collaboration amongst governments, regulators, transmitters, developers and the communities of Eyre Peninsula to take it from business plan to implementation. The Green Grid report establishes that the necessary pre-conditions—economic, environmental and social—are in place to allow it to proceed as long as the proposed regulatory changes go ahead. It is now up to those parties to make it happen. As a government we will certainly be doing all we can to lobby for changes to federal regulations to allow this proposed plan to become a reality. South Australia is already a leader in green energy, but this will help to turn our state into a green powerhouse of energy for the rest of the country.

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